Veolia today unveils an innovative and pragmatic metric - the True Cost of Water - that assesses water-related risks and allows major companies around the world to make sustainable business decisions ensuring long-term profitability.
The True Cost of Water, developed by Veolia, is a game-changing methodology that focuses on the financial implications of water-related risks for public authorities and industrial companies.
This methodology takes into account direct water costs (both capital and operating expenditure) and indirect water costs (such as legal and administrative expenses) to determine the long-term financial implications of water risks during the lifetime of a plant or a company-wide project.
"The need for this game-changing methodology is becoming increasingly important on the growth agendas of various companies who are now looking to optimize their water performance, mitigate risks and ensure social license to operate," Johann Clere, Global Director - Business Development, Industrial Markets at Veolia,said.
"True Cost of Water gives a global picture that puts a dollar value on the impact of future investment associated with water risks and opportunities. With this tool, financial and high level decision-makers are now able to make better, more calculated choices when investing in industrial water sustainability solutions around the world."
Return on investment and pay-back period are no longer simply based on current direct costs alone, they also include risk-based costs. It enables easy identification of the technical solution needed to mitigate the potential operational, regulatory, financial and reputational risks. This in turn allows decision-makers to better manage global organizations' water cycles, secure future investment to operate and ensure long-term profitability.
Philippe Joubert, Senior Advisor and Managing Director for Energy and Climate at the World Business Council for Sustainable Development added, "Water crises will be the second major global risk for business over the next ten years according to a report published at the 2013 World Economic Forum. The world's leading electrical utilities, that are now part of the Global Electricity Initiative, also see water as a major issue that will impact their development in the near future. Nature is starting to send us the bill for unsustainable development. Pricing water appropriately is the only way to make sound sustainable business decision."