INSIGHT by Ceres

A new analysis highlights an innovative approach for investors and companies that aims to strengthen the business case for water action and shows where corporate boards and executives should prioritize investments for the greatest impact on their business and society.

The Development of a Company-Level Cost-Benefit Analysis Framework, released by Ceres and the consultancy Bluerisk, introduces a new cost-benefit analysis framework for companies to assess the full value of water stewardship interventions across their value chain. Whereas some companies currently account for water-related risks to their business, the framework goes one step further to shed light on the full value of water by estimating the cost of solutions and potential business and societal benefits of water management strategies.


This cost-benefit analysis framework is a critical tool for investors and companies to understand the complex value of water as it relates to maintaining the health of a company and its relationship with the communities impacted by their operations and supply chains. Being able to quantify the business opportunities for engaging in water stewardship is essential to get the full attention of corporate executives and corporate boards and unlock internal funding to support water intervention strategies.”

-Kirsten James, senior program director of water at Ceres, and co-author to the analysis


The analysis, noting that many companies are likely not recognizing the full value of water stewardship, points to the 2022 water security survey led by the not-for-profit CDP, in which more than half of the 3,909 companies that participated did not disclose any water-related opportunities such as increased efficiency, competitive advantages, access to new markets, or resilient supply chains. Most companies acknowledged that opportunities exist but said they hadn’t been evaluated, did not have significant financial or strategic impact on the business, or were judged unimportant. This analysis helps clarify these common misperceptions.


“Part of the challenge lies in how companies measure the financial value of water to their business, focusing on risks rather than the value that could be gained from action. This framework helps bridge that gap, showing companies how to use water valuation metrics to better identify opportunities and justify water stewardship investments.”

-Paul Reig, founder of Bluerisk and co-author of the analysis“


Demonstrating how the cost-benefit analysis framework can be used effectively, the authors gathered publicly available information to apply it to a multi-national apparel company. The apparel sector provides an ideal test case because apparel companies have a significant impact and dependency on water resources.

Results looked at scenarios—such as sharing the cost of solutions by engaging in collective action—and sections of the company’s value chain delivering greatest benefits. Key insights from the illustrative case, which may differ depending on the company assessed, showed:

Cost-sharing approaches resulted in larger positive business and societal return on investment across most of the value chain, underscoring the value of engaging in partnerships and collective action.

The sections of the value chain where interventions deliver the largest benefits to the business are upstream of the company’s direct operations.

Investing in water stewardship delivers a positive societal return on investment across the value chain.

The cost-benefit analysis framework can be applied across all sections of a company’s value chain and is replicable across companies and sectors. Results can help a company prioritize solutions at the site, supplier, or watershed scale and also develop a better understanding of how to strengthen social and legal license to operate. 


“This type of framework is a gamechanger for companies such as ours working to build and evolve water management strategies that effectively address the material financial risks posed by the global water crisis.  Being able to identify and assess opportunities with a positive business and societal return on investment helps build a strong case for action.” 

-Jehanne Fabre, Sustainability, Water Director, Danone


The analysis adds to a strong body of research informing investor engagements with companies in the Valuing Water Finance Initiative. The cost-benefit analysis framework provides investors with another tool to engage companies with a high-water footprint to act on water as a financial risk and address their broad water impacts.


“The more we understand a company’s financial position when it comes to water risk and opportunities, the more informed our dialogues with those companies will be. Knowing the full value of water stewardship investments can also empower investors to optimize portfolios of investments for both business returns and societal impact.” 

-Marc-Olivier Buffle, Head of Thematic Client Portfolio Managers and Research at Pictet Asset Management 



| about

Ceres is a nonprofit organization working with the most influential capital market leaders to solve the world’s greatest sustainability challenges. Through our powerful networks and global collaborations of investors, companies and nonprofits, we drive action and inspire equitable market-based and policy solutions throughout the economy to build a just and sustainable future.

Bluerisk is a water strategy and data advisory firm focused on enhancing resilience and reducing risk in the face of emerging water challenges. Bluerisk’s analysis, experience, and market insights provide new roadmaps to a sustainable water future, by aligning practical and actionable solutions with the contextual and shared value of water.


All opinions expressed are those of the author and/or quoted sources. is an independent and neutral platform dedicated to generating debate around ESG investing topics.