For buyers · Internal water pricing
Your water bill is not its value.
The tariff you pay rarely reflects what a shortage would cost you. An internal water price, set per site and basin, brings that risk into your investment and procurement decisions.
02The problem
At the tariff, water looks almost free.
The tariff reflects neither scarcity, nor the cost of treatment and discharge, nor the risk of a restriction or disruption. Water-saving projects then look unprofitable. According to CDP, far fewer companies set an internal price for water than for carbon.The tariff ignores scarcity, treatment and disruption risk, so water savings look unprofitable.
03They already price water
Michelin, Nestlé, Hermès: they have already priced their water.
Their methods differ: the tariff times a local water-stress coefficient at Michelin, a price per site built on double materiality at Bel, the cost of replenishment projects at Microsoft, whose internal fee has funded its water positive projects since 2020. Only 5% of the companies reporting water to CDP have done it: the time to move ahead.Michelin, Nestlé, Hermès, Bel and Microsoft have set an internal water price. Only 5% of companies have.
04Three uses
Shadow price, internal fee or implicit price.
A shadow price is added to investment appraisals with no money changing hands. An internal fee is charged to sites and funds a water budget. An implicit price measures what you already spend per cubic metre saved. We help you choose the one that serves your decisions.A shadow price in your appraisals, a fee charged to sites or an implicit price: we help you choose.
05How it works
A price you can explain, not a magic number.
The price adds the direct costs of water, treatment and discharge, a premium for basin risk and the expected trend of prices and restrictions. The cost of an alternative source, reuse or desalination, serves as a benchmark. Every assumption is stated, with its range.Direct costs, basin risk and expected trend, every assumption stated with its range.
06Per site
A price per site, not a uniform price.
Most companies apply one price to all their sites. Yet a cubic metre is not worth the same in a low-stress basin and in one under extreme stress. Each site’s price draws on its basin context, from the context passport.A cubic metre is not worth the same in every basin: one price per site.
07From price to action
Projects below your price become priorities.
Compare each project’s cost per cubic metre saved with your internal price. Those below it are worth funding. The others can go through a performance contract, or through water certificates bought in the same basin.Projects cheaper per m³ than your internal price get funded; the others go through a contract or certificates.
08Get started
Start with your most exposed sites.
A first internal price on two or three sites is enough to revisit your investment choices.
+Questions
Is it the price of a certificate?
No. It is your internal decision value. A certificate’s price is set between buyer and project; the WRC price index will give its reference.
How is it different from an internal carbon price?
The principle is the same, but water is local: the same cubic metre has a different value from one basin to another. So the price is set per site.
How is the price set?
From direct costs, basin risk and the expected trend of prices and restrictions, with stated assumptions and ranges.
Do we have to charge sites?
Not necessarily. A shadow price, used only in decisions, is often enough to start; an internal fee can come later.
Where do we start?
With your most exposed sites, in the most stressed basins.