Just in time for ITP's stakeholder dialogue about water and the hotel industry at the beginning of November, the Water Risk Monetizer tool was launched, providing new data for businesses to factor water risks into critical business decisions
Water scarcity is impacting the vitality of communities around the world. For hotels, it is not only a responsible business issue, but a significant constraint to growth. The Water Risk Monetizer is industry’s first financial modeling tool that enables businesses to factor water into decisions that support business growth and help ensure the availability of this limited natural resource for future generations. The Water Risk Monetizer provides actionable information to help businesses understand the impact of water scarcity to their operations and quantify those risks in financial terms.
The Water Risk Monetizer was developed by Ecolab and Trucost, who are committed to advancing the principles of water stewardship by increasing understanding of global water risks and helping others make the business case for responsible water use.
"Water is greatly undervalued in many markets around the world, meaning business and society often take it for granted," said Richard Mattison, chief executive of Trucost. "As water scarcity worsens due to climate change, increasing consumption and inefficient use, companies with operations and supply chains in affected regions face increasing risks from water shortages and higher costs. The Water Risk Monetizer provides companies with a robust, but easy-to-use way to put a price on their use of water which reflects its true value to sustaining natural capital."
We recently spoke with Ecolab and Trucost to find out how relevant the tool is for hotels:
Why was the Water Risk Monitizer created?
Global scarcity of fresh water threatens business vitality and demands action. However, the current cost of water does not account for real and future risk, making it hard to rationalize business decisions to reduce use. The Water Risk Monetizer was created to help businesses apply a risk-based premium to today’s water costs in order to make more informed decisions to manage against constraints to growth. The Water Risk Monetizer is a publicly available online tool that provides actionable information to help businesses around the world understand the impact of water scarcity to their business and quantify those risks in financial terms to inform decisions that enable growth.
Who is it for and how does it help them?
The tool is designed for use by a range of business decision makers, including:
- Business site decision makers (corporate level) – individuals and teams setting enterprise business strategy (supply chain, operations, quality, engineering, sustainability)
- Facility and operations managers (site level) – individuals and teams responsible for improving performance at the site level
- Business consultants – third party experts helping to shape corporate strategy and decision making
- Nongovernmental organizations – organizations influencing global water stewardship practices
The information provided by the Water Risk Monetizer can be used to help businesses better understand water risks and the potential cost implications of water scarcity at a particular facility. The data provides valuable information to help assess different business models, determine how water costs or scarcity may affect growth plans and help inform business goals.
Why is it specifically relevant for hotels?
The Water Risk Monetizer is designed to help all water users, including hotels, understand water-related risks in financial terms. As hotels seek opportunities expand to meet demand, particularly in emerging markets, the Water Risk Monetizer provides valuable information to help hotels assess water scarcity risks and factor those risks into business planning in the same way other risks are considered in planning. The information also helps to demonstrate the return on investment for solutions to reduce, reuse and recycle water in order to make existing hotels more sustainable.
How do hotels get involved?
The Water Risk Monetizer is available at no cost at www.waterriskmonetizer.com . A tutorial video provides a step by step overview of how to use the tool. www.waterriskmonetizer.com/about/user-guide/ 
What are any next steps/ future developments?
Ecolab and Trucost will continue to look for ways to enhance the tool to provide the most value to water users around the world. Updates to the tool will be made as new data becomes available.
For more information check out other Green Hotelier articles on water and the hotel industry or read about International Tourism Partnership's stakeholder event on water and labour standards.