Regardless of how water withdrawals are distributed across sectors, competition is increasing. For example, industrial uses such as data centres use potable water for cooling, while mining activities impact water quality in river basins, therefore competing with agriculture and domestic consumption. A one-megawatt (MW) data centre can use up to 25.5 million litres of water a year just for cooling17 – equivalent to the daily water consumption of around 300,000 people.18 In the face of increasing competition and the challenges brought by climate change and overconsumption, water supply is increasingly at risk. If this valuable resource is not protected, the GDP of high-income countries could fall by an average of 8% by 2050 – and 10-15% for lower- income countries.19 Moreover, weather, climate and water-related disasters cause significant economic losses, totalling $4.3 trillion from 1970 to 2021. Over that half century, losses increased almost 700% with around 30% (~$1.5 trillion) generated from 2010-2019.20 As a result, sectors such as fashion or pharmaceuticals, which have not traditionally considered water a critical input to their production processes and operations, are now shifting their strategies, making water a core part of their business and ultimately recognizing that every industry is a water industry. Water offers multiple co-benefits The impacts of water quality and availability go beyond the economy, touching on people’s health, culture and values. In 2023, 25 countries housing a quarter of the world’s population faced extremely high water stress, meaning that annual water withdrawals exceeded 80% of available renewable water supply.21 Among these countries was India, whose 1.4 billion people are driving an ever- increasing demand for water. China and the US, the world’s two largest economies, faced medium to high water stress, using respectively 20% and 40% of their water supplies.22 Water holds great importance for social and cultural purposes, its cultural and aesthetic value, its ability to enhance mental health and its spiritual significance across faiths.23 These often-divergent views and uses of water can lead to disagreements and disruptions, calling for a more holistic and systemic view of water valuation and management.24 In this context, water has become an increasingly political issue, generating grounds for conflict concerning access to, or control of, water resources and uses. Since the early 2000s, the number of water-related conflicts globally has increased by more than 250%, mostly recorded in Sub-Saharan Africa and West and South Asia.25 Water faces systemic underfunding and ineffective governance Globally, water supply and sanitation have been chronically underfunded, supported primarily by public sector investment.26 This water financing gap is likely to skyrocket when factoring in the needs of societies and economies, alongside the challenges imposed by climate change, such as flood protection. Yet, the finance that has been deployed to date is often short-term and ultimately inadequate to systematically support water systems. The investment gap is compounded by a capacity and absorption gap, with the World Bank estimating an annual budget execution rate of about 72%.27 Additionally, water governance is very complex and often fragmented, as it requires the involvement of multiple institutions and stakeholders across different sectors. Water governance is typically limited by inadequate and siloed capacities, with insufficient coordination between the different levels of water management (e.g. community, urban, federal, national, international). This leads to inconsistent policies, overlapping jurisdictions and inefficient resource allocation.28 Understanding the hydrological cycle as a global common good The landmark work of the GCEW has highlighted water’s complex movements through rivers, lakes and aquifers (blue water), its presence in soils and plants (green water), and the flows of moisture formed through evaporation. This full and intricate hydrological cycle is transboundary by nature and holds immense economic and societal value. It is a global common good. Placing the hydrological cycle at the centre of efforts to rethink water action can help embrace water’s interconnectedness with climate, biodiversity and human development. It also strengthens the case for systemic governance and economic policies that reflect water’s true value and ensure equitable, sustainable management. Armed with this more comprehensive articulation of the hydrological cycle, multiple actors – including the private sector and multi-stakeholder partnerships – now bear the onus of taking urgent action. In 2023, 25 countries housing a quarter of the world’s population faced extremely high water stress, meaning that annual water withdrawals exceeded 80% of available renewable water supply. Water Futures: Mobilizing Multi-Stakeholder Action for Resilience 8

Water Futures Mobilizing Multi Stakeholder Action for Resilience 2025