Water-use efficiency (WUE) enables the comparison of the value generated from water between countries, industries and companies, and over time. Such comparisons can overlook crucial underlying differences. How can WUE be best used as a comparator? Increases in WUE assumed that water consumption has become decoupled from economic growth. This overlooks structural changes and globalization resulting in water-intensive activities being eased out of WUE reporting. Incomplete participation in corporate WUE surveys and the absence of external verification should also be considered. This paper explores ways of developing more valid WUE comparators and the value of WUE for investors concerned about water risk.
