Guest Editorial by Magdalena Rzeczkowska, Chairof Practice 'Water-Smart Economy'

Water resilience has a value that can be difficult to see: the production that continues, the infrastructure that remains reliable, the losses that never materialise. Its economic contribution lies partly in preserving the conditions on which prosperity and competitiveness depend. When those conditions fail, water’s economic and strategic importance becomes impossible to overlook.

The European Water Initiative announced in the State of the Union brings that dependence into the political conversation. Importantly, the speech also connected climate resilience with the insurance gap and the need for better risk management. Together, these priorities point to a broader economic question: how is its value reflected in the decisions that shape an economy? Repairing a network addresses a visible loss. Building resilience requires us to look further, at how investment, production, infrastructure and development depend on water, and at how the risks of water scarcity and disruption are shared and managed.

Water Europe’s vision of a Water-Smart Society begins with recognising and realising water’s value to ensure water security, sustainability and resilience. The Water-Smart Economy is the economic dimension of that vision: an economy in which water is recognised as a strategic asset that enables sustainable prosperity, competitiveness, security, societal well-being and environmental resilience. It operationalises that vision by embedding the value of water into how we grow, produce, invest and innovate. This is also the agenda that Water Europe’s Community of Practice on the Water-Smart Economy is advancing: bringing together the economic, financial and investment dimensions of water resilience and translating them into practical approaches for decision-makers. Water becomes part of how prosperity is understood, rather than a constraint considered only when it interrupts growth.

Insurance makes this distinction tangible. A contract can provide financial protection against a loss, but it cannot replace the prevention and adaptation that make risks manageable. The new Water Europe White Paper on Insurance and Water-Resilience Investment, developed within the Community of Practice on the Water-Smart Economy, places these functions within a shared framework: insurance provides a safety net for residual risk, while prevention and adaptation address the underlying exposure. Insurability is shaped long before a policy is written, in choices about where to build, how to design and how to prepare.

The investment challenge follows the same logic. The benefits of resilience can extend well beyond the organisation paying for it. A measure that protects infrastructure may also preserve business continuity, support communities and safeguard ecosystems. Recognising those shared benefits helps explain both the value of investment and the difficulty of financing it. For a Water-Smart Economy, the challenge is therefore not only to mobilise capital, but also to turn resilience needs into investable propositions. Available capital and investable projects are not the same thing; connecting them requires credible preparation, clear responsibilities and arrangements that reflect who benefits.

A Water-Smart Economy therefore asks a different question, not simply what water costs, but what it makes possible. Its defining insight is that water resilience has economic value before disruption reveals its price, and that recognising this value is essential to better decisions on investment, risk and growth.