Beyond Water-Stress Scores: Assessing Infrastructure Resilience At The Asset Level

By Ágnes Tiba

Water-stress screening can identify where an infrastructure asset deserves closer attention. Assessing resilience requires further steps: understanding the asset’s water profile, the reliability and security of its supply, the pressure it places on local resources, and whether adaptation can keep it operational and economically viable over time.

For infrastructure owners and financiers, a water-stress score should be a trigger for diligence, not a conclusion about resilience.

A water-stress score can identify where competition for water is high. It cannot, by itself, establish whether a particular asset will remain operational over its expected life.

That distinction matters because water stress describes conditions at a location, while infrastructure risk depends on the interaction between that context and the asset itself.

Two assets in the same basin can face very different levels of risk. A facility with relatively low water demand may still be highly vulnerable if it requires a specific water quality, continuous supply, or has no realistic substitute. Conversely, a more water-intensive asset may face lower operational risk if it has diversified sources, robust management systems, and credible adaptation options.

The assessment therefore needs to combine the condition of local water resources with the asset’s dependency on water and its own impact on those resources.

The World Resources Institute defines baseline water stress as the ratio between total annual water withdrawals and available renewable surface and groundwater supplies. Higher stress indicates greater competition for the resource.

But WRI itself cautions against treating global screening data as a ground-truth assessment. In a 2025 technical perspective developed with examples from Unilever, WRI emphasized that Aqueduct provides a high-level, globally consistent view that should be complemented with local information on water sources, infrastructure, quality, and management conditions.

That is precisely its value and its limit. Screening can identify where closer attention is needed. Assessing infrastructure resilience requires the next step: understanding how those local conditions interact with the characteristics of the asset itself.

Six questions become critical after the initial screening.

1. What is the asset’s water profile?

The relevant question is not only how much water an asset withdraws.

It is how the asset depends on water in terms of volume, quality, timing, continuity, and substitutability, and how its own withdrawals, discharges, and water-quality effects influence the surrounding resource.

An asset’s impact matters because it can affect permitting, regulatory exposure, competition with other users, and the durability of its own access to water.

Understanding dependency and impact is therefore the first step in translating a geographic water-stress indicator into an asset-level risk assessment.

2. Can the specific source reliably meet those needs?

A basin-level indicator does not describe the source actually serving a facility.

An asset may depend on surface water, groundwater, recycled wastewater, desalinated water, or several sources. Each has different exposure to drought, declining quality, infrastructure failure, and competing demand.

Seasonality also matters. A source that appears sufficient annually may become constrained when availability falls and competing demand rises.

3. Is access secure over the life of the asset?

Physical availability does not guarantee access.

Water rights, supply arrangements, allocation regimes, and discharge permits determine whether an asset can continue using the resource it depends upon.

Major infrastructure may operate for decades, while permits or allocation arrangements can be reviewed much earlier. New users may enter the basin, regulation may evolve and climate change may alter both supply and demand.

4. How vulnerable is the operating model?

The next question is what happens when the required volume or quality is unavailable.

Can the asset continue at reduced capacity? Is there storage? Can the process tolerate lower-quality water? How quickly does a constraint affect production, revenue, safety, or continuity of service?

This is where dependency becomes operational risk.

5. What management and adaptation options are genuinely available?

Recycling, treatment, storage, alternative supplies, process changes, and different cooling technologies can all reduce vulnerability.

But technical availability does not mean economic viability. Adaptation may require additional capital expenditure, higher operating costs, more energy, new permitting, or additional infrastructure.

The relevant question is whether those measures are technically feasible, timely, and affordable.

6. What residual risk remains?

After realistic management and adaptation measures are considered, can the asset continue to provide its intended service and remain operational and economically viable as local conditions evolve?

This is where water-risk screening becomes an infrastructure-resilience assessment.

Palo Verde Generating Station in Arizona illustrates why this distinction matters. Arizona Public Service states that Palo Verde is the only U.S. nuclear power plant not located on a large body of water and that it uses treated municipal wastewater for cooling.

Its location in an arid region does not by itself explain its water-risk profile. The source of the water, the infrastructure required to treat and transport it, competition for that resource, access arrangements, and the technical and economic feasibility of reducing consumption all influence resilience.

In a 2020 communication, APS reported increasing competition and costs for treated effluent and described work with Sandia National Laboratories to evaluate technologies intended to reduce water use.

The example should not be read as evidence of the plant’s current residual risk. Its value is methodological: it shows that a basin-level score cannot reveal the operating design, access conditions, costs, and adaptation options that determine how water risk is experienced at asset level.

Water-stress scores remain valuable because they allow consistent screening across large portfolios and geographically dispersed assets.

Their role should simply remain clear.

Exposure belongs on the map. Infrastructure resilience has to be established at the asset level.

Ágnes Tiba is Sustainable Finance & ESG Risk Lead for SFIL's export-credit activity, focusing on physical and transition climate risk across financing and infrastructure transactions. Her background includes credit-risk analysis and financial-markets valuation. The views expressed are her own.