COMMENTARY: Time to treat the Colorado River like business infrastructure

The Colorado River is sending business leaders a clear warning: Ignore water constraint risks at your own peril.

Like many other water systems, the infrastructure, policies and agreements that govern the river were built for a different era. One with fewer people, lower demand and a very different hydrology. Today, those assumptions have collapsed. The system is under severe strain, and the consequences extend far beyond water management.

The Colorado River supplies water to 40 million people and supports an economic engine that drives an estimated 16 million jobs and more than $1.4 trillion in annual activity. When that foundation becomes uncertain, the impacts show up quickly through rising costs, constrained growth, delayed projects and supply chains under strain.

Formal negotiations among public agencies and sovereigns remain essential, and they must remain in the arena for major decisions on allocation, operations and governance. But negotiations are only one part of building a more resilient basin.

Since 2022, the Bureau of Reclamation has deployed more than $4 billion in federal investments for drought resilience and water infrastructure across the West, helping to accelerate projects, reduce risk and give communities more tools to adapt. The scale of public investment matters, but government cannot do it alone. The private sector also has an important role. Increasingly, companies are recognizing that protecting water security will require collective action and investment beyond their own operations,

That shift in perspective should lead to a shift in action. It is no longer enough to optimize operations within the fence line. Businesses must ask whether the broader systems they rely on can withstand increasing volatility and what role they can play in strengthening the systems that they and the communities they serve depend on.

There are clear steps leaders can take now. Improve efficiency before water constraints become more severe. Upgrade systems that leak, lose pressure or waste energy. Build water resilience into site planning, operations and supply chain decisions. Support collaboration in the regions where business growth depends on shared water systems.

That is why the private sector’s entry into this work matters. Through the Water Resilience Coalition’s Colorado River Basin Collaborative, Grundfos joined Aldi, Amazon, Ecolab, EdgeConneX, The Coca-Cola Foundation, Vantage and Xylem in committing more than $32 million to projects that strengthen water security, watershed health, agricultural resilience and community outcomes across the basin. These are not acts of charity. They are practical moves to protect future competitiveness.

Some companies are already proving what this looks like. In Las Vegas, MGM Resorts has invested in systems that capture and recycle nearly 75 percent of the water used across its properties as a core business decision. In a region where water reliability underpins tourism and economic activity, efficiency became the standard because it made operational and financial sense. That is the kind of example business leaders should be studying now.

When water resilience becomes a business imperative, companies can move quickly, setting new industry standards. And it reshapes how companies design, build and operate.

That is where leadership matters most. Every company that depends on water has a role to play. By acting within its own operations, supply chains and investments, companies can reduce their exposure and strengthen these systems.

Leadership today means treating water resilience as core business infrastructure. It means asking harder questions about risk. It means investing earlier. It also means recognizing that long-term performance depends on the health of the systems outside a company’s walls as much as inside them. Businesses bring something essential to this moment: capital, innovation and the ability to scale effective solutions quickly.

The consequences of inaction will not be evenly shared. Communities already facing water insecurity will be the first to feel the impact, but no business operating in the region is insulated from those effects. By the time shortages disrupt metropolitan systems and major industries, the most flexible and cost-effective options are already gone. And while the pressures may look different from basin to basin, the lesson extends far beyond the American West.

For business leaders, the takeaway is simple: If you care about your bottom line, you must care about the water systems that make that bottom line possible. Companies that want to grow in water-stressed regions must help strengthen the systems and communities that make that growth possible.

The question is no longer whether water will shape business decisions. It already does. The question is whether business leaders will act while there is still room to adapt or wait until the system forces that decision for them.

Poul Due Jensen is group president and CEO of Grundfos. Camille Calimlim Touton is former commissioner of the U.S. Bureau of Reclamation.