Framing water as a financial risk: Reviewing the processes shaping a narrative

Water is increasingly framed as a financial risk in equity markets. This article illustrates that this framing must be understood as a new aspect of the wider history of the financialization of the water sector. Unlike earlier instances, where water‐related services, or water risks are the primary subjects to be financialized, water itself is here being reformed to fit market logic. This article reviews, unpacks, and analyses the factors that have enabled, reframed, and defined water as a financial risk. As such, the article goes beyond simply reviewing what has happened, but also presents a critical analysis of why and how, and the potential effects this may have. Drawing on advanced theoretical perspectives from the social sciences, specifically building on the constitutive nature of language, the role of expertise in the knowledge‐policy interface, and the sociology of quantification, it proposes that the reframing of water into a financial risk is not a value‐free exercise. Critically, it shows that the value of water, at least as it relates to company activities, could be reduced to only embody those aspects which, in quantitative terms can be shown to affect Return on Investment. To alleviate this reductive process, an ambitious multi‐ and interdisciplinary research agenda must be developed moving forward to ensure that the multiple values of water are recognized and accounted for in equity markets and beyond.