The Forum was moderated by Jennifer Simmonson, MAI, of Marshall & Stevens, and brought together perspectives from Megan Nicholas Harper of Nuveen Natural Capital, Rosemary Knight of Stanford University, Nati Louzon of IDE Technologies, and Bobby Majumder of FBT Gibbons.
As moderator Jennifer Simmonson, MAI explained at the outset, the Forum was designed around a “solutions-first approach,” with the goal of sharing actionable insights that can inform decision-making and advance innovative, globally informed solutions.
Across the discussion, one theme repeatedly surfaced: water challenges cannot be reduced to a single issue, user or solution. Surface water and groundwater are interconnected. Agriculture, communities and industrial users all have water needs. Technology can expand available options, but infrastructure, cost and operating requirements matter. And increasingly, water availability and resilience are becoming considerations in investment, underwriting, valuation and siting decisions.
As Simmonson summarized at the conclusion of the Forum:
“Long-term decision-making fundamentally must consider water opportunity in addition to water risk.”
The following are key takeaways from the Forum’s four principal areas of discussion.
1. Water in the West: A Systemic Crisis
The panel’s discussion of Western water began with a fundamental distinction: drought may expose water problems, but the underlying challenges are broader and, in many cases, structural.
Megan Nicholas Harper characterized the Western water crisis as “much more of a long-term structural shift” than a temporary drought challenge. In her view, drought acts as a stress test, revealing vulnerabilities that have developed over decades.
Groundwater is an important part of that story. Rosemary Knight noted that declining reservoirs and rivers are readily visible, while groundwater is hidden. She described groundwater as a resource that was once viewed as a freshwater “savings account” that could be drawn upon when surface supplies were insufficient. The problem, she said, is that “we are draining our savings account, and the groundwater levels are going down.”
For Knight, better management begins with understanding what is happening beneath the surface. Advances in geophysical methods, including satellite, airborne and ground-based measurements, are making it increasingly possible to see and understand groundwater systems that were previously difficult to characterize. Her guiding principle was simple:
“You can’t manage what you can’t measure.” — Rosemary Knight
California’s Sustainable Groundwater Management Act (SGMA) brings these issues directly into decisions about agricultural land. Nicholas Harper said the agricultural assets best positioned to navigate this transition are those with flexibility and resilience: diversified water portfolios, reliable surface-water access, the ability to participate in groundwater recharge or banking, crop flexibility, effective local governance and investment in water-management technology.
Her conclusion reframed the issue from simply having water to managing it:
“The farms that will thrive are ones that have built flexibility, efficiency, and resiliency into their operations today.” — Megan Nicholas Harper
The discussion also made clear that groundwater management extends beyond agriculture. Knight pointed to dry domestic wells, land subsidence, infrastructure damage, degraded water quality and impacts on natural ecosystems as consequences that need to be considered when water is allocated.
And the answer is unlikely to be a single new source of supply. Nati Louzon emphasized that communities can no longer rely on only one or two sources. Desalination and municipal and industrial water reuse can instead become part of a broader portfolio, alongside conservation and improved water management.
Key takeaway: The Western water challenge is not simply about surviving the next drought. The panel described a longer-term need to bring demand and sustainable supply into better balance, improve understanding and management of groundwater, diversify water sources, and build greater flexibility and resilience into the assets and communities that depend upon them.
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2. Infrastructure & Technology Responses
If the first portion of the Forum defined the scale of the challenge, the second focused on what can be done about it.
Groundwater recharge emerged as one of the most promising areas discussed. Knight called recharge in California “such a good news story,” pointing to the opportunity to capture water during wet periods and store it underground for future droughts. She explained that California has substantial underground storage capacity and described both natural recharge and managed aquifer recharge, including the use of floodwater to replenish groundwater systems.
But where recharge occurs matters. Knight’s work uses geophysical measurements to determine whether water placed at a particular location can efficiently move through the subsurface into an aquifer. That illustrates a broader point running through the Forum: infrastructure decisions become more effective when they are informed by better data about the natural system.
Recharge also requires safeguards. Knight cautioned that efforts to increase groundwater quantity need to be accompanied by active water-quality monitoring to avoid unintended consequences, including potentially moving residual contaminants into drinking-water supplies.
Capital is another consideration. Nicholas Harper emphasized that recharge and water banking require infrastructure, operating expertise and long-term investment.
She pointed to the need for conveyance facilities, land, operations, maintenance, monitoring, accounting and governance, and noted that institutional capital can help fund projects whose water-security benefits may be realized over decades rather than years.
Technology is also expanding the range of potential water sources. Louzon described improvements in membranes, treatment processes and recovery rates that are making recycled water increasingly practical, while combinations of treatment technologies are allowing more water to be recovered for irrigation, industrial and other uses.
The same technological evolution is occurring among water users. Bobby Majumder discussed four cooling approaches for data centers—rear-door heat exchangers, direct-to-chip cooling, single-phase immersion and two-phase immersion—as alternatives that can improve water-use efficiency compared with traditional cooling approaches. He emphasized that developers increasingly need to incorporate both water requirements and total cost of ownership into the initial business case for a facility.
Key takeaway: Technology can expand water supplies and reduce demand, but technology alone is not the solution. The Forum repeatedly connected successful implementation to data, infrastructure, capital, monitoring, operational expertise and long-term management.
3. Competing Uses: Data Centers vs. Agriculture
The Forum’s third discussion challenged the idea that water allocation can be understood simply by comparing which industries consume the most water.
Nicholas Harper noted that discussions about agriculture often focus on volume without considering what that water produces, including food, jobs, and economic activity. The more useful question, she said, is not simply who uses the most water, but “how efficiently and productively is that water being used.”
The same principle applies to data centers. While Nicholas Harper described their statewide water footprint as relatively small compared with the overall California water system, she stressed that aggregate figures can obscure the more important issue: where the demand occurs.
A new source of demand can have a very different impact in a water-stressed or overdrafted basin than it would in an area with more resilient supplies. Nicholas Harper therefore distinguished between total water use and water stress, arguing that the fundamental challenge is adding demand to systems that are already allocated.
Knight reached a similar conclusion from a land-use perspective: “location, location, location.”
Decisions should begin with an understanding of the natural system, where surface water and groundwater exist, how they are connected and what uses are best suited to a particular location.
Majumder likewise cautioned against broad comparisons of water use and advocated for more localized, watershed-level analysis. He emphasized that the issue should not be framed as a binary choice between agriculture and data centers and said the different users can “coexist peacefully” and effectively.
Louzon added another dimension: siting industrial users near alternative water sources. He offered the example of locating a data center near a wastewater treatment plant so recycled water could become an independent source for the facility rather than relying on drinking water.
Key takeaway: The panel did not frame water management as a choice between agriculture, data centers or other users. Instead, the discussion pointed toward localized decision-making that considers the condition of the water system, the type and efficiency of use, available water sources, appropriate land use, and opportunities to reuse water or reduce freshwater dependence.
4. Valuation Volatility & Investment Risk
The final discussion brought the preceding themes together around capital and asset value.
The premise was straightforward: water availability is increasingly relevant to how assets are evaluated, financed, developed and managed. The Forum’s final topic specifically examined the influence of water scarcity on valuation, underwriting, investment analysis, long-term resilience and the vulnerability of different assets to water stress.
Majumder said water scarcity is a financially material investment risk for data centers and described lenders and asset managers as incorporating water risk and community opposition into credit assessments. At the same time, he noted that near-term water sourcing costs remain a relatively small component of overall data-center operating expenses compared with power.
For agricultural investors, Nicholas Harper described an even more fundamental change in underwriting. Ten years ago, water was an important operational consideration, but there was often an underlying assumption that supply would continue to be available. Today, she said, her team spends “as much time evaluating water itself as we are the land.”
Technology, water-source diversification, recharge potential and regulation now enter that analysis. Nicholas Harper described a shift from valuing agricultural assets primarily on a per-acre basis toward what she called a “water-adjusted productivity lens.” Two properties with similar soils and crop potential can present very different investment profiles if one has multiple water sources, stronger recharge capabilities and greater flexibility under SGMA.
The question investors are asking has therefore changed:
“The question is no longer simply, how productive is this land? It’s, will this asset be able to be reliable and affordable with water 10, 20, 30 years from now?” — Megan Nicholas Harper
For data centers, Majumder described a similar evolution. Siting once centered primarily on land and power. He emphasized that water resilience must now be included as a third, “co-equal constraint,” requiring developers to examine watershed stress, local regulatory conditions and cooling technology rather than relying on broad portfolio-level assumptions.
“Now, you’ve got to include water in that three-variable calculus, and water resilience, really, as a co-equal constraint amongst the three. You have to have all three.” — Bobby Majumder
Knight broadened the valuation discussion beyond commercial assets. She noted that natural ecosystems are also vulnerable to water stress precisely because their value has not always been adequately recognized. In decisions about water allocation, she repeatedly advocated giving nature “a seat at the table.”
Key takeaway: Water is moving closer to the center of long-term asset analysis. Across agriculture, data infrastructure and natural assets, the Forum highlighted the importance of understanding not merely whether water is available today, but whether supply is durable, affordable and resilient, and how regulation, infrastructure, technology and local hydrology could affect that equation over the life of an investment.
From Water Risk to Water Opportunity
The Forum did not present a single answer to the challenges surrounding water, nor did the panelists always approach those challenges from the same perspective. That was part of the value of bringing together expertise in groundwater science, institutional agriculture, water technology and infrastructure, and data-center development and regulation.
What emerged instead was a set of interconnected considerations: better measurement and data; more resilient and diversified water supplies; recharge and reuse; technology that can reduce demand or create new sources; infrastructure and capital capable of supporting those solutions; and investment and development decisions that reflect local water conditions.
That is also why the discussion does not end with these key takeaways. In four forthcoming pieces, we will take a deeper look at each of the Forum’s core topics, Water in the West, Infrastructure & Technology Responses, Competing Uses, and Valuation Volatility & Investment Risk. We will draw on the panelists’ perspectives and examples to explore each issue in greater detail.
As Simmonson observed in closing, the challenges are significant, but so are “the opportunities to respond through better technology, smarter infrastructure, more informed investment decisions, and thoughtful water management.”
