This report addresses the stress on and vulnerability of the water systems through use of reliability, resilience and robustness as the key indicators of sensitivity of water systems for climate-induced failure. Current practices in the sector are examined in order to better understand the state-of-the-science for incorporating current and future variability and change in hydrology and climate in the bank's portfolio for project planning and design. New and innovative practices taking into account adaptation options for water systems and risk-based decision making in water investments are reviewed and assessed for application to investments in infrastructure.