Rethinking industrial water use is a business imperative

Europe faces a stark future

Across mainland Europe, the picture is similarly stark. Major rivers including the Rhine, Danube and Po have fallen to record low levels, disrupting shipping routes and forcing vessels in areas to operate with as little as 20 per cent of their usual cargo. Hungary’s only nuclear power plant was forced to shut down entirely for the first time as water levels drastically fell, while the receding Danube even uncovered the wreck of a Second World War German warship. 

This summer has exposed just how dependent our livelihoods, economies and social fabric are on water. The harsh reality is that this record-breaking summer of heat and drought may well be broken again next summer and yet again the following year. As rapid swings between too much and too little become the new norm, our exposure will only increase unless our societies learn to adapt. 

Indeed, a recent UN report by Kaveh Madani, this year’s Stockholm Water Prize laureate, explains how the world has entered an era of ‘water bankruptcy’ in which freshwater systems are being depleted faster than they can replenish, driven by long-term over-extraction, climate change and mismanagement.

Water shortages can no longer be treated as temporary emergencies but are a chronic condition demanding a fundamental systems rethink. For industry, this means rethinking how water is managed and building resilience into systems historically operating around very different assumptions.  

That is the conversation British Water set out to explore at the 10th Northumbrian Innovation Festival in July. Hosted at the Newcastle Racecourse, we convened a Rethinking Industrial Water Use sprint in partnership with ARUP, Enviro Control UK, Enterprise Ireland and Glanua, bringing together perspectives on the challenges facing industrial water users, how the sector can build greater resilience as economic growth, supply pressures and sustainability concerns collide, and where collective action – and British Water – could add value.

Understanding the industrial water challenge

Water is a fundamental input and output of industrial activity; sectors including food and beverage, manufacturing, hospitality, pharmaceuticals and energy generation all rely heavily on water to operate. Yet historically, water has been treated as a reliable, abundant and low-cost resource. Falling block tariffs, for instance, have rewarded heavy consumption, while the absence of robust data and incentive structures have made efficiency an exception rather than the norm. 

According to MOSL, non-household customers account for 30 per cent of public water demand in England. More than 50 per cent of businesses report that their water intensity has increased over the past five years, while over a third expect their water use to increase further. At the same time, government forecasts suggest England could face a daily shortfall of 5 billion litres by 2055. Climate change, ageing infrastructure and rising demand are tightening the constraints around a resource that has historically been able to be taken for granted. 

The regulatory landscape is also changing. The UK is undergoing its most significant water reform since privatisation. Ofwat is phasing out block tariffs during AMP8, meaning heavy water users will face rising bills and greater pressure to improve efficiency. More stringent environmental regulations and sustainability targets are further changing the incentives around industrial water use. 

The UK is undergoing its most significant water reform since privatisation

The rapid growth of data centres and AI infrastructure has provided a particularly visible catalyst for this conversation. Data centres use water directly for cooling purposes and indirectly for electric power needs, with demand significantly higher during hotter periods, precisely when pressure on water resources is greatest. Drawing on potable mains supplies under current Environment Agency regulatory requirements, the government’s ambition to triple UK data-centre capacity by 2030 brings competition for finite water resources into sharp focus and raises the question of how to enable industrial growth without compromising water security.

Taken together, rising demand, unpredictable supply, a changing legislative context and new industrial growth are creating a very different operating environment. Industries that depend on reliable water supplies are becoming increasingly exposed to operational, financial and regulatory risk, making it necessary to rethink how industry values and manages water, and how it can adapt to these changing boundary conditions. It was against this backdrop that British Water convened the sprint. 

From sustainability to business continuity 

Across the sprint sessions, one message resonated throughout: industrial water management needs to be approached as a business continuity issue, not simply an environmental sustainability one. As pressures on water resources mount, the question industries should be asking is: ‘what would an interruption, connection refusal or discharge constraint cost the business?’

Of course, the sustainability narrative remains important but, alone, does not always command attention at board or investment-committee level. Framing water as a business risk may move the needle more effectively and quickly. Sprint participants argued that businesses are far more likely to act when they understand that inadequate water management can directly disrupt production, revenue, expansion, compliance and risk. Water is not simply an input; it is a carrier and enabler of economic activity. Investing in resilience is thus a way to protect operational continuity and long-term competitiveness.

 Industrial water resilience means being able to maintain operations, protect assets and meet regulatory requirements as water availability becomes more volatile. It includes building greater adaptability and redundancy into water systems, for example through drawing on multiple water sources rather than relying on a singular source. It also means considering whether every process requires the highest quality of water – treating water beyond what is necessary can waste energy and resources while increasing costs.

Many industrial water users understand the importance of water resilience but often struggle to translate that awareness into practical action and measurable impact

Framing water as a business risk also unlocks opportunities to drive innovation, not simply in securing new supplies but also in using water more intelligently. Solutions exist, including smarter monitoring, leakage reduction tools, reuse technologies, greywater recycling, rainwater harvesting, water trading and circular water-energy solutions. These solutions are already proven to be technologically feasible; the barrier to overcome lies more in implementation.

 “One of the clear messages from the Sprint was that many industrial water users understand the importance of water resilience but often struggle to translate that awareness into practical action and measurable impact. The shared challenge for both industry and water sector is now more about providing practical supports, collaboration and shared learning needed to accelerate implementation,” reflected Paul Conheady of 20FiftyPartners, who led a session during the Sprint on water stewardship and resilience. 

Moving water from the periphery of corporate sustainability strategies to the centre of business planning, in the same way energy, people, production and other critical resources are considered, is pivotal in ensuring industrial users get ahead of water risk and avoid costly disruption.   

Fragmented network of relationships 

The sprint also highlighted a second challenge: industrial water users operate within a fragmented system that could benefit hugely from a more integrated network.  
Industrial customers sit within a complex ecosystem of wholesalers, retailers, developers, regulators, local authorities, consultants and solution providers, where responsibilities and incentives are not always aligned. Fragmentation makes it difficult to forecast demand, plan early and in an integrated way, agree who should fund improvement and coordinate action at the speed industrial investment requires. Sprint participants repeatedly called for clearer accountability and regular, open engagement between parties.

Better data is a key part of the puzzle. Water companies generally know what enters and leaves an industrial site, but they often have little visibility of how water is used in between. Industrial users, meanwhile, may themselves lack reliable sub-metering, timely readings or the analytical capability to identify losses and opportunities. Bringing these datasets together could support better forecasting, investment decisions and identification of efficiency gains. 

Shifting management of industrial water use from individual sites towards a more integrated approach at the catchment or industrial-cluster scale opens opportunities for reuse and recycling: one organisation’s treated effluent could become another’s supply; shared treatment, storage or transfer infrastructure may be more viable; and water, wastewater, energy and planning decisions could be better coordinated. Ultimately, industrial water resilience cannot be delivered by any one organisation acting alone.  

From sprint to industrial forum

Leaving the Northumbrian Innovation Festival, there was a clear gap and appetite for a regular platform that brings together industrial users, water companies and retailers, regulators, the supply chain and other stakeholders to address the challenges and solutions collectively. 

In response, British Water plans to launch an Industrial Forum to facilitate collaboration across this ecosystem to tackle industrial water resilience head-on and help the sector shift from shock-driven reactive responses to proactive planning. 

As the hub of the UK water and wastewater supply chain, British Water acts as a neutral convening and delivery platform with a mission to connect, inform and influence the sector to thrive. These three pillars will also guide the Industrial Forum: connecting organisations across the ecosystem; informing through knowledge exchange, case studies and site visits; and influencing policy and practice through evidence-based advocacy and by shaping the regulatory debate.  

The Forum will also help move ideas from discussion towards practical action. For example, we see the opportunity for an industrial-cluster case study pilot, mapping of sources of wastewater and demand, identifying opportunities for shared treatment, storage, transfer and reuse, and developing a pathway towards a viable pilot. No single mechanism will suit every stakeholder or catchment, but creating a space to compare evidence, test ideas and develop balanced proposals can help overcome some of the regulatory, planning and commercial barriers.

The ambition is to build a cross-sector community that helps industrial water users, and the wider economy, adapt to and build resilience against a changing environment, turning water from a growing business risk into an opportunity for innovation, growth and environmental sustainability.