More than half of European industrial leaders expect water availability or quality to become a serious constraint on growth within five years, as rising costs and supply disruptions put pressure on business operations.
Research commissioned by Schneider Electric found that 52% of industrial leaders surveyed across the UK and Europe expect water-related problems to become a significant barrier to growth by 2031. One in seven said water was already constraining their operations or expansion.
The findings highlight how water scarcity is emerging as a business continuity risk alongside cyber-attacks and supply chain disruption. The survey of 210 industrial business leaders and 130 water system decision-makers, conducted by Censuswide in June, covered the UK, Ireland, France, Germany, Italy, Spain, Sweden and Denmark.
Water stress is already affecting industrial costs and infrastructure. Some 44% of industrial leaders said it had increased operating costs over the previous two years, while 38% reported pressure on infrastructure and maintenance budgets. A further 30% said it had disrupted supply chains.
The potential for disruption is immediate: 44% of respondents said their operations would begin to suffer within 24 hours of a serious interruption to water supplies.
The research comes amid growing concerns over drought and water availability across Europe, where shortages can affect energy generation, freight transport, agriculture and industrial production.
“Europe cannot afford to treat water as an environmental issue alone. It is now a competitiveness issue,” said Gwenaelle Huet, Executive Vice President of Industrial Automation at Schneider Electric.
Huet argued that digital technologies, including artificial intelligence, could help manufacturers identify where water is being used, wasted or recycled. However, the survey suggests that adoption remains uneven despite widespread recognition of the potential benefits.
Some 86% of industrial leaders surveyed said smart water technologies could reduce operating costs, while more than 80% believed they could improve business continuity and sustainability performance.
Yet 58% said they were aware of digital twins or network modelling tools but had not installed them. Among water utilities, 57% reported the same gap between awareness and deployment for predictive analytics or AI-enabled water management.
The results point to a challenge familiar across industrial digitalisation: recognising the potential of technology does not necessarily translate into investment or implementation.
There are signs that water management is gaining attention at board level. Almost all industrial respondents, 98%, said water availability or quality had influenced major business decisions. Nearly half, 47%, had increased investment in water efficiency, while 43% had reviewed water risks at board level.
More than half had installed automated controls, at 56%, or smart meters, at 55%. Adoption of smart meters was higher among water utilities, reaching 76%.
Greater connectivity also introduces security considerations. More than half of both industrial leaders and water utilities identified cybersecurity as one of their leading risks as water systems become increasingly digitalised.
Sophie Borgne, Water and Environment Segment President at Schneider Electric, said water reuse could reduce dependence on rivers and reservoirs under pressure. She cited figures showing that just 2.4% of treated urban wastewater is reused across the EU.
“Reusing water can reduce our dependence on rivers and reservoirs already under strain, yet only 2.4% of treated urban wastewater is reused across the EU today,” Borgne said.
