Schneider Electric, a global energy technology leader, has released The Water Crunch Report, new research revealing that water is now one of the biggest risks to industrial business continuity across the UK and Europe, ranking as highly as cyberattacks and supply chain disruption. This echoes last year’s U.S.-focused research from Schneider Electric, where over half (56%) of business leaders said water-related risks will grow faster than other infrastructure risks in the coming years.
The Water Crunch Report surveyed senior leaders at industrial companies and decision-makers at water utilities and municipalities across Europe. In the past two years, industrial leaders say water stress has already pushed up their operating costs (44%), strained infrastructure and maintenance budgets (38%), and disrupted supply chains (30%). If a serious water supply disruption hits tomorrow, 44% of businesses believe their operations would start to suffer within 24 hours. On average, over half (52%) of industrial leaders expect water quality or availability to become a serious barrier to their organization’s growth within the next five years, by 2031, and 1 in 7 (14%) say it already is a barrier to their operations or growth today.
The findings land against the backdrop of Europe’s most severe drought conditions in decades, with the knock-on effects on the freight, energy and agriculture sectors providing a stark reminder that these pressures are no longer hypothetical.
“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. “Just as the energy transition reshaped industrial strategy over the past decade, water efficiency will shape the next one. AI-powered industrial intelligence gives companies unprecedented visibility into how water is used, wasted and recycled. The challenge is no longer understanding the problem, but acting at the pace required to secure Europe’s industrial future.”
“It’s easy to write off this summer’s droughts and impact on industry as a one-off, but this is now a structural feature of operating in Europe,” said Sophie Borgne, Water & Environment Segment president of Schneider Electric. “Right now, around half of the EU and UK are under some level of drought,” according to the EU’s European Drought Observatory. 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. The organizations investing in smart water technology are turning water efficiency into a competitive advantage.”
Awareness versus adoption
Smart water technology is widely recognized as a solution to water management, but implementation is not keeping up with awareness. The gap isn’t down to skepticism. Belief in these tools is close to universal: 86% of industrial leaders and 98% of water utilities say smart water technology can cut operating costs, and over 80% say it protects business continuity and strengthens sustainability performance.
Despite this, industrial leaders show particularly high awareness of technologies they haven’t yet deployed: 58% are aware of digital twins or network modeling tools but have not installed them, while 57% of water utilities say the same of predictive analytics or AI-enabled water management.
The encouraging news is that industry isn’t waiting for the problem to worsen. Nearly all organizations surveyed (100% of water utilities and 98% of industrial leaders) say water availability or quality has already shaped major decisions, from increased investment in water efficiency (47%) to formal board-level reviews of water risk (43%). More than half of industrial leaders surveyed have installed automated controls (56%) and smart meters (55%); smart meter adoption climbs even higher among water utilities, to 76%.
Cybersecurity is climbing up the agenda too, with over half of both industrial leaders and water utilities naming it among the top risks to manage as water systems become more connected and digital.
But there is clear headroom for growth: many leaders are aware of technologies designed to optimize operations but haven’t yet installed them, meaning the biggest gains may still be ahead. For European business leaders, the takeaway is straightforward: water risk now needs the same active management as energy or cybersecurity. Closing this gap is likely to matter most for the industries already feeling the cost of water stress.
“For nearly two decades, water has been overlooked in the climate conversation, attracting a fraction of the investment given to energy or carbon. With Europe warming more than twice as fast as the rest of the world, pressure on water supply is intensifying, and The Water Crunch Report confirms the mindset is shifting: 47% of industry leaders have already increased investment in water efficiency, and 43% have taken water risk to board level. Water security is finally being treated as a business priority, not an afterthought,” said Tom Freyberg, independent water and environment expert.
Forward-thinking utilities are leveraging existing technologies to minimize impact on their customers. To ensure the supply security of its water network, Danish utility Aarhus Vand relies on the forecasting capabilities of a digital twin. Schneider Electric’s EcoStruxure™ Water Advisor – Water Simulation was deployed to help the utility remotely monitor its water supply network to easily and precisely identify potential leaks and supply fluctuations. Using data from points on the network, Water Simulation anticipates the impact of planned and unplanned events so Aarhus Vand can take the best actions to address them quickly, minimizing waste and providing a reliable supply of high-quality water for its customers. The provider also benefits from lower energy use and costs thanks to improved efficiency.
