Environmental Impacts of the Water Industry

Worldwide, agriculture accounts for 70% of all water consumption, compared to 20% for industry and 10% for domestic use . In industrialized nations, however, industrial and domestic uses consume more than half of the water available for human use. In Europe, more than 160 billion m³ of water is abstracted annually with an average breakdown of:
+ 44% for crop irrigation and livestock
+ 41% for industry and energy production
+ 15% for domestic use

The NEC framework for this industry includes water abstraction (the process of extracting water from a natural source), water treatment (filtering and chemical treatment to prepare it for drinking or orther uses) and distribution via water networks; it also includes sewage collection and wastewater treatment.

For this sector, the environmental impacts mainly occur upstream (water abstraction, management of land and water resource) and downstream (water discharge with impacts depending on the wastewater treatment performance, sludge treatment…).

Overall, climate change, water consumption, land use and waste management are the main environmental issues that are both key for the industry and measurable at project, activity or company level. However, given the low level of company disclosure on environmental issues, the water framework relies on a simplified, norm-based, qualitative approach.

Example: Measuring the Impact of Water Abstraction

For water withdrawal, the main measurable environmental indicator is the level of biodiversity protection. To reduce the costs of removing pesticides, nitrates and antibiotics from water, companies are encouraged to set up capture protection programs such as partnerships with farmers to develop organic agriculture, mechanical weeding, etc.

Therefore, the NEC Biodiversity component calculation is based on actions set up
to protect ecosystems surrounding the abstraction point:

if a systematic action plan
is set up to protect biodiversity,
such as converting abstraction areas
into organic farms or mechanical weeding

if action plans are limited
and reflects
the world average

if there is
no specifc action plan
in place

How the NEC measures impacts for the water supply industry

In brief, the methodology used to calculate the environmental impacts of the water supply industry is based on these factors.


The main environmental issues that are computable
are upstream and downstream:
+ Biodiversity protection (for water abstraction)
+ Water conservation (preventing losses)
+ Wastewater treatment level
(reducing impact over ecosystems and water resources)


+ Actions undertaken to protect biodiversity (see example chart above)
+ Water loss rates / leakages
+ Treatment of wastewater (complete, incomplete or inexistent)

Almost there… Just a few details before accessing the full handbook

    By clicking this button, you submit your information to the NEC Initiative coordinator,
    who may use it to communicate with you regarding the NEC Initiative.


    Designed to inform and empower investment decision makers, it uses physical data from across the whole value chain to provide a snapshot of an activity’s net environmental contribution and it can be applied at a company, portfolio, index or product/source level.

    Learn More


    The NEC evaluates the impact of economic activities based on environmental issues including climate change, water and biodiversity impacts.
    Discover how the tool can be used by investors and corporates.

    Learn More


    In June 2021, the NEC Initiative became a Mission-led company (“entreprise à mission”) to construct, update, disseminate and apply this metric. We are currently welcoming new members.

    Join us