On June 4, 2025, the European Commission published its European Water Resilience Strategy (EWRS). The document sets out a common direction for Member States, civil society, and businesses, placing water resilience at the heart of the EU competitiveness and sustainability agenda. It includes over 30 actions, mostly aimed at governments, but with implications for sectors including agriculture, energy, and industry.
The European Commission’s goal is clear: build a more water-resilient Europe. But with limited new legislative or regulatory plans, the question is: How can businesses engage meaningfully with this strategy? And where should they start?
In our view, there are three key areas of interest for companies as they assess their role in Europe’s emerging water-smart economy:
1. Show business can act responsibly without being told how
The European Commission wants to increase private investment in water resilience. However, it has not explicitly told businesses how to do so. Previous leaked drafts included a water use hierarchy, which prioritizes in decreasing order: reducing water demand, increasing water efficiency, increasing reuse, and increasing supply. The final EWRS included no such hierarchy, leaving businesses with limited guidance.
“The EWRS sets the tone for how the water efficiency imperative will shape Europe‘s future economy. Businesses that proactively reduce demand, improve reuse, and invest in shared solutions won‘t just mitigate risk—they’ll also build trust and increase their resilience."
― Sabine Wiren-Lehr, Edelman Public & Government Affairs Brussels
Absent formally approved guidance, the hierarchy still offers a useful guide for companies planning investments.
The EWRS acknowledges two major realities: the investment gap to fix Europe’s water cycle is large, and progress depends on collaboration across sectors. Yet, the strategy offers little guidance for business. The exception is a new binding sustainability target for data centers, which could signal future sector-specific rules.
The strategy instead introduces an aspirational 10% efficiency target for Member States and supports platforms like the Water-Smart Industrial Alliance and the European Water Academy. These are unlikely to help companies identify where to invest or what to prioritize. Funding tools like the EIB Water Programme and the Water Investment Accelerator focus mostly on public-sector loans and large-scale public-private partnerships. Smaller firms and cross-sector groups are left with few clear entry points.
Since the EWRS does not link water-related investments to the EU Green Taxonomy, there is also no clear fit with ESG frameworks. In these circumstances, the water use hierarchy is the best guide businesses have.
Our insight for companies: You can still use the water use hierarchy: reduce demand, increase efficiency, reuse, and replenish. Make this a guiding principle for your water-related investments, even though the EU will not make it law. Don’t wait for more rules. Start aligning investments now.
2. Pollution control presents opportunity, risk, and uncertainty, all at once
Tackling water pollution is another focus of the strategy. It highlights PFAS, microplastics, and nutrient runoff as key concerns, especially for the agri-food sector, which may face increased scrutiny.
The EWRS proposes new public-private partnerships for clean-up research and innovation, targeted for launch by 2027. It remains unclear who qualifies and how businesses can participate. There is a clear opportunity for companies to step forward and shape the agenda.
The Commission will rely on Member States and existing laws to manage water pricing or pollution cost recovery in the strategy. The strategy also stops short of broader extended producer responsibility (EPR), beyond the existing Urban Wastewater Treatment Directive. Instead, it proposes a study of EPR’s costs and implications for sectors like pharmaceuticals and cosmetics.
These are mixed signals: responsibility for dealing with pollution using the polluter-pays principle is not harmonized or shared, and it may fall more on national governments and thus vary by market. This creates some uncertainty for businesses and reduces their influence over how funds are spent.
Our insight for companies: Consider engaging early. Businesses, especially in agri-food, can connect with the Commission and national trade bodies to influence the design of public-private partnerships. This is the time to assess your reputational and regulatory exposure.
3. Remember that efficiency alone won’t solve shared water risks
The EWRS heavily promotes water efficiency, urging companies to improve their internal water use. This is a necessary step. However, business water risks from scarcity, pollution, and flooding are shared across sectors and regions. They cannot be managed in isolation.
The Commission committed to engaging with Member States to accelerate river basin action, but the Strategy does not provide incentives or structures for basin-level collaboration for business. Its calls for restoring the water cycle through nature-based solutions are welcome, but there is no clear direction to businesses navigating the choices between grey and green infrastructure.
Water governance remains centered on implementing the Water Framework Directive, which puts Member States and water authorities in the lead. This could result in fragmented approaches across the EU, making it harder for companies operating in multiple markets to act consistently or effectively.
Our insight for companies: Go beyond internal efficiency. Join or initiate collaborative action in your river basin. Tools like the Alliance for Water Stewardship offer structured models to manage shared risks.
A final thought
The EWRS signals a shift in Europe’s approach to water, but it leaves businesses with limited guidance. Companies that move early by adopting clear water use priorities, engaging in policy shaping, and collaborating locally will be better placed to manage risks and shape future regulation. If you would like support identifying where your operations face water risks or how to engage constructively with the EWRS agenda, our EU Water Policy Team can assist.
Materials presented by Edelman's public & government affairs experts. For additional information, reach out to Sabine.Wiren-Lehr@edelman.com or Clement.Cardon@edelman.com
