What is the water sector in Poland?

To ask myself the title question: What is the water sector? I was inspired by a conversation among people interested in investing in this area. Each participant in the meeting had his or her own ideas about what economic activities and activities are related to the water sector. However, when it came to classifying investments, the ideas were very quickly limited to sewage treatment plants, sewage systems and water supply systems.

How do we commonly define the water sector?

So after that conversation, I began to wonder and ask various experts how they viewed the water sector. I even went so far in my search as to ask ChatGPT for a definition. Here is his answer:

The water sector (otherwise known as the water management sector) includes all activities, institutions, technologies and services related to water management. Its purpose is to meet society’s needs for access to water and to ensure its rational and sustainable use. It is crucial to the economy, the environment and public health.

Wikipedia’s English version, on the other hand, states that:

The water industry provides drinking water and wastewater services (including sewage treatment) to the residential, commercial and industrial sectors. Typically, utilities operate water supply networks. The water industry does not include manufacturers and suppliers of bottled water, which is part of beverage production and belongs to the food sector.

The water industry includes, among other things, water engineering, operationsconstructionconstruction sewage treatment plantssewage treatment plants, supplysupply of equipmentequipment and specialized chemicals for water treatment.

The water industry serves other industries, including the food sector that produces beverages such as bottled water.

What these readily available definitions, and many of the answers I received, have in common is that the water sector includes the provision of drinking and industrial water and the collection of wastewater. I would venture to say that this is how the water sector is commonly perceived.

Is the water sector just water and sewerage?

With this understanding, as it is commonly understood, the water sector is actually limited to the activities of municipal companies, Polish Waters and sometimes municipalities. This extremely narrow-minded approach causes us to miss the proper importance of water in the economy.

If we talk about the water sector only in the context of water supply, sewerage and hydraulic engineering, we will quickly come to the conclusion that it is a very small and specialized area. In addition, it includes virtually only activities related to government and local government entities. In my opinion, this takes responsibility for the water sector and water more generally off the shoulders of other entities, including, above all, business. The activities of manufacturing, service or construction companies, unless they manufacture or install pipes or build reservoirs, are not related to the water sector. And this is already an erroneous conclusion.

Activities in the water sector

In that case, how else can the water sector be viewed? In my mind, for years, water management and something that can be called the water sector has been drawn horizontally by the traditional division into industries. Thus, the water sector includes transportation – in the context of inland navigation, energy – after all, we have hydroelectric power plants, but also water-dependent conventional energy, and many others.

If I were to organize my vision of the water sector I would point out that it includes:

1. Supply of drinking water and water for industry and services – waterworks, intakes, water treatment plants, desalination plants;
2. Sewage disposal and treatment – sewage systems, sewage treatment plants;
3. Industrial water management – the use of water in industrial processes;
4. Water management in agriculture – irrigation, land reclamation, fish farming;
5. Water conservation and management of water resources – monitoring of water quality and quantity, renaturalization, retention management, protection from pollution;
6. Water engineering – construction and maintenance of hydrotechnical structures;
7. Tourism – management of tourist infrastructure related to the waters (marinas, stands, navigable routes), swimming pools;
8. Flood and drought risk management – planning and implementation of drought and flood control measures, emergency management;
9. Power industry – energy production from water, cooling installations in power plants;
10. Construction – plumbing systems in buildings;
11. production, services and works for the above activities;
12. Urbanized land management – integrated and sustainable stormwater management (SUBS).

Probably this list could be significantly lengthened and made more specific, such as water for cooling systems in the IT industry or fire protection. Viewed this way, the water sector is very broad and includes virtually all areas of the economy, even defense. Consequently, water management needs have a much broader meaning and more responsible parties.

Does this mean that the water sector is gone?

So many traditionally defined industries include elements related to water management that the thought arises quite quickly that one can actually say that such a thing as a water sector does not exist. I somewhat agree with this statement. Water elements are embedded virtually in most types of economic activity. Responsibility for effective water management should be a permanent part of business operations. This is indicated by the sustainability reporting requirements of the CSRD. Along with climate, pollution, biodiversity and the circular economy, water is a topic that must be compulsorily assessed in terms of its relevance to business operations. There are no exclusions in the directive and reporting standards for some non-water sectors, and the water sector is not included in the list of sector standards.

One break from this approach is the list of activities that make a significant contribution to achieving environmental goals as defined by the EU Sustainable Development Taxonomy. There, unfortunately, we find only activities related to wastewater treatment and water supply. It is probably worth writing a separate article about how difficult it is at the EU level to agree on common definitions and technical qualification criteria for non-climate environmental goals.

Why look more broadly at the water sector?

Expanding the definition of the water sector beyond water supply and sanitation can bring a number of benefits. The first involves expanding the group of entities that share responsibility for water management. This approach does not include a passive expectation that the Water Authority or the local water utility will provide the water resource for the company’s operations. Users are also responsible for the processes, stability and quality of the resources used. This opens up new opportunities for cooperation, such as: in the formula of Public-Private Partnerships (PPP) or initiatives along the lines of Partnerships for Water (e.g. Alliance for Waterstewarship).

In the context of the factor that started my discussion of the water sector, it is worth pointing out that this approach significantly expands the list of water investments. Any modernization that includes improving use efficiency, closing circuits, retaining rainwater, expanding irrigation systems and many, many other activities can be considered an investment in the water sector.

For the financial sector, where I work, this approach significantly expands the scope of financing sustainable water activities, while for entrepreneurs it allows them to show as an asset and a reason to get better financing terms their progress in sustainability not only in climate, but also in other environmental areas.

So I will conclude my thoughts in this 50th anniversary issue of Water Matters with an appeal: Let’s look at the water sector, whether it is defined or not, broadly, as broadly as possible! It will pay off for all of us.