The future of water: Why we need a cross-sector approach to innovation

Water is more than just a resource to be consumed; it is a living system that connects communities, industries, and ecosystems. Achieving net zero and strengthening climate resilience in the water sector will therefore depend on our ability to understand and manage the complex interdependencies between water, energy, land use, and infrastructure. By embracing and strengthening these connections, we can protect our national infrastructure, build resilient communities, and ensure a just transition for all.

Embracing systems-thinking to drive water innovation

The challenges we face – climate change, pollution and the growing demand on water resources – are not isolated incidents but rather system-wide issues which call for system-level solutions, requiring us to look beyond traditional sector boundaries. The landmark Independent Water Commission report, the most comprehensive review of the water sector for England and Wales to date, underscores this, highlighting how cross-sector collaboration is not just beneficial, but essential in fostering innovation and accelerating progress needed to drive change within the water sector. Importantly, the report advocates for a shift from the siloed and fragmented practices that have traditionally characterised the sector, toward a more integrated, cross-sectoral and long-term approach to improve the resilience and sustainability of our water systems.

By bringing together expertise from across sectors, we can identify shared challenges, develop integrated solutions and drive the adoption of interventions that are most effective for ensuring long-term sustainability. The recommendations to establish a longer-term, systems-focused National Water Strategy for England and Wales, as well as the adoption of a system planning framework, exemplify the holistic and integrated approaches we need to support effective water system planning at both local and regional levels.

Across sectors a growing number of initiatives are already demonstrating the power of systems thinking in action, and the tangible benefits it can deliver. Initiatives such as the Crane Valley Partnership and the Water Breakthrough Challenge projects Support for All and Climate Resilience Demonstrator (CReDO) exemplify the positive outcomes that multi-stakeholder and local, cross-sector action on water can achieve. By fostering collaboration across various sectors and engaging local stakeholders, these projects highlight how integrated efforts can successfully support environmental sustainability, and local communities.

Understanding the challenges facing the water environment

These examples demonstrate what’s possible when cross-sectoral collaboration, and systems-thinking are at the forefront of our approach to water. However, given the scale and urgency of the challenges facing the water environment, these efforts must become the norm, rather than the exception.

The UK’s water environment is under increasing strain and the urgency for action has never been more apparent. The Environment Agency has warned that without decisive steps to safeguard our water resources, England could face a shortfall of 5 billion litres a day by 2055. This issue is more than just a matter of supply and demand, it reveals a deeper, systemic imbalance affecting the entire water cycle and the many sectors it sustains, spanning mining and chemicals to manufacturing, construction, farming, transport and pharmaceuticals.

Climate change is already disrupting rainfall patterns, causing more frequent and intense heatwaves and droughts, particularly in the summer months. When rain does occur, it often leads to surface water flooding, placing further strain on our infrastructure and communities. The Climate Change Committee’s 2025 Progress Report echoes these concerns, highlighting that the water sector is increasingly exposed to drought, flooding and supply chain pressures, while climate adaptation efforts remain fragmented. These risks are no longer abstract – they are very real and growing, and our collective progress on water resilience cannot keep pace without coordinated action.

At the same time, emerging sectors such as data centres to support increasing use of AI and hydrogen production are increasing water demand, while pollution and declining water quality continue to threaten both natural ecosystems and communities. These challenges are interconnected and do not occur in isolation. The water environment underpins not only human health and food security, but also economic growth and the resilience of our national infrastructure. Issues such as nutrient runoff, new contaminants, water management, and the need for better data and monitoring all cut across agriculture, industry, and urban planning. Rising costs for UK industry and the effects of climate change on the energy sector further highlight just how interconnected our water challenges have become.

Our approach

As new industries continue to shape the demand for water, and climate change intensifies existing pressures, the need for collaborative, cross-sector action has never been greater. Only through partnership and shared innovation can we secure a future where both our water resources and the communities they support can thrive.

Taking a broader view of assets and opportunities for innovation allows us to identify areas where cross-sector working on water can deliver mutual benefits. Approaches such as nature-based solutions, integrated catchment management, and circular reuse and recovery models help to strengthen resilience across multiple sectors, delivering both environmental and social co-benefits. These approaches not only help safeguard the natural environment, but also open up significant opportunities for business growth within the water sector, opening up new markets, encouraging the development of innovative services and enhancing business competitiveness.

That’s why we have launched our Cross-Sector Water Innovation Network. Funded by Ofwat and delivered by Innovate UK as part of the £40 million Water Innovation Cross-Sector Challenge, the network will bring together innovators, businesses and end-users from across sectors into a new community platform. Our goal is to break down traditional silos and foster a water-conscious community that works together to tackle water challenges through the power of innovation. By sharing solutions, best practices, success stories, and delivering knowledge exchange activities, our aim is to build connections and support cross-sector collaboration, empowering the network to drive positive change for our shared water environment. Members will also have the opportunity to contribute their insights and experiences to help shape future funding competitions under the Water Innovation Cross-Sector Challenge, delivering maximum impact.

Be part of the solution

Greater partnership between the water sector and other industries will be key to driving faster, more effective progress in meeting the UK’s Net Zero ambitions. Working together to identify opportunities for mutual benefit will not only strengthen the protection and management of our water environment, but also deliver wider economic and social co-benefits, including job creation, green growth, habitat restoration and greater resilience for communities most at risk from the impacts of climate change.

If you are interested in addressing your own water-related challenges, would like to share the solutions you are working on, or find out how you can get more involved in a thriving community working to improve our shared water environment, we invite you to join our Cross-Sector Water Innovation Network and register for our upcoming webinar series. By participating, you will have the opportunity to connect with others who are passionate about solving water challenges, exchange insights and good practice, and stay up to date on future funding opportunities related to the Water Cross-Sector Challenge.

Together, let’s work to build a more resilient and sustainable future for our shared water environment.