On the occasion of this week’s WEFTEC 2025 conference in Chicago, our own Keith Larson had a chance to sit down and connect with Sophie Borgne, water and environment segment president, Schneider Electric. Their conversation centered on the company’s recent survey of city and business leaders that revealed an alarming gap between needed modernization of America’s water infrastructure and the lack of organizational commitment to address it. Read on for more of what was said.
Q: U.S. leaders recognize the urgent need for smarter water management and infrastructure modernization, yet there’s a significant gap between strategy and execution. Why is this gap concerning?
A: We have actually just released a survey of the U.S. water markets that shows two thirds of the leaders we interviewed rank water risk as the highest risk to their operations. And that's among both municipalities and industry business leaders, which is good. On the other hand, the next question was: What are you going to do about it? And more specifically, do you have a line in your 2026 budget addressing water risk? The answer is that only one out of 10 have it in their budget plan for 2026. So, this gap between recognizing its strategic importance and taking steps to address it is pretty big, and it is concerning because the availability of water is a big concern overall.
An interesting datapoint from the World Economic Forum is that by 2030—which is not so far away— water demand is going to exceed water supply by 40%. So, that's huge. That's specifically fresh water, but that's the kind we need for agriculture, for industries and for citizens overall. We need to act quite urgently to begin closing this gap. And if we don't take a first step, or if only 10% take a first step in 2026, the window of opportunity to act gets that much shorter.
Q: Water is critical to the manufacturing industry and demand is growing as these operations grow. What industries are expanding and increasing their water usage?
A: It's not so much about industry increasing water use. Rather, it's about industry investing in additional capacity to meet society’s demands. And in the U.S., in particular, there are a lot of programs and incentives for reshoring and developing U.S. manufacturing. This is good, but it translates into investments in semiconductor factories, in data centers, in many things needed to make the economy successful. But those industries are all water intensive as well. You need water to clean semiconductor chips; you need water to cool data centers; you need water to mine rare earth elements; you need water to drill for oil. You need water for pretty much every industry. So, the increase in water consumption is not the use of water per amount of goods produced, but in line with overall economic growth.
There's also not a lot of process and regulations around where companies tap into the water supply, although that is starting to change. There are more and more examples of permits being denied because of the potential impact on water availability for a given community. This is starting to put more pressure on those industries to demonstrate how they are going to manage water in a sustainable manner: the license to operate is quite literally linked to water.
Q: We often associate Smart Water technology with municipal water treatment plants and pumping systems. Why is Smart Water becoming more important for manufacturers and others?
A: The reason industry hasn’t invested as massively in water efficiency as it has in energy efficiency or other kinds of improvement programs is because the marginal cost of water itself is nowhere as significant as the cost of energy or other raw materials. At least for now, if you look at it from a pure P&L perspective, it’s not the investment on which you'll get the highest return on investment. But as of late, water has become a key topic in terms of risk management and resilience.
What I find super interesting is that when you apply smart technology to water you don't save water only. There are associated savings such as in energy from less pumping. When you use less water, you often use less energy as well. It compounds the savings.
Industries are also investing in water treatment capabilities to clean the water or bring the water to a certain level of quality before discharging it. In the process, they are recovering precious metals for example, and everything they are recovering that once qualified as waste or contaminants is now seen as a potentially valuable byproduct. A growing number of industrial companies are now doing this “urban mining” themselves or partnering with other companies to do so.
Q: In your survey, city leaders ranked water management as only a medium priority and business leaders didn’t see it as priority at all—placing three times more importance on cost reduction. What is at risk for business leaders that don’t have or have not implemented a Smart Water plan?
A: The very real risk they face is no water, no business. The risk is amplified by potential extreme weather events that are happening more and more often. And that risk takes the shape of having to stop current operations as well as not being authorized to set up new ones.
Q: Budget constraints, operational pressures, and lack of real-time data as cited as key barriers to Smart Water strategy implementation. What advice do you have for those trying to balance these priorities?
A: Our advice is to digitalize, automate and optimize. Digitalize means more than just collecting data. There is plenty of data in your system, but it's heterogeneous, it's disjointed, it's not collected. So, first implement a layer to contextualize that data: stop driving blind, get visibility, know where you are. Then, once you have visibility, automate all the real-time actions that you can now see deliver quick wins. Finally, optimize operations by leveraging AI, machine learning and other digital tools.
Q: How can companies that don’t have a Smart Water strategy get started in putting one together?
A: I would highly recommend that they look for a good partner to get started. What I find unique to the water industry is that utilities don't really compete with one another and there is a lot of openness to share practices and experience. Don't go on this voyage alone. Look around for partners. Leverage the collective intelligence that has accumulated in the water sector. Keep in mind that identifying the problem you want to solve is paramount. Digital technology can do a lot, but it can’t do everything, and you risk getting lost in your digital transformation project. So, first find your true North Star, the most pressing issue you want to address, and I promise technology can help.