What is Water Balance?
Water balance is the quantitative accounting of all water that enters, exits, and is stored within a facility. It is a comprehensive mapping of inflows (such as groundwater withdrawals, municipal supply, and rainwater capture), outflows (like discharge to sewer systems, evaporation, or product incorporation), and internal flows (including storage and recycling). It serves as a dynamic blueprint of how water moves through an operation.
It’s important to note that water balance is not the same as water accounting. Where water accounting typically reports isolated metrics like total withdrawals or consumption per unit of production, a water balance reconstructs the full water system, providing context to those metrics.
This holistic view makes it possible to identify inefficiencies, track performance, and detect losses or leaks that might otherwise go unnoticed.
Illustrative example of Waterplan's Water Balance Mapper
Why Water Balance Matters
For companies operating in water-stressed basins, getting water management right is not a theoretical concern—it's essential to long-term resilience.
A robust water balance enables smarter planning for water reuse, infrastructure investment, operational continuity and regulatory compliance. It helps companies understand how much water is really being used, where, and why.
Without this foundation, risks compound. Undetected leaks can halt production, unmonitored consumption spikes can strain budgets or breach regulations, and misaligned site-level operations can prevent a company from achieving its water efficiency targets. Water is often perceived as inexpensive, but in practice, hidden inefficiencies—such as leaks or overuse in auxiliary systems—can accumulate significant costs over time.
Water balance is also a key mechanism for tracking progress against efficiency targets. Without a clear, quantitative view of how water flows through a facility, efficiency efforts often lack baselines, benchmarks, or the granularity needed to demonstrate results. You cannot improve something that you cannot measure. Water balance fills that gap, offering both visibility and accountability.
These risks are especially acute in regions where water availability is volatile or projected to decline. One CDP report found that companies globally face up to $594 billion in potential financial impacts from water-related risks. As water tariffs rise and regulatory penalties become more stringent, failing to track water use in detail becomes a costly oversight.
“When we analyzed our operations, we found that Jalisco, Mexico presents one of the greatest water challenges for our company globally. This made it clear that we needed to strengthen how we understand and manage water consumption to operate more efficiently and responsibly,” said Daniel Hernández, Brown-Forman Site Manager.
When updated with high-quality, site-specific information, a well-maintained water balance delivers more than operational clarity—it offers strategic advantage. It allows sustainability and operational teams to prioritize investments across multiple facilities, anticipate disruptions, and demonstrate accountability to both internal stakeholders and external regulators.
How Water Balance is Measured Today
In most industrial operations, water balance is the responsibility of site-level engineers or EHS managers. Data is typically collected manually through daily walkarounds, with operators reading analog meters and recording values on paper or spreadsheets. These readings may later be digitized, often in inconsistent formats, delaying insights and leaving room for error.
“We currently operate with 22 water meters and collect data manually every day, a task that takes about three hours. The information is first recorded on paper, then transferred to a spreadsheet that’s not easily accessible for stakeholders. This process slows us down and limits timely decision-making,” said Daniel Hernández during our webinar on Brown-Forman's water balance strategy.
Fragmented data ownership adds to the challenge. Water flow data may be managed by maintenance teams, utility coordinators, or quality control staff, depending on the site. Across different sectors approaches vary widely, both in measurement frequency and level of granularity. For some sectors, like the mining industry, water balances are typically complex due to the need to manage large volumes of process water, tailings, and variable inflows from precipitation and groundwater. Mining operations often rely on site-specific models that incorporate hydrological and geochemical data.
In contrast, other sectors like the beverage industry tend to focus more on the consistency of process inputs and product-related water use. Beverage companies use water balances to support water efficiency, set plant-level benchmarks, and drive reuse or recycling initiatives. These companies often employ frequent metering and real-time monitoring to detect anomalies and improve operational efficiency. Approaches vary widely, both in measurement frequency and level of granularity.
However, common gaps remain even across industries. These include:
Incomplete measurement coverage (e.g., missing meters on key inflows or reuse systems)
Lack of integration between flow data and operational data (e.g., production volumes)
Delayed anomaly detection due to infrequent monitoring
Difficulty identifying root causes of inefficiencies
Time-consuming manual processes
Another common issue is that water balance data, even when collected, remains siloed. The data may be stored in tools or folders that are difficult to access, preventing key stakeholders from using it effectively. Without timely visibility, even accurate data fails to drive decisions.
Even companies with robust data collection practices often struggle to act on the data in real time. Site managers may review water performance monthly, but leaks or abnormal consumption patterns can emerge and escalate within days or hours.
How AI and Technology Are Changing the Game
Artificial intelligence and smart technologies are transforming water balance from a static, retrospective analysis into a dynamic, decision-driving tool. At any single site, an AI-powered water balance system can dramatically improve visibility and responsiveness. It enables facility teams to digitize meter readings, fill gaps in flow data, and automatically flag anomalies in near real time.
For example, photo-based meter reading allows operators to upload images of analog meters. AI then extracts the readings, reducing transcription errors and speeding up reporting cycles. Anomaly detection algorithms compare incoming data against historical baselines, highlighting deviations that may indicate leaks, spikes in usage, or malfunctioning equipment. By embedding time-stamped photo records into the water balance process, teams strengthen their audit trails and regulatory compliance. This type of traceability ensures that water data can be verified, traced back to its source, and defended in both internal reviews and external audits.
"With these tools, we invest less time, avoid errors, and—most importantly—create information that’s available and actionable for stakeholders. That empowers decision-making." – Daniel Hernández
These capabilities help site-level teams resolve issues faster, minimize water losses, and maintain alignment with local efficiency goals—without having to install costly infrastructure like SCADA systems.
When scaled across multiple locations, AI further enhances impact. Centralized dashboards unify water balance data from all sites, enabling sustainability managers to benchmark performance, prioritize investments, and monitor progress toward corporate targets. The result is a unified and dynamic picture of enterprise water use that supports both local decision-making and global strategy.
Importantly, AI is not a replacement for domain expertise. It augments human decision-making, helping teams interpret complex patterns and prioritize interventions. When embedded into existing workflows, these technologies enhance responsiveness while preserving the contextual knowledge and experience of facility staff.
The Strategic Payoff
Water balance becomes especially powerful when viewed as a foundational layer for broader sustainability initiatives. It informs site-level water reuse strategies, guides capital investments, and supports environmental reporting.
Companies that regularly update their water balance are better equipped to:
Monitor and respond to changes in water availability
Allocate resources to high-impact efficiency projects
Identify opportunities for reuse or recycling
Set realistic, context-specific water targets
Demonstrate compliance with disclosure frameworks like CDP, CSRD, and ICMM
In addition to these operational benefits, water balance efforts can help build awareness across teams. When site staff see how their daily practices affect water metrics, it can foster a culture of shared ownership. Over time, this alignment between sustainability goals and operational behavior leads to deeper, more durable impact.
A phased rollout approach—starting with the highest-impact meters or most manual tasks—can accelerate adoption while reducing disruption. Engaging operators early in the process also increases the chances of long-term use and ownership of the new system.
"We’re now working not just internally, but also outside the fence on community projects to replenish the water we use. Such a detailed water balance helped us identify both internal efficiencies and external stewardship opportunities." – Daniel Hernández
As disclosure standards tighten globally, AI-enabled water balance systems ensure the ability to quantify and explain site-level water use, which improves data quality and helps teams streamline reporting and prepare for audits.
Looking Forward
The future of corporate water stewardship is not about one-off savings, but about consistent, optimized water use across global operations. A real-time, AI-powered water balance is key to this vision.
Companies that invest in digitized water balance tools are laying the groundwork for:
Predictive water management based on operational and climate trends
Resilience planning in water-scarce regions
Automated alerts for emerging risks
Continuous improvement in line with corporate targets
At its core, water balance is not just about measurement—it's about impact. When companies connect their operational data to actionable insights, they move beyond compliance and into strategic water management. With the help of AI, that impact can be faster, smarter, and more scalable than ever before.
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