Energy efficiency is about more than just the energy bill. All companies, and households, face a range of hidden energy costs, from material wear-and-tear to transport. One of the most hidden of all is water.

People in the developed world often take water for granted, viewing it as an essentially free resource. Water bills make up only a small part of most companies’ cost base, but businesses are becoming increasingly aware that water shortages can have a serious knock-on effect. Droughts and floods will occur more frequently because of climate change. Floods and storms can cut off water supply by overwhelming or contaminating drinking water, and damage water infrastructure such as pipes and sewage works. Independently of climate change, a combination of the pressure of population and dwindling resources also means more regions will suffer water scarcity.

The production of clean and potable water also gives rise to greenhouse gas emissions, in pumping, in treatment works and in the maintenance of the vast networks required. The energy used to pump, treat and heat the water in the average family’s home produces the carbon equivalent of a return flight from London to New York, according to Waterwise, a UK organisation devoted to improving water efficiency.

Using water more efficiently serves three purposes: reducing water bills, combating water shortages and cutting greenhouse gases.

Most companies are unaware that their water bills can easily be cut, says Tony Wray, chief executive of Severn Trent, a UK water utility. “They don’t see that water is a controllable cost – they think it is fixed,” he says. “This is wrong, and our job is to educate water consumers so that they can reduce their wastage.”

Water providers might be thought to have a vested interest in encouraging their customers to use as much water as possible. But Mr Wray says this overlooks the difficulties utilities often face in sourcing high-quality water and treating sewage. He says making customers more efficient makes business sense.

The first step in any water efficiency programme is to search out leaks. Companies can carry on for years, unaware of enormous leaks on their property, says Mr Wray. Finding them is a matter of metering the incoming supply and accounting for where it is used.

Good maintenance is another must: dripping taps can leak away hundreds of litres of water in a day – even a small drip from a single tap costs £900 ($1,317) a year, according to some estimates.

Some water practices are inherently wasteful – urinals that flush automatically several times an hour, for instance. They can be replaced with sensors that flush only when necessary, with substantial cost savings. Installing passive infra-red sensors costs about £350, but pays for itself within about five weeks, adding up to a saving of about £3,800 per year, says Envirowise, a UK government-funded body charged with improving the environmental performance of businesses.

Taps can be fitted with sensors and sprays, which use 60 to 70 per cent less water than ordinary taps. Cheap water butts and cisterns can save rainwater, which can be used to water office plants or gardens.

The average employee in the UK uses 25 litres per person per day, rising to 40 litres per person per day if the workplace has a canteen, so the scope for savings is large.

With a combination of efficiency methods, companies can easily cut their water usage by about a third, according to Envirowise. If businesses are on water meters, this translates directly into savings on water bills. In the UK, water costs between 60p and £1.60 per cubic metre.

Companies that are big users of water are among the leaders in increasing their water efficiency. The cosmetics company L’Oreal, for instance, has undertaken a wide-ranging efficiency programme in recent years, including new cleaning technologies such as the use of low-pressure steam for sanitation instead of hot water, and using high-efficiency spray balls for cleaning vessels and “pigs” that are pushed down lines to clean them.

L’Oreal also recycles its machine-cooling water and reuses the waste water generated by the process of demineralising its water. The company says it has eliminated all of its open-circuit cooling towers around the world.

Marks and Spencer, the UK retailer, recycles water from many of its processes, such as preparing vegetables, and has worked with WWF, the charity, to carry out a survey of its “water footprint”. The company has cut water use in its outlets by 2 per cent.

Companies can also help to prevent flooding by keeping or installing grass verges rather than paving them over, says Mr Wray. The increase in paving is believed to have contributed to large increases in the amount of surface water in the UK, which can overwhelm sewers when heavy rainfall occurs.