Humanity’s key challenge over the coming decades will be to meet the energy, land, water and material needs of up to 9 billion people, while keeping climate change, biodiversity loss and health threats within acceptable limits. Countries are already facing common but differentiated challenges requiring a range of solutions specific to each situation. A key factor in determining which solution is most appropriate will be the availability of data and information on how much water is available and how it is being used, and the frameworks for assessing the distributional needs of each society. The International Resource Panel (IRP) considers that achieving sustainable patterns of consumption and production equitably while maintaining the integrity of the natural environment requires the decoupling of economic growth from resource use and environmental degradation. The two main objectives of the panel are: • to contribute to a better understanding of how to decouple economic growth from environmental degradation; • to provide independent, coherent and authoritative scientific assessments of policy relevance on the sustainable use of resources and their environmental impacts over the full life cycle. The IRP Working Group on Integrated Sustainable Water Management is examining ways of achieving decoupling through improved water productivity, for example in the harvesting, use and reuse of water, and of defining a measurement framework for achieving efficient, effective and equitable water use. This first working-group report covers the analytical methods and policy frameworks needed to ensure that water use can be properly quantified over the life cycle and integrated into decoupling measures within the green economy. Following this report, and using the conceptual and methodological analysis set out in it, the IRP will publish two further assessments – an overview of the scope of the water management problem around the world and an analysis of the economic and social elements of water productivity and efficiency together with aspects of governance and institutional arrangements. This modular approach aims to provide a comprehensive overview of the policy options available to implement sustainable water management in a green economy in a way that recognises water as vital natural capital while at the same time developing a healthy and productive water sector within an economy that cares for and enables social equity. The conceptual and methodological analysis As water availability is not only highly dependent on the global hydrological cycle but also on local and regional water management regimes, much data and information need to be brought together. Accounting is seen as a crucial tool for the purpose of overall water management and the generation of economic assessments, alongside GDP growth and other economy-wide indicators such as greenhouse gas emissions. There is a need to address ecosystem services within such resource accounting schemes, to enable the links to be made between resource efficiency, biodiversity and ecosystem services and hence the connection to the social values of water. An important trend that emerges is a significant and growing interest from the corporate world in taking water resources into account when considering future business. For public bodies involved in determining water balances, there is a need not only to produce quantitative estimates of stocks and flows but also to assess the impact of fluctuations and uncertainties coming from the global hydrological cycle on water abstraction licenses and access rights and on the quality of water. One of the key features determining the balance between water demands and availability is the emerging view of how best to take the water needed to sustain the many different types of ecosystem services into account. One important conclusion is that there is a common need across all methodologies and approaches for data and information at the river basin scale. A comprehensive examination of the various methodologies for quantifying water use and environmental impacts, their underlying assumptions and the context in which they can be effectively used, forms the core of this report. It considers water registers, water and ecosystem capital accounting, water scarcity and vulnerability indices, water footprint assessment and life-cycle assessment. Conclusions from this, and associated case studies, are that: • water registers provide a key to the fair distribution of access to water; • accounting can provide governments with knowledge of how water, as one part of the natural capital of ecosystems, is linked to the economy and human well-being; • water footprint assessment can provide a tool for awareness raising to highlight water issues in production and consumption, especially in areas such as agriculture and food industries; • life cycle assessment and the various standards associated with it can provide benchmarking for industries; and • water stewardship can help improve quantification in corporate water monitoring. It is also clear that, while there are differences between the various methods, there is a sufficiently robust set of tools and methods currently available to be able to include water in all major economic and social considerations. The report concludes that there is an absolute need to asses water-resource use and management against ecosystem resilience and the limits of sustainability when developing policy options in order to balance the competing needs of water users. It recommends that the environment’s water needs should be treated as a vital priority in order to ensure the steady supply of the basic regulatory ecosystem services that underpin the delivery of social and economically-valuable provisioning services. In essence, water ecosystems must function properly and make clean and sufficient water available to ensure food production – crops, husbandry and fish, drinking water supply, energy and cultural values. Effective and targeted assessments depend on open data access and optimal data availability to function in a transparent and equitable dialogue of relevant stakeholders. The methodologies applied for the assessment of resource use and allocation as well as for the assessment and tracking of pollution loads need to be transparent and comparable between regions up and downstream of the connecting water bodies and scalable between the local and regional or pan-regional scales. Further efforts are needed to provide this comparability and the link between different scales, as shown by the differences between the accounting methodologies, life-cycle and footprint assessments.