*3.1. Data Description*

Our aim is to use the concept of sustainability proposed by [20] to evaluate the performance of Portuguese water companies. In Portugal, we find two kinds of water companies: on the one hand, there are companies that provide services in all activities involved in the urban water cycle and, on the other hand, there are companies that focus on the distribution of drinking water and collection of wastewater. In any case, a national authority (ERSAR: Entidade Reguladora dos Serviços the Águas e Resíduos (www.ersar.pt)) regulates all companies. ERSAR states di fferent regulatory functions over all the operators related to waste and water management. The statutes of ERSAR impose significant regulatory functions among the operators in charge of waste and water managemen<sup>t</sup> in Portugal. Their concern is to respect customer rights and safeguard sustainability, as well as to provide economic visibility of the systems. In particular, this national authority applies the sunshine regulation model [39], which consists of sharing the information derived from a set of specific performance indicators that is provided by the operators. There are several factors that di fferentiate the Portuguese water companies, such as the managemen<sup>t</sup> model or the regional location, among others. Portugal o ffers di fferent managemen<sup>t</sup> models for their water companies [19]: direct managemen<sup>t</sup> (municipalities, municipalized services, and associations of municipalities); delegation (municipal-owned company or company established in partnership with the State (municipal or State-owned company), parishes, or user associations), and concession (municipal concessionaire or public–private partnership—municipality or municipalities and other private operators). In general, most of the municipalities receive the service directly from the municipal departments or municipal services with autonomy. This regulatory model has some strengths (the quality of service, the technical regulation and the access to information) but it also has some weaknesses (poor governance and failure to address identified problems). The evolution of the Portuguese water industry has been widely studied. However, some internal problems remain (water losses, poor staff productivity, ... ), in addition to the fact that the sector is excessively politicized. A more detailed description about this model of regulation and its characteristics can be found in [19].

To show the potential of the methodology proposed in the previous section, we consider an initial set of indicators applied to a set of Portuguese water companies. In the selection of these sustainability metrics, we take into account the availability of statistical data [37], as well as their relevance. The selection of these indicators is analogous to [12], whose data were obtained from the ERSAR list of Portuguese water companies in 2012. Nevertheless, on this occasion, data is updated to 2015 and, besides, the present work really makes use of the classification into three dimensions established in [12], in order to carry out the first phase of our approach. Then, 14 initial indicators are set, divided into three dimensions: social (5), environmental (5), and economic (4). In general, IS denote social indicators, whereas IEN are those related with environmental issues and IEC for the economic indicators.

Table 1 summarizes the main features of each initial PI, as well as the direction of improvement (negative or positive PIs), unit, average and standard deviation (for more details see Appendix A: Table A1). In particular, IS4, IS5, IEN4, and IEN5 are binary indicators, so they ge<sup>t</sup> a value of 1 if the water company has the certification, or 0 otherwise.


**Table 1.** Direction of improvement and statistical information from the initial set of PIs.

Regarding water companies, Table 2 provides information related to the localization of them. In this sense, following the classification from Eurostat, the NUTS classification (Nomenclature of Territorial Units for Statistics) is a hierarchical system for dividing up the economic territory of the European Union. In particular, NUTS II are basic regions for the application of regional policies. Then, Portugal (continental) is divided into five regions or NUTS II (North, Centre, Metropolitan Area of Lisbon (MA Lisbon), Alentejo, and Algarve). Most of the water companies are located in the North (48) and Centre (58) regions, a large group is equally located in the Alentejo (30) region, and just a few of them are located in Algarve (12) and MA Lisbon (15) regions.

**Table 2.** Localization of the water companies and characteristics of the regions.


Additionally, general information (obtained from Eurostat) about these NUTS II are shown in Table 2, in order to clarify the main characteristics of the regions in which the water companies are located. Thus, Centre and Alentejo regions are the largest areas, while MA Lisbon region is the smallest. Nevertheless, the last one presents the highest population per km<sup>2</sup> (1007.09 population). Finally, MA Lisbon region gets the highest GDP per capita (24,700 €), representing 36.00% of the total Portugal GDP; while the Centre region gets the lowest GDP per capita (16,000 €), representing the 29.40% of the total Portugal GDP.
