Water scarcity is a harsh reality for many regions. As a result, reducing losses from water supply systems (WSSs) is of great environmental importance around the world. In France, water suppliers are legally bound to reduce losses from their WSSs through loss reduction action plans (LRAPs). For these plans to work, they need to suit the area to which they are applied. Their impacts on water bodies (WBs) and the environment also need to be taken into account. This paper explains an innovative approach to fulfil these objectives. It involves adding two elements to the design of LRAPs: calculation of a water abstraction and discharge balance (WADB) and analysis of environmental effects (AEE) relating to loss reduction actions, based on life cycle assessment. The usefulness and the practicality of this approach are examined through two practical case studies. It is shown that the WADB allows LRAPs to be configured to optimise water savings in the most sensitive WBs. AEE makes it possible to identify a loss reduction level above which the overall environmental balance becomes negative. While the LRAP design and the WADB calculation methods are ready to be used by WSS managers, the AEE still requires further improvement.