Anglian Water has been told it must reduce the impact its operations are having on the natural environment in a report by the Environment Agency.
A national research paper which has been conducted alongside the Department for Environment, Food and Rural Affairs found that only one of the major water and sewage companies in England is performing at the level expected.
Anglian Water has been ranked at a level three for the second year in a row meaning that the company needs to improve the effect it has on the environment.
A spokesman from Anglian Water said: "We're fully committed to protecting the environment and have been making good progress towards achieving our zero pollutions goal. Our pollution incidents have fallen on 2017 levels.
"By investing in the latest technology and state of the art monitoring, we know more about when, where and why pollutions occur, allowing us to focus our investment where it will have the biggest impact.
"We remain committed to delivering innovative solutions that deliver additional environmental benefit.
"But we know there's no room for complacency, and we're absolutely determined to improve further and achieve a four star rating."
Northumbrian Water was the only company achieving the highest four star rating, which means the company is using good environmental practices, limiting the impact that their operations have on nature.
Manfai Tang, operations manager at the Environment Agency, said: "Anglian Water faces a number of significant challenges in a high-growth, water-stressed region. And although we are seeing a constructive approach in how they're dealing with these challenges, we want to see their performance improve to reduce the company's impact on the environment. The number of pollution incidents is falling, but their self-reporting and compliance with discharge and waste permits must improve.
"We want to see rivers teeming with vitality, land and soil that is healthy and productive, and seas that are clean and safe for people and wildlife - and good environmental performance from water companies is key. We will continue working with Anglian Water to ensure they're doing everything they can to protect people and nature."
Environment Agency Chair Emma Howard Boyd said: "Companies should be reflecting on their environmental performance and long-term resilience, if this is poor they should be asking themselves whether dividends are justifiable."
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