This work introduces a new approach to integrating the discharges of industrial processes with macroscopic watershed systems. The key concept is that environmental quality models (such as material flow analysis) can be inverted and included in an optimization formulation that seeks to determine the maximum allowable target for the process discharges while meeting the overall environmental requirements of the watershed. Because of its holistic nature, this approach simultaneously considers the effects of the inputs and outputs to the watershed (e.g., agricultural, residential, wastewater treatment plants, industrial, and so on) and the various physical, chemical, and biological phenomena occurring within the watershed. An optimization formulation is developed to systematically represent the reverse problem formulation. To illustrate the effectiveness of this approach, a case study is solved to manage phosphorus in Bahr El‐Baqar drainage system leading to Lake Manzala in Egypt. The key environmental and economic aspects are addressed and used to screen plant location and discharges.