ESRS E3 Water Reporting: Disclosure Requirements, Metrics and Water Stress

ESRS E3 is the ESRS water standard, the disclosure a company makes under the Corporate Sustainability Reporting Directive (CSRD) when water is material. The final version, published in the Official Journal on 21 September 2026 (Delegated Regulation (EU) 2026/1563), is narrower than the 2023 version (Delegated Regulation (EU) 2023/2772): it is now called simply "ESRS E3 Water", marine resources moved to a different standard, and four of the five disclosure requirements remain.

Most explainers still describe the 2023 version, or cover CSRD water reporting only in passing. This one works through what the final text requires: the four disclosure requirements, the six water metrics, the test for areas at water stress, and where E3 sits against the VSME, GRI 303 and CDP.

What ESRS E3 covers and what changed in the 2026 final text

The 2023 version used the wider title "Water and marine resources" and carried a fifth disclosure requirement on anticipated financial effects. The final version narrows the topic:

The marine-resources half of the 2023 version now sits in ESRS E5 Resource Use and Circular Economy, which covers resource inflows “including marine resources”, while impacts on marine ecosystems belong in ESRS E4 (ESRS E3, paragraph 9; ESRS E5, paragraph 7). My read: anyone searching for "ESRS E3 water and marine resources" is usually looking for the 2023 definition. Under the revised standards, water and marine resources sit in two different standards, and only the water half is E3.

The regulation enters into force on 10 November 2026 and applies to financial years from 1 January 2027, with the option to apply it to 2026. A company reports on E3 only if water is material under its double materiality assessment (paragraph 2).

The four disclosure requirements

Three of the four follow the general pattern of ESRS 2: policies, actions, targets. What makes them water-specific is that areas at water stress are reported separately.

The data from E3-1 and E3-4 feed three of the optional additional indicators for principal adverse impacts under the Sustainable Finance Disclosure Regulation (Delegated Regulation (EU) 2022/1288, Annex I, Table 2): investee companies without water management policies, exposure to areas of high water stress, and the share of water recycled and reused. That is why banks and investors ask for exactly these figures, even from companies outside ESRS scope.

The six water metrics under E3-4

Paragraph 16 requires six figures, all in cubic metres or multiples of them (AR 5):

Consumption does not have to be metered. AR 4 allows it to be modelled, estimated or calculated as consumption equals withdrawal minus discharge. A worked example with assumed figures: a plant that withdraws 12,000 m³ a year and discharges 10,500 m³ consumes 1,500 m³. For most companies both figures are on the water and wastewater bills, and the real work is allocating them to sites.

Water covers more than mains supply: surface water, groundwater, seawater, brackish water, produced water and third-party water all count (paragraph 7). An own well belongs in the figures.

Identifying areas at water stress

Whether a site sits in an area at water stress runs through all four requirements. AR 2 names four global indicators with thresholds:

• Baseline water stress: "high" or above, meaning 40 to 80 percent.
• Seasonal water depletion: above "high", 25 to 75 percent.
• Baseline water depletion: "high" or above, 50 to 75 percent.
• Water Exploitation Index plus (WEI+): 40 percent or above.

The first three indicators and their classes are those of the World Resources Institute's Aqueduct atlas, while WEI+ comes from the European Environment Agency. In practice, you enter your site coordinates in Aqueduct, read the baseline water stress of the river basin and flag every site rated "high" or above. Location decides more than volume. Looked up on 19 October 2026, a supplier in Jaipur or Jodhpur in Rajasthan sits in a sub-basin Aqueduct rates "extremely high" (above 80 percent), while a plant in Essen, Dortmund or Duisburg sits in one rated "low" (below 10 percent), even though some neighbouring sub-basins in the Ruhr area come out "high". Two sites with similar withdrawal can land on opposite sides of the line, so check each one by its coordinates, not by country or region.

The harder line to draw is usually the company boundary, not the threshold: a site you own counts in full, a leased site usually counts too, but water drawn by a contract manufacturer or an upstream supplier usually does not, even though that is often where the exposure sits. Draw the boundary the same way for E3 and for the climate risk assessment, or the two will disagree about which sites matter.

My view: the water-stress test shows how much water a site uses against a stressed baseline, not whether that water will be there when needed. A materiality assessment that stops there often concludes "not material" for water-rich regions and misses the low river level, the summer cooling restriction or the supplier in a drought region, all of which belong in the E1 analysis. Screening water once, sites and key suppliers, with Aqueduct and your own outage data, answers both questions at once. For a broader view, see the guide to water risk assessment for companies. If you want to work through this for your sites, get in touch.

Where E3 sits: other ESRS, VSME B6, GRI 303 and CDP

E3 covers only water use: withdrawal, consumption, discharge and storage (paragraphs 6 and 9). Physical risks such as drought or flooding belong in ESRS E1, emissions to water in ESRS E2, ecosystem effects in ESRS E4, marine resources in ESRS E5, and communities' access to water in ESRS S3. The most common gap: a company reports withdrawal correctly under E3 while the real business risk, a production stop during low river levels, appears nowhere because it belongs in E1 (see water scarcity as a climate risk).

My practical read: if you already answer CDP or report under GRI 303, treat E3 as a relabelling exercise; the only genuinely new figures are stored and recycled water. The VSME standard only requires total withdrawal under Basic Module B6, with consumption and water-stress figures added for water-intensive production.

ESRS E3 FAQ