🧾 ESRS E3 – Water and Marine Resources: Key Reporting Obligations

The European Sustainability Reporting Standard ESRS E3 – Water and marine resources defines how undertakings must identify, manage, and disclose impacts, risks, and opportunities related to freshwater and marine environments.

For companies in scope of the Corporate Sustainability Reporting Directive, ESRS E3 transforms water and marine resources from a purely operational issue into a structured reporting requirement that links environmental performance with strategy and financial outcomes.

⚙️ Scope and Materiality of ESRS E3

ESRS E3 applies wherever a company’s operations or value chain significantly affect water quantity, water quality, or marine ecosystems, or depend on them.

Undertakings must describe the processes used to identify and assess material water‑ and marine‑related impacts, risks, and opportunities (IROs), including:

• How sites, assets, and activities are screened for water and marine issues.
• Methodologies, assumptions, and tools applied, possibly following a LEAP‑type approach (Locate, Evaluate, Assess, Prepare).
• Whether and how affected communities and other stakeholders are consulted.

This materiality assessment underpins all subsequent disclosures on policies, actions, metrics, and anticipated financial effects.

📜 Governance, Policies, and Actions

🧭 Policies related to water and marine resources (E3‑1)

Undertakings must summarise the content, scope, and communication of policies that address water and marine resources, especially for sites in areas of high water stress.

Where such policies do not yet exist, the company should explain why and indicate when it plans to adopt them.

Policies should clarify how the organisation:

• Manages abstraction and sourcing of water and marine resources, wastewater treatment, and pollution prevention.
• Integrates water and marine considerations into product and service design and into the preservation of marine resources.
• Commits to reducing material water consumption at water‑stressed locations and throughout the value chain.

Additional policy information may include measures to:

• Maintain good ecological and chemical status of surface and groundwater bodies.
• Limit adverse impacts on local communities and priority ecosystem services.
• Support sustainable oceans and seas, protect aquatic ecosystems, and improve the environmental status of marine waters.

⚙️ Actions and resources (E3‑2)

Companies must outline key actions taken and planned, their expected outcomes, and how they support policy objectives and targets.

This includes remedial actions for stakeholders harmed by material impacts, preconditions for implementation, and the current and future financial resources allocated.

ESRS E3 introduces a mitigation hierarchy for water stewardship:

• Avoid the use of water and marine resources (highest priority).
• Reduce the use of water and marine resources.
• Reclaim and reuse water.
• Restore and regenerate ecosystems (lowest priority).

Actions in areas at water risk, including regions with high water stress, require particular attention.

Undertakings are encouraged to report on collective initiatives with other parties and may draw on guidance from recognised water stewardship frameworks.

🎯 Targets for Water and Marine Resources (E3‑3)

ESRS E3 requires disclosure of targets and performance in line with the cross‑cutting ESRS on targets.

Companies must clarify whether targets are legally mandated or voluntary and how they relate to any ecological thresholds used in setting ambition levels.

Targets should address:

• Management of material IROs in water‑risk areas, including improving water quality.
• Responsible management of marine resources and marine‑related commodities.
• Reductions in water consumption, particularly in high‑stress basins.
• Lower withdrawals from, and discharges to, water bodies, including groundwater and remediation‑related abstractions.

Where ecological thresholds are used, undertakings may refer to science‑based methodologies for nature or other recognised approaches.

Targets can apply to own operations only or extend across the value chain. Progress against these targets and any significant deviations must be explained.

💧 Water Consumption Metrics and Context (E3‑4)

Water consumption is the central quantitative disclosure in ESRS E3 – Water and marine resources. For own operations, companies must report at least:

• Total water consumption.
• Consumption in areas at water risk and high water stress, identified using frameworks such as the EU Water Framework Directive and recognised water‑risk atlases.
• Recycled and reused water volumes.
• Stored water and changes in storage.
• Water intensity, usually expressed as cubic metres consumed per million euro of net revenue.

Undertakings are encouraged to provide additional intensity ratios, plus information on water withdrawals and discharges, broken down by sector or business segment where relevant.

To make these figures meaningful, ESRS E3 requires contextual information, including:

• The quality and quantity status of the water basins concerned.
• Standards, methodologies, and assumptions used to compile data.
• Whether values are based on direct measurements, modelling, estimates, or a mix.
• The proportion of data derived from measurement, sampling and extrapolation, or best estimates, and any sector‑specific factors considered.

💶 Anticipated Financial Effects from Water‑Related IROs (E3‑5)

Beyond environmental metrics, ESRS E3 – Water and marine resources links water stewardship to financial materiality.

Undertakings must estimate, where feasible, the monetary effects of water‑related risks and opportunities before mitigation actions are taken.

The scope covers items that could materially influence the company’s:

• Financial position,
• Financial performance, or
• Cash flows

over the short, medium, and long term. Quantification can be a single figure or a range.

Disclosures must include:

• A description of the types of impacts and dependencies considered and when they are expected to materialise.
• The critical assumptions, data sources, and levels of uncertainty used in the estimation.
• Qualitative explanations where robust quantification is not possible without disproportionate effort.

In addition, companies should assess products and services exposed to water‑related risks and explain how financial amounts are derived and which methodological choices are most influential.

🤝 Implementing ESRS E3 in Corporate Reporting

Complying with ESRS E3 requires coordinated efforts across sustainability, operations, risk, and finance teams.

Key practical steps include:

• Establishing a robust materiality and water‑risk screening process for all sites and key value‑chain partners.
• Aligning policies, actions, and targets with recognised water stewardship hierarchies and local basin conditions.
• Building reliable data systems for water balances, intensity metrics, and basin‑level context.
• Integrating financial analysis of water‑related IROs into enterprise risk management and planning.

With structured implementation, undertakings can demonstrate responsible water and marine resources management, satisfy ESRS E3 reporting obligations, and strengthen their overall ESG profile – supported by ComplyMarket.