[CSRD] E3-4: Water metrics

CSRD Simplified: Disclosure Requirement E3-4: Water metrics

1. Introduction

We have established the rules (E3-1), detailed the operational work and investments (E3-2), and set the specific goals (E3-3). Now, we arrive at the scorecard: ESRS E3-4.

This disclosure requires undertakings to report the hard quantitative data regarding their water performance. It moves the conversation from strategic ambitions to absolute volumes, allowing stakeholders to see exactly how much water you use, where you get it from, and where it goes.

I will briefly explain the requirements for disclosing water metrics.

More elaborate articles are, or will become available, which can be found on: Sustainability Simplified.

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2. What are water metrics?

Water metrics are the standardized, quantitative measurements of how water flows through an organization’s operations.

To report correctly, you must understand the fundamental difference between these key hydrological terms:

• Withdrawal (W): The total amount of water you take in from any source (e.g., surface water, groundwater, municipal water supply).

• Discharge (D): The total amount of water you put back out into the environment or to a third party (e.g., sending wastewater to a treatment plant or river).

• Consumption (C): The water that is permanently removed from the local water cycle by your operations. It is what you take in minus what you return (e.g., water that evaporates in cooling towers or is incorporated into your final product).

The ESRSes define metrics as follows:

“Qualitative and quantitative indicators that the undertaking uses to measure and report on the effectiveness of the delivery of its sustainability-related policies and against its targets over time. Metrics also support the measurement of the undertaking’s results in respect of affected people, the environment and the undertaking.”

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3. ESRS E3-4 at a glance

ESRS E3-4 requires that the undertaking disclose its water performance metrics specifically for its own operations in accordance with the provisions of
ESRS 2 GDR-M“.

To comply with the standard, you must disclose the following:

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4. How E3-4 links to the rest of ESRS E3

E3-4 is the ultimate proof of performance for your water strategy:

• E3-1 (Policy): Establishes the commitment to reduce your impact on vulnerable water basins.

• E3-2 (Action): Describes the installation of a new €1M water recycling system.

• E3-3 (Target): Sets the goal to reduce freshwater consumption by 30% by 2030.

• E3-4 (Metric): The reality check. Reports that you consumed 100,000 m³ of water this year (a 5% reduction), with 20,000 m³ of that coming from areas with water stress, and 15,000 m³ successfully recycled.

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5. Bottom line

E3-4 is heavily data-dependent, and water accounting is notoriously tricky. To report effectively:

• Master the definitions: Do not confuse withdrawal with consumption. If you pull 1,000 m³ of water from a river to cool a machine, and return 900 m³ safely back to the same river, your withdrawal is 1,000, but your consumption is only 100.
  

  [INSIGHT] 7 important water metrics you should understand

• Pinpoint the stress: The most highly scrutinized number in this disclosure will be water consumption in areas with water stress. Investors are increasingly treating this specific metric as a proxy for physical climate risk.
  

  [INSIGHT] Water scarcity, water stress, and water risk: What’s the difference?

• Meter your operations: Estimation is allowed, but primary data is always preferred. If you don’t have water meters installed at your major production sites, you need to start planning those CapEx investments now.

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Relevant Sources

ESRS E3

November 2025 ESRS E3