[INSIGHT] E3: Water scarcity, water stress, and water risk: What’s the difference?
ESRS E3: Water scarcity, water stress, and water risk: What’s the difference?
1. Introduction
Water-related terms are often used interchangeably in policy, sustainability reporting, and corporate disclosures. But water scarcity, water stress, and water risk describe different concepts. Understanding the distinction matters, because each term points to a different problem and requires different solutions.
In this article, you’ll learn:
✅ What water scarcity, water stress, and water risk actually mean
✅ How these concepts differ, and why they are not interchangeable
✅ How they relate to each other
✅ Why complexity increases as you move from scarcity to stress to risk
By the end, you should be able to look at a water-related claim—whether in a report, a policy document, or the news—and quickly understand what kind of problem is being described, and what kind of response it calls for.
2. Water scarcity: when there is not enough water
Water scarcity describes a situation where there is physically too little freshwater available in a region.
It answers a simple question:
How much water exists here, regardless of how it is used?
Scarcity is mainly shaped by natural conditions, not management choices. Climate, geography, and hydrology determine how much water enters a system, how much evaporates, and how much can be stored in rivers, lakes, or aquifers.
Key features of water scarcity
Focuses on absolute availability
Usually long-term or structural
Strongly influenced by:
Low rainfall
High evaporation
Arid or semi-arid climates
Limited or depleted groundwater
Because of this, water scarcity does not change quickly. Even excellent water management cannot easily overcome a fundamentally water-poor environment.
Example
A desert basin with little rainfall and slow groundwater recharge is water-scarce, even if demand is relatively low.
In short:
Water scarcity = not enough water exists.
3. Water stress: when demand overwhelms the system
Water stress describes the pressure placed on water resources when demand approaches or exceeds what the system can reliably provide, or when water quality limits its use.
It answers a different question:
Is the water system under strain from use, competition, or pollution?
Unlike scarcity, water stress is strongly influenced by human activity and can vary over time.
Common drivers of water stress
Agricultural irrigation
Rapid urban growth
Industrial withdrawals
Groundwater over-extraction
Pollution reducing usable water
Seasonal peaks in demand
Water stress often appears seasonally, for example during dry months when withdrawals peak but river flows are low. Over time, repeated stress can become chronic.
Example
A river still flows year-round, but heavy irrigation and urban withdrawals leave too little water for downstream users or ecosystems during the dry season.
In short:
Water stress = water exists, but we are pushing the system too hard.
4. Water risk: when water problems cause real harm
Water scarcity and water stress describe conditions.
Water risk describes the consequences of those conditions.
Water risk refers to the likelihood and severity of negative impacts caused by water scarcity, stress, or mismanagement. It asks:
What could go wrong because of water, and how serious would the impact be?
Main types of water risk
Physical risks
Droughts, shortages, floods, declining groundwater, poor water qualityRegulatory risks
Abstraction limits, stricter permits, higher water pricesReputational risks
Conflict with communities, NGO pressure, loss of social licence
Risk is context-specific. Two facilities in the same basin may face very different risks depending on their water dependence, efficiency, governance, and relationships with local stakeholders.
In short:
Water risk = the real-world consequences of water problems.
5. How these concepts fit together
These terms are not interchangeable. They describe different layers of the same system:
Water scarcity defines the physical baseline
Water stress describes pressure on that baseline
Water risk captures the impacts when pressure meets exposure
This explains why different combinations are possible:
A region can be water-scarce but not water-stressed if demand is low
A region can be water-stressed without being truly scarce if demand or pollution overwhelms supply
Risk only emerges when scarcity or stress affects people, ecosystems, or operations
6. From scarcity to risk: increasing complexity
As you move from water scarcity to water stress and finally to water risk, the problem becomes progressively more complex.
Each concept adds new layers to the analysis.
Water scarcity is relatively simple.
It is primarily a physical condition. How much water is available depends largely on climate, geography, and hydrology. Scarcity can often be described using a small number of biophysical variables.Water stress is more complex.
It still depends on physical availability, but it also reflects human behaviour: how water is withdrawn, when demand peaks, how pollution affects usability, and how different users compete for the same resource. Seasonal patterns, infrastructure, and management choices start to matter.Water risk is the most complex.
It goes beyond the water system itself and includes economic, regulatory, social, and reputational dimensions. Risk depends not only on basin conditions, but also on who is exposed, how dependent they are on water, and how well they can respond.
In other words, each step adds new sources of uncertainty:
From natural variability (scarcity),
To human pressure and competition (stress),
To impacts, decisions, and consequences (risk).
This is why water risk assessments are inherently more difficult than scarcity or stress assessments—and why they require more judgement, context, and interpretation.
7. Related terms you may encounter
A few additional terms often appear in discussions of water stress and scarcity:
Baseline water stress
A measure of total water withdrawals relative to renewable supplyWater depletion
Focuses on water that is consumed and not returned to the systemBlue water and green water
Blue water: rivers, lakes, aquifers
Green water: soil moisture used by plants
Environmental flow requirements
Minimum water needed to sustain river ecosystems
8. The takeaway
Scarcity tells us whether water exists.
Stress tells us whether we are overusing it.
Risk tells us what happens when that overuse has consequences.
Confusing these concepts leads to poor decisions, weak disclosures, and ineffective water strategies. Getting them right enables clearer analysis, better prioritisation, and more credible water stewardship.
Relevant Sources
Clarify Water Stress, Water Scarcity, and Water Risk - WRI, Aqueduct
The measurement of water scarcity: Defining a meaningful indicator - PMC (WSI)
Chapter 4: Water | Climate Change 2022: Impacts, Adaptation and Vulnerability
Aqueduct Global Maps 2.0 | Working Paper | World Resources Institute