The Corporate Sustainability Reporting Directive (CSRD) was the EU sustainability-disclosure regime that was supposed to bring 50,000 companies into mandatory ESG reporting starting 2024. The European Sustainability Reporting Standards (ESRS), drafted by EFRAG, defined what those companies had to disclose. E3 is the water-and-marine-resources topical standard. Between the original 2023 standards and 2026 reporting, two major waves of simplification rewrote the picture: the February 2025 Omnibus political package, and the November 2025 EFRAG Amended ESRS that cut the datapoint count by about 61 percent. The combined effect is that fewer companies report, and those that do report less, with full implementation shifted to financial year 2027.
The original CSRD applied to listed SMEs, large EU and non-EU companies, and many third-country groups. After Omnibus, the mandatory-scope test became cumulative: a company must have more than 1,000 employees and more than 450 million euros in net turnover to fall under the obligation. The 25-million-euro balance-sheet figure that appears in some commentary comes from the Accounting Directive's general "large company" size criteria and is not the CSRD entry threshold. Listed SMEs were removed from mandatory scope entirely. The first reporting cycle for the reduced scope is FY2027, with the option to report voluntarily for FY2026. The number of in-scope companies dropped from roughly 50,000 to roughly 10,000 across the EU.
If your company is in scope and water is material, ESRS E3 expects disclosure on:
Pollution-of-water disclosures sit in ESRS E2 (pollution), not E3, but they share the same operational data so most companies report them together.
The November 2025 Amended ESRS removed several E3 datapoints that EFRAG and many preparers viewed as low-decision-usefulness or duplicative. Specifically, the requirement to disclose water withdrawal per business activity at the site level was relaxed to aggregate enterprise level. The list of mandatory water-stress definitions narrowed to a single recognised classification per preparer choice. Forward-looking water-stress projections, which were widely flagged as speculative, became voluntary. The reduction is not zero but it is meaningful: a mid-cap industrial preparer can now produce an E3 report in roughly half the analyst-days that the 2023 version required.
ESRS uses a double-materiality test: a topic is reported if it is financially material (water risk affects company value) or impact material (the company affects water resources). Water is automatically material for water-intensive industries: food and beverage, textiles, pulp and paper, mining, chemicals, pharmaceuticals, semiconductor, agriculture, power generation, and data centers. Service industries with small water footprints can declare E3 immaterial after a documented assessment, which is a brief disclosure rather than a full E3 report.
ESRS E3 does not require ISO 14046 explicitly, but it expects volumetric and impact-based disclosure that ISO 14046 already provides. A company with a current ISO 14046 footprint already has 80 percent of the E3 metric set ready: blue water consumption, grey water (in CSRD language, "water emissions"), and scarcity-weighted impact via AWARE. Reusing the ISO 14046 inventory for E3 avoids duplicate methodology development and is the most efficient path for water-intensive preparers.
CSRD reports go through limited assurance starting from the first reporting year, with reasonable assurance proposed (but not yet mandated) for later years. The auditor checks the disclosure against the EFRAG ESRS text and against the underlying operational records. The most common audit finding on E3 is incomplete watershed-stress classification: companies disclose total water withdrawal but cannot map it to the WRI Aqueduct or AWARE catchments, which the auditor needs to verify the scarcity-weighted number.
If your first mandatory report is FY2027, the realistic timeline is: complete a double-materiality assessment by Q3 2026, lock the boundary and metric set by year-end 2026, run a trial reporting cycle on FY2026 data internally during 2026, publish the first mandatory report by mid-2028. Building the underlying water inventory now (ISO 14046-aligned, by catchment) is the single highest-leverage step.