Water in ESG Reporting: Key standards, stewardship frameworks and risk management tools

Why water standards matter 

Water challenges are becoming more complex due to climate change, population growth, industrial expansion and increasing competition for limited resources. Investors, regulators, customers and communities are also seeking greater transparency on how organisations manage water-related risks and impacts. 

Water-related standards and guidance help organisations: 

Together, these frameworks provide a common language for understanding, measuring and communicating water-related performance. They also help organisations move from reactive water management towards more strategic and proactive approaches that support both environmental sustainability and business resilience. 

The growing focus on water in sustainability reporting 

Historically, environmental reporting focused heavily on greenhouse gas emissions and energy use. Water is now increasingly recognised as a material sustainability issue across many sectors, particularly those with significant operational or supply-chain dependencies. 

Organisations are expected to move beyond simple reporting of water consumption and demonstrate how they manage water-related risks, impacts, opportunities and stakeholder relationships. Stakeholders want to understand not only how much water an organisation uses, but also where it operates, how local water systems may be affected and how water-related risks could influence future business performance. 

This shift has led to the development of both reporting standards and water stewardship frameworks that support more comprehensive water management. Some frameworks focus primarily on disclosure and reporting, while others support stewardship, risk assessment and operational improvement. Understanding the role of each can help organisations select an appropriate combination for their sustainability objectives. 

Key water-related standards and frameworks 

Global Reporting Initiative (GRI 303) 

The GRI Water and Effluents Standard (GRI 303) is one of the most widely used frameworks for water disclosure. 

It focuses on: 

GRI encourages organisations to consider local water contexts and explain how their activities affect water resources, ecosystems and stakeholders. Its emphasis on location‑specific impacts makes it particularly useful for organisations operating in water‑stressed regions. 

IFRS Sustainability Disclosure Standards 

Water-related disclosures can be relevant under the sustainability standards developed for capital-market‑oriented reporting. While water does not yet have a dedicated standard, organisations are expected to report water-related risks and opportunities where these are financially material. Water issues often arise in relation to climate resilience, nature-related impacts, operational continuity and enterprise risk. 

This reflects a growing expectation that water risks be integrated into broader business strategy, financial planning and risk management processes rather than treated as a purely operational issue. 

European Sustainability Reporting Standards (ESRS E3) 

Within the ESRS framework, ESRS E3 covers Water and Marine Resources. 

ESRS E3 requires organisations to disclose information relating to: 

The standard places significant emphasis on understanding local water contexts, value‑chain impacts and the relationship between business activities and water‑related ecosystems. For organisations subject to the Corporate Sustainability Reporting Directive (CSRD), ESRS E3 provides a structured approach to reporting on water-related risks, impacts and opportunities. 

CDP Water Security 

CDP Water Security is one of the most recognised voluntary disclosure frameworks focused specifically on water. 

The questionnaire helps organisations assess and disclose: 

Many investors use CDP responses to evaluate corporate water management maturity, preparedness and resilience. The framework also supports organisations in identifying water-related risks that could affect operations, supply chains and financial performance. 

CEO Water Mandate 

The CEO Water Mandate, under the UN Global Compact, provides practical guidance on corporate water stewardship. 

It encourages organisations to focus on six areas: 

The guidance is particularly useful for organisations seeking to move beyond compliance and towards strategic water stewardship. It emphasises collaboration and collective action, recognising that many water challenges extend beyond individual facilities or organisations. 

Understanding water stewardship 

Water stewardship goes beyond reducing water consumption. It involves managing water resources in a way that is socially equitable, environmentally sustainable and economically beneficial. Effective stewardship recognises that water challenges are often shared across watersheds and require collaboration between businesses, governments, communities and other stakeholders. 

Rather than focusing solely on operational efficiency, water stewardship encourages organisations to consider broader impacts on ecosystems, local communities and long‑term water availability. This approach helps businesses better understand their dependencies on water resources while contributing to more sustainable outcomes. 

Key elements of water stewardship include: 

As stakeholder expectations and disclosure requirements evolve, water stewardship is becoming an increasingly important component of sustainability strategy, risk management and corporate resilience. Frameworks such as AWS, the CEO Water Mandate and emerging nature‑target guidance help organisations translate stewardship principles into practical actions and measurable outcomes. 

Water stewardship frameworks and tools 

Alliance for Water Stewardship (AWS) 

The Alliance for Water Stewardship Standard is widely regarded as a leading framework for water stewardship. 

Rather than focusing solely on disclosure, AWS promotes action and continuous improvement through: 

The framework helps organisations address water challenges at both facility and watershed levels, encouraging a more holistic approach to water management and stakeholder engagement. 

Science Based Targets Network (SBTN) 

The Science Based Targets Network provides guidance for organisations seeking to set science‑based targets for nature, including freshwater resources. 

For water, SBTN encourages organisations to: 

SBTN follows a structured approach that supports assessment, prioritisation, target setting and tracking progress over time, helping organisations connect water management activities with broader nature and biodiversity objectives. 

World Resources Institute Aqueduct 

The World Resources Institute Aqueduct tools support water‑risk assessment by helping organisations evaluate: 

Many organisations use Aqueduct to identify operational and supply‑chain water hot spots, compare locations and prioritise risk‑management efforts. 

WWF Water Risk Filter 

The WWF Water Risk Filter combines basin‑level risk information with site‑specific operational assessments. 

It helps organisations: 

It is often used alongside broader sustainability and stewardship programmes to link risk insights to practical action plans. 

Choosing the right framework 

No single framework addresses every aspect of water management. Many organisations therefore use a combination of standards and tools depending on their objectives. 

Objective - Common frameworks and tools 

Sustainability reporting - GRI 303, ESRS E3 

Investor and market disclosure - CDP Water Security, financially material water disclosures under capital ‑ market standards 

Water stewardship - AWS Standard, CEO Water Mandate 

Science‑based targets - SBTN (freshwater components) 

Water‑risk assessment - WRI Aqueduct, WWF Water Risk Filter 

Regulatory alignment support - ESRS E3, local/sector‑specific water rules 

Leading organisations combine disclosure standards, stewardship initiatives and risk‑assessment tools to create a more comprehensive view of water‑related impacts and dependencies. The mix should be guided by: 

Looking ahead 

Water-related reporting and management expectations will continue to evolve alongside broader sustainability and nature‑related disclosure developments. As investors, regulators and customers place greater emphasis on water security, organisations are expected to demonstrate a deeper understanding of their water‑related impacts, dependencies and risk‑management approaches. 

Water security is increasingly linked to business resilience, supply‑chain stability and long‑term value creation. Organisations therefore need to move beyond measuring water use alone and develop a more comprehensive picture of how water influences operations, stakeholder relationships and future growth. 

By aligning with recognised standards and guidance, organisations can strengthen transparency, improve water stewardship and enhance decision making. Those that proactively integrate water into sustainability, governance and risk‑management processes will be better positioned to navigate future environmental, regulatory and market challenges, while contributing to more sustainable water‑management outcomes.