Companies with complex, multi-site operational footprints are reporting that data collection for ESRS E3 alone takes six to nine months from a standing start. Wave 2 companies are now scheduled to report on fiscal year 2027 data (in 2028), rather than fiscal year 2025 data.
If your team has not yet started building the underlying data infrastructure, the math on getting to a defensible first disclosure is difficult.
The core data gap for most companies is not at the portfolio level — it is at the site level. ESRS E3 requires disclosure of water withdrawal volumes by source type (surface water, groundwater, rainwater, third-party water), water consumption in water-stressed areas specifically, and wastewater discharge quality and destination. Most companies have portfolio-level estimates for some of these figures. Very few have facility-level data disaggregated to the degree E3 requires.
The watershed-level stress assessment is the deeper challenge. ESRS E3 does not ask generally whether your company operates in water-stressed regions. It requires a formal assessment of which operations are located in areas of high or very high water stress — using a recognized methodology — and what the material risks and dependencies are at those locations. WRI Aqueduct and similar tools provide the stress data. The work is in cross-referencing every significant operational site against that data and documenting the methodology used to make the determination.
EFRAG's implementation guidance makes clear that companies cannot substitute qualitative statements about water stewardship commitments for quantitative data. Auditors reviewing first-cycle CSRD disclosures are expected to scrutinize the robustness of the underlying data — which means a disclosure built on estimates and assumptions will face more difficult assurance conversations than one built on site-level measurement.
The highest-priority action is site triage. Not every facility in your operational portfolio will be material for ESRS E3 purposes. Identify your highest water-use sites, your sites in regions with known water stress, and your sites in sectors with regulatory water risk — and concentrate data collection resources there first. A rigorous disclosure for your ten most material sites is more defensible than superficial data across your entire portfolio.
Next, engage your facilities teams on the data they actually have. Utility bills, water purchase records, and wastewater discharge reports are often already sitting in facilities management systems. They may not be in the format ESRS E3 requires, but they are the raw material from which compliant data can be constructed. The facilities engagement conversation — framed as data collection rather than compliance obligation — often moves faster than sustainability teams expect.
Finally, build the methodology documentation as you go. ESRS E3 will ask not just what your data shows but how it was collected and what it covers. Companies that document their data collection methodology as they build it will have a more straightforward assurance process than those who try to reconstruct the methodology from finished data at the end.
ESRS E3 readiness matters beyond the formal reporting obligation. Institutional investors are using E3 logic to structure water risk questions in shareholder engagement and ESG ratings assessments — regardless of whether a company has a formal CSRD reporting obligation. Companies that have built the underlying data infrastructure to answer those questions with specificity will find investor conversations going differently than companies that are still assembling the data. That is a commercial reality for 2026, not a future risk.
