Understanding your business’ relationship with water

Water is likely to come up as a common theme across ESRS E2, E3 & E4. Taking time to gather data is vital.

Written by Principal Scientist in Agriculture, Dr Robert Allen.

Water matters

For all sectors of economic activity, water is a vital thread, weaving its importance through many aspects of our lives. We use water on a daily basis, from personal consumption to large scale industrial processes. We all depend on healthy aquatic environments, capable of supporting biodiversity, and robust hydrological systems which play a crucial role in flood mitigation, reducing risk of drought, and filtering pollution. These are valuable ecosystem services that benefit both business and society.

Understanding this interdependence is why we, at natcap, have introduced new ESRS E3 metrics, completing a comprehensive suite of nature-related metrics. This allows us to support you to measure, report, and act against CSRD E2, E3 & E4, effectively and efficiently.

Ladybower Reservoir in the Peak District, by Matthew Feeney

Why water matters

Water scarcity and quality issues demand collective management of global water resources to address the needs of both humanity, business and the biodiversity and nature crises.

It’s everyone’s responsibility, but industry has a fantastic opportunity to make a big impact.

To contribute effectively, individual companies should gain a detailed understanding of their direct and indirect dependencies on water within their operations and supply chains. This also aligns with the CSRD double materiality assessment framework, an essential first step for understanding your interface with nature.

If you’re required to comply with CSRD, water is potentially material for your business in multiple of the European Sustainability Reporting Standards (ESRS), and therefore you may need to report on these. Water can be material in ESRS E2 (pollution to water), ESRS E3 (water consumption & water stress), and ESRS E4 (biodiversity and environmental integrity dependent on water). Natcap offers a suite of metrics to make understanding your organisation’s impacts, risks & opportunities simple, quick and easy.

Understanding these metrics enables businesses, like yours, to truly comprehend their relationship with water and identify the most impactful changes you can make.

Let’s dive into what these metrics look like in a bit more detail

E2: Pollution

To understand pollution, locating and prioritising the environmental impact of assets across a business or supply chain is no easy task.

We use data from the Pollution Reporting and Transfer Register to report the locations, types, and amounts of pollutants emitted to water. Going beyond raw data, we add context by identifying sites emitting pollution to land and water located in areas of water stress. This contextual layer helps prioritise sites that are likely to be considered material in assessing environmental impact.

E3: Water Use

Companies may be required to provide details on water use concerning significant impacts, risks, and opportunities related to this usage. Including total usage within regions, information on water that is reused or recycled, and water intensity (consumption/net revenue).

With site-specific data we can help you report on water consumption. To demonstrate best practice sites should have water management policies, particularly if in areas of water stress, something we’ll support with too. We do this by analysing on site location data, water management plans, and water stress, to provide a contextual layer that aids in understanding the nuances of water use and potential risks associated with it. Creating the foundations for a solid water management policy and plan.

E4: Biodiversity

Water also impacts biodiversity and ecosystems. And under ESRS E4, you may need to disclose how your business manages material impacts, risks and opportunities accordingly, among other things.

By using site-specific data, we measure ecological integrity, decline, water stress levels, and ecosystem services at the site. This comprehensive approach offers insights into the impact of industrial activities on biodiversity and environmental health. Allowing you to integrate nature into your business decision-making.

Aggregating data across all sites and the value chain provides a holistic perspective, rapidly identifying exposure to water-related risks and guiding effective water management improvements.

In summary

Understanding your interface with water and nature is vital to help you reduce your organisation's impact on nature.

Water is likely to come up as a common theme across ESRS E2, E3 and E4. Identifying all your material matters relating to water as part of your double materiality assessment is essential for ensuring the long term resilience and viability of businesses.

With such a complex interplay, it takes a lot of data and time to build a reliable understanding of this, which is why we’ve done the hard work of creating a suite of metrics to guide companies through measurement, reporting and creating a plan of action.

If your value chain interacts with nature, get in touch today to see how you can speed up your understanding of it.

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