European Sustainability Reporting Standards

The ESRS define what sustainability-related information companies must report and how to report it, ensuring consistency, comparability, and transparency across the EU.

Key features:

• Cover environmental, social, and governance topics.

• Apply the double materiality principle.

• Structured into cross-cutting standards and topical standards.

• Designed to be interoperable with global frameworks like GRI, ISSB, and TCFD.

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Structure of the ESRS:

1. Cross-cutting standards (general principles and disclosures):

o ESRS 1: General Requirements

o ESRS 2: General Disclosures

2. Topical standards (subject-specific):

o Environmental: ESRS E1–E5 (e.g., Climate, Pollution, Water, Biodiversity, Circular Economy)

o Social: ESRS S1–S4 (e.g., Own workforce, Value chain workers, Affected communities, Consumers)

o Governance: ESRS G1 (e.g., Business conduct)

Applicability: Mandatory for all companies subject to CSRD, with scalability for SMEs.

1. What does ESRS stand for?

European Sustainability Reporting Standards.

2. Who developed the ESRS?

EFRAG, acting as technical advisor to the European Commission.

3. How many ESRS standards are there?

As of the first set adopted in 2023: 12 standards – 2 cross-cutting and 10 topical.

4. What is the purpose of the ESRS?

To guide companies in comprehensive, consistent, and comparable sustainability reporting under the CSRD.

5. What is the difference between ESRS and CSRD?

CSRD is the law, and ESRS are the detailed reporting rules that explain how to comply with it.

6. What is “double materiality” in ESRS?

Companies must report both on how sustainability issues affect their business (financial materiality) and how their operations impact people and the environment (impact materiality).

7. Are all ESRS standards mandatory?

ESRS 1 and 2 are mandatory. Topical standards depend on a materiality assessment — if the topic is material, reporting is required.

8. What’s the difference between ESRS E1 and E5?

o E1: Climate Change

o E5: Resource Use and Circular Economy

Each addresses different environmental focus areas.

9. How do ESRS align with global standards like GRI or ISSB?

ESRS were designed to be interoperable with frameworks like GRI, ISSB (IFRS S1/S2), and TCFD, to reduce duplication and reporting burden.

10. Will companies need to get ESRS disclosures audited?

Yes, limited assurance over sustainability reporting is required under CSRD, including compliance with ESRS.

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