ESRS 1 General requirements

ESRS 1 prescribes the mandatory concepts and principles to be applied when preparing ustainability statements under the CSRD.

A company should disclose all material information about its sustainability-related impacts, risks and opportunities in accordance with the applicable ESRS. In this context, ESRS 1 requires companies in scope to disclose certain sustainability information irrespective of the companies’ judgment of their materiality, including information on governance, strategy, management of impacts risks and opportunities, and metrics and targets related to climate change.

Nonetheless, some disclosure requirements and data points (except those included in ESRS 2 and ESRS E1) may be omitted as long as the objective of the DR is met.Under the ESRS, there are requirements to report standardized disclosures that apply to all entities (sector-agnostic standards) and those that apply to entities doing business in one or s everal specific sectors (sector-specific standards).

ESRS 2 General disclosures

ESRS 2 sets out the disclosure requirements of sustainability reporting that are cross-cutting. This includes general characteristics of the company and an overview of the company’s business but also specific disclosures on compliance such as approximations in relation to value chain and boundaries, estimation uncertainty, changes in preparation and presentation, and prior period errors. Additionally, disclosures about strategy, governance, and the materiality assessment of sustainability impact, risks and opportunity are covered by ESRS 2.

Environmental

Social

Governance

ESRS E1 Climate Change is a Topical ESRS Standard that aims to specify Disclosure Requirements which will enable users of sustainability statements to understand:

• how the undertaking affects climate change, in terms of material positive and negative actual and potential impacts
• the undertaking’s past, current, and future mitigation efforts in line with the Paris Agreement (or an updated international agreement on climate change) and limiting global warming to 1.5°C;
• the plans and capacity of the undertaking to adapt its strategy business model(s) and in line with the transition to a sustainable economy and to contribute to limiting global warming to 1.5°C;
• any other actions taken by the undertaking, and the result of such actions to prevent, mitigate or remediate actual or potential negative impacts
• the nature, type and extent of the undertaking’s material risks and opportunities arising from the undertaking’s impacts and dependencies on climate change, and how the undertaking manages them
• the financial effects on the undertaking over the short-, medium- and long-term time horizons of risks and opportunities arising from the undertaking’s impacts and dependencies on climate change.

ESRS S1 Own Workforce. The objective of this Standard is to specify disclosure requirements which will enable users of the sustainability statements to understand the undertaking’s material impacts on its workforce, as well as related material risks and opportunities, including:

• how the undertaking affects its own workforce, in terms of material positive and negative actual or potential impacts
• any actions taken, and the result of such actions, to prevent, mitigate or remediate actual or potential negative impacts
• the nature, type and extent of the undertaking’s material risks and opportunities related to its impacts and dependencies on its own workforce, and how the undertaking manages them
• the financial effects on the undertaking over the short-, medium- and long-term time horizons of material risks and opportunities arising from the undertaking’s impacts and dependencies on its own workforce.

ESRS G1 Business Conduct is a Topical ESRS Standard in the cluster of Governance. It is the only standard in that cluster.

The objective of this Standard is to specify disclosure requirements which will enable users of the undertaking’s sustainability statements to understand the undertaking’s strategy and approach, processes and procedures as well as its performance in respect of business conduct. In general, the actions of an undertaking cover a wide range of behaviours that support transparent and sustainable business practices to the benefit of all stakeholders. This Standard focusses on the following practices specified by the Corporate Sustainability Reporting Directive (CSRD), indicated in this Standard as business conduct or business conduct matters:

• corporate culture
• management of relationships with suppliers
• avoiding corruption and bribery
• engagement by the undertaking to exert its political influence including lobbying
• protection of whistle-blowers
• animal welfare
• payment practices, specifically with regard to late payment to small and medium enterprises (SMEs).

ESRS E2 Pollution is a Topical ESRS Standard that specifies Disclosure Requirements which will enable users of the sustainability statements to understand:

• how the undertaking affects pollution of air, water and soil, in terms of material positive and negative actual or potential impacts;
• any actions taken, and the result of such actions, to prevent or mitigate actual or potential material negative impacts;
• the plans and capacity of the undertaking to adapt its strategy and business model(s) in line with the transition to a sustainable economy concurring with the needs for prevention, control and elimination of pollution. This is to create a toxic-free environment with zero pollution also in support of the EU Action Plan Towards a Zero Pollution for Air, Water and Soil
• the nature, type and extent of the undertaking’s material risks and opportunities related to the undertaking’s pollution-related impacts and dependencies, as well as the prevention, control, elimination or reduction of pollution (including from regulations) and how the undertaking manages this
• the financial effects on the undertaking over the short-, medium- and long-term time horizons of material risks and opportunities arising from the undertaking’s pollution-related impacts and dependencies.

S2 Workers in the value chain

ESRS S2 Workers in the Value Chain. The objective of this Standard is to specify disclosure requirements which will enable users of the sustainability statements to understand material impacts on value chain workers caused or contributed to by the undertaking, as well as material impacts which are directly linked to the undertaking’s own operations, products or services through its business relationships and its related material risks and opportunities, including:

• how the undertaking affects workers in its value chain, in terms of material positive and negative actual or potential impacts
• any actions taken, and the result of such actions, to prevent, mitigate or remediate actual or potential negative impacts
• the nature, type and extent of the undertaking’s material risks and opportunities related to its impacts and dependencies on workers in the value chain, and how the undertaking manages them
• the financial effects on the undertaking over the short-, medium- and long-term time horizons of material risks and opportunities arising from the undertaking’s impacts and dependencies on workers in the value chain.

ESRS E3 Water and Marine Resources is Topical ESRS Standard. Its objective is to specify Disclosure Requirements which will enable users of the sustainability statements to understand:

• how the undertaking affects water and marine resources, in terms of material positive and negative actual or potential impacts
• any actions taken, and the result of such actions to prevent or mitigate material actual or potential negative impacts and to protect water and marine resources, also with reference to reduction of water consumption
• whether, how and to what extent the undertaking is contributing to the European Green Deal’s ambitions for fresh air, clean water, a healthy soil and biodiversity as well as to ensuring the sustainability of the blue economy and fisheries sectors.
• the plans and capacity of the undertaking to adapt its strategy and business model(s) in line with the preservation and restoration of water and marine resources globally
• the nature, type and extent of the undertaking’s material risks and opportunities arising from the undertaking’s impacts and dependencies on water and marine resources, and how the undertaking manages them
• the financial effects on the undertaking over the short-, medium- and long-term time horizons of material risks and opportunities arising from (i.e., those related to the undertaking’s impacts and dependencies on water and marine resources.

S3 Affected communities

ESRS S3 Affected Communities. The objective of this Standard is to specify disclosure requirements which will enable users of the sustainability statements to understand material impacts on affected communities caused or contributed to by the undertaking, as well as, material impacts which are directly linked to the undertaking’s own operations, products or services through its business relationships and its related material risks and opportunities, including:

• how the undertaking affects communities, in areas where risks are most likely to be present and severe, in terms of material positive and negative actual or potential impacts
• any actions taken, and the result of such actions, to prevent, mitigate or remediate actual or potential negative impacts
• the nature, type and extent of the undertaking’s material risks and opportunities related to its impacts and dependencies on affected communities, and how the undertaking manages them
• the financial effects on the undertaking over the short-, medium- and long-term time horizons of material risks and opportunities arising from the undertaking’s impacts and dependencies on affected communities.

ESRS E4 Biodiversity and Ecosystems. The objective of this Standard is to specify Disclosure Requirements which will enable users of the sustainability statements to understand:

• how the undertaking affects biodiversity and ecosystems, in terms of material positive and negative, actual and potential impacts;
• any actions taken, and the result of such actions, to prevent or mitigate material negative actual or potential impacts and to protect and restore biodiversity and ecosystems
• the plans and capacity of the undertaking to adapt its strategy and business model(s) in line with (i) respecting the planetary boundaries of the biosphere integrity and land-system change, (ii) targets outlined in the Post-2020 Global Biodiversity Framework of no net loss by 2030, net gain from 2030 and full recovery by 2050, the EU Biodiversity Strategy for 2030 with the targets set under the EU Nature Restoration Plan and Enabling Transformative Change and comparable amended or new frameworks and strategies
• the nature, type and extent of the undertaking’s material risks and opportunities related to the undertaking’s impacts or dependencies on biodiversity and ecosystems, and how the undertaking manages them
• the financial effects on the undertaking over the short-, medium- and long-term time horizons of material risks and opportunities arising from the undertaking’s impacts and dependencies on biodiversity and ecosystems.

ESRS S4 Customers and End-Users. The objective of this Standard is to specify disclosure requirements which will enable users of the sustainability statements to understand material impacts on consumers and/or end-users caused or contributed by the undertaking, as well as material impacts which are directly linked to the undertaking’s own operations, products or services through its business relationships and its related material risks and opportunities, including:

• how the undertaking affects the consumers and/or end-users of its products and/or services (referred to in this Standard as consumers and end-users), in terms of material positive and negative actual or potential impacts
• any actions taken, and the result of such actions, to prevent, mitigate or remediate actual or potential negative impacts
• the nature, type and extent of the undertaking’s material risks and opportunities related to its impacts and dependencies on consumers and/or end-users, and how the undertaking manages them
• the financial effects on the undertaking over the short-, medium- and long-term time horizons of material risks and opportunities arising from the undertaking’s impacts and dependencies on consumers and/or end-users.

ESRS E5 Resources and Circular Economy. The objective of this Standard is to specify Disclosure Requirements which will enable users of the sustainability statements to understand:

• how the undertaking affects resource use, including the depletion of non-renewable resources and the regenerative production of renewable resources (referred to in this Standard as resource use and circular economy) in terms of material positive and negative actual or potential impacts
• any actions taken, and the result of such actions, to prevent or mitigate actual or potential material negative impacts arising from resource use and circular economy, including its measures to help decoupling its economic growth from the use of materials
• the plans and capacity of the undertaking to adapt its strategy and business model(s) in line with circular economy principles including but not limited to minimising waste, maintaining the value of products, materials and other resources at their highest value and enhancing their efficient use in production and consumption
• the nature, type and extent of the undertaking’s material risks and opportunities related to the undertaking’s impacts and dependencies, arising from resource use and circular economy, and how the undertaking manages them; and
• the financial effects on the undertaking over the short-, medium- and long-term time horizons of material risks and opportunities arising from the undertaking’s impacts and dependencies on resource use and circular economy.