European Sustainability Reporting Standards (ESRS)

European Sustainability Reporting Standards (ESRS)

ESRS definition

The European Sustainability Reporting Standards (ESRS) provide a framework for companies to report on environmental, social, and governance (ESG) topics. The 12 standards were drafted by the European Financial Reporting Advisory Group (EFRAG) and must be reported against by all companies subject to the Corporate Sustainability Reporting Directive (CSRD). They specify the information that an organisation must disclose about its material impacts, risks, and opportunities as they relate to sustainability topics. The ESRS were adopted as a delegated act by the European Commission in July 2023, after the CSRD came into force in January. 

ESRS and the CSRD

The CSRD is the legal directive that companies operating in the EU must report on sustainability topics. The directive was proposed by the European Commission in 2021 to replace the Non-Financial Reporting Directive (NFRD) with the intention of enhancing the quality, consistency, and comparability of sustainability reporting. The 12 ESRS are the standards that must be reported against in order to meet the disclosure requirements of the CSRD. 

What are the ESRS?

The ESRS introduce detailed disclosure requirements for a broad set of sustainability topics, structured around environmental, social, and governance factors. The standards emphasise forward-looking information to assess companies' long-term sustainability strategies. 

The ESRS contain two cross-cutting standards, which apply to all sustainability matters, and ten topical standards. 

Cross-cutting standards

ESRS 1: General requirements

  • This standard describes the broad structure of the ESRS, laying out general requirements for preparing and presenting compliant sustainability reports. 

ESRS 2: General disclosures 

  • The second cross-cutting standard establishes the disclosure requirements for high-level reporting on areas such as impact, risk, and opportunity management. 

Environmental standards 

ESRS E1: Climate change

  • This is the key environmental standard that will apply to most companies. The standard relates to climate change adaptation and mitigation, a company’s energy consumption, and risks and opportunities related to climate change. ESRS E1 includes the most mandatory disclosures of the 10 topical standards. 

ESRS E2: Pollution

  • Companies must report on issues including microplastics and any pollution of air, water, soil, or food resources. 

ESRS E3: Water and marine resources

  • This standard relates to a company’s water consumption, withdrawal, and discharges, as well as the extraction and use of other marine resources. 

ESRS E4: Biodiversity and ecosystems

  • Companies must consider their impact on biodiversity loss, the state of species, and the extent and condition of ecosystems. 

ESRS E5: Resource use and circular economy

  • Resource inflows, outflows relating to products or services, and waste are included under this standard. 

Social standards 

ESRS S1: Own workforce

  • This standard requires companies to report on working conditions, equality, and diversity among its own employees. 

ESRS S2: Workers in the value chain

  • Companies must additionally address the working conditions, treatment, and opportunities of workers in the value chain. 

ESRS S3: Affected communities

  • This standard relates to the rights of communities affected by the business’s operations. 

ESRS S4: Consumers and end-users

  • The personal safety, privacy, and social inclusion of consumers and end-users must also be considered. 

Governance standards

ESRS G1: Business conduct

  • The final topical standard addresses corporate culture, with factors including political engagement, corruption and bribery, animal welfare, and the protection of whistleblowers. 

Which ESRS are mandatory?

The cross-cutting and topical standards are sector agnostic, meaning they apply to all organisations covered by the CSRD, regardless of industry. Where a particular topical standard is not material to a company’s operations, it can be omitted in the report with an optional brief explanation.  

However, some of the disclosure requirements of ESRS E1 are covered by other regulations and are therefore mandatory. Even if other regulations do not apply, in order to omit this standard, the reporting company must include a detailed explanation of why it does not consider climate change topics to be material. 

ESRS 2: General disclosures must also be reported against by all companies. Additionally, sector-specific standards will be introduced in the coming years. 

Double materiality

A core principle of the ESRS is double materiality. This principle requires companies to report on two dimensions: financial and impact materiality. These considerations ask how each sustainability aspect affects the company (the "outside-in" perspective) and how each reporting aspect of the company affects people, stakeholders, and the environment (the "inside-out" perspective).  

With this requirement, any topic found to be material according to either or both of these perspectives must be reported on, meaning the current comply-or-explain approach of the NFRD will no longer be applicable.  


Since the European Commission adopted the ESRS as delegated acts in July 2023, the standards are now mandatory for reporting. CSRD obligations will apply from the 2024 financial year at the earliest, meaning the first reports based on the ESRS will be published in 2025.  

Companies can seek support in complying with the new reporting requirements from external experts such as ClimatePartner. We offer a range of consulting services to help companies prepare for and comply with the CSRD and ESRS. Get in touch to find out how we can support you through this transition. 

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