EU CSRD | ESRS
Beginning in 2025, the European Union will enforce a mandate requiring large, publicly traded companies to provide comprehensive disclosures concerning the risks and opportunities associated with their Environmental, Social, and Governance (ESG) practices.
The CSRD is underpinned by the Environmental, Social, and Governance Reporting Standards (ESRS) package, which outlines the specific requirements for companies in terms of disclosure and reporting procedures. This package includes the European Commission's Delegated Act, which sets forth two overarching standards and an additional ten sustainability standards for the disclosure of ESG-related information. These standards will become legally binding across the EU from January 1, 2024.
The ESRS package, sometimes referred to as the initial set of ESRS, also includes two appendices. Appendix I presents the revised 12 ESRS, while Appendix II offers a compilation of acronyms and a glossary of terms.
The 12 ESRS encompass various dimensions:
Cross-Cutting Standards:
ESRS 1 – General Requirements
ESRS 2 – General Disclosures
Environmental Standards:
ESRS E1 – Climate Change
ESRS E2 – Pollution
ESRS E3 – Water and Marine Resources
ESRS E4 – Biodiversity and Ecosystems
ESRS E5 – Resource Use and Circular Economy
Social Standards:
ESRS S1 – Own Workforce
ESRS S2 – Work in the Value Chain
ESRS S3 – Affected Communities
ESRS S4 – Consumers and End-Users
Governance Standards:
ESRS G1 – Business Conduct
These standards are closely aligned with the structure of the Task Force on Climate-related Financial Disclosures (TCFD), with the objective of enhancing transparency and accountability in corporate sustainability reporting.