Understanding the ESRS standards: What you need to know

The ESRS standards are part of the Corporate Sustainability Reporting Directive that came into force in January 2023. Find out what the most important aspects of the ESRS standards are and how they affect your company.

What are the ESRS standards?

The ESRS standards (European Sustainability Reporting Standards) are guidelines issued by the European Financial Reporting Advisory Group (EFRAG) for uniform sustainability reporting in the EU. The ESRS were adopted by the European Commission as a delegated regulation on July 31, 2023. They cover topics such as ESRS E1 for environmental aspects and ESRS S2 for social aspects. As an integral part of the Corporate Sustainability Reporting Directive (CSRD), the ESRS standards define the requirements that companies must fulfill for their sustainability reports must fulfill .

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How do the ESRS standards affect companies?

The ESRS standards require companies to collect and disclose comprehensive ESG data. Although this increases the effort required for reporting, it promotes transparency and strengthens the trust of investors and other stakeholders. Companies must adapt their processes and possibly invest in new technologies in order to meet the requirements of European Sustainability Reporting. Compliance with the ESRS standards can also give companies a competitive edge by making sustainable business visible.

Cover Instructions for implementing the ESRS standards

Free guide: How to implement the ESRS standards

To whom do the ESRS standards apply?

The ESRS standards must be implemented by around 15,000 companies in Germany and around 50,000 companies in Europe as part of the CSRD:

Companies that are listed on an EU-regulated market and fulfill two of the following three criteria:

total assets of over 25 million euros,
Net sales of over 50 million euros,
or more than 250 employees.

Companies not based in the EU are affected if they have subsidiaries that are listed SMEs or large companies. They are also affected if they generate more than 150 million euros in net sales on a consolidated basis.

Third-country companies with branches in the EU are subject to the ESRS standards if they exceed certain turnover and revenue limits.

Micro-enterprises are excluded from the European Sustainability Reporting obligation.

Timeline of CSRD reporting

Timeline CSRD reporting

Overview of the ESRS standards German

The EFRAG standards are divided into the general standards ESRS 1 and ESRS 2 and the topic-specific standards:

Table ESRS standards for CSRD reporting

The difference between ESRS 1 and ESRS 2

ESRS 1 sets out general requirements for sustainability reporting, including application rules, reporting structure and principles. It includes:

Requirements for double materiality
Involvement of stakeholders
Reporting on supply and value chains.

Companies can omit reporting standards if the topics covered are considered immaterial. The requirements of ESRS 2 "General Disclosures" are mandatory.

ESRS 2 defines cross-thematic reporting requirements, including governance structures, strategies and business models in relation to sustainability issues. It describes the process for identifying material sustainability-related impacts, risks and opportunities (IROs). ESRS 2 defines minimum reporting requirements:

Corporate policies,
Key figures,

and follows a structure recommended by the Task Force on Climate-related Financial Disclosures (TCFD) to ensure compatibility with international standards. This structure also applies to the topic-related ESRS standards.

The topic-specific ESRS standards in detail

Environmental standards (ESRS E1-E5)

ESRS E1 covers the collection and disclosure of greenhouse gas emissions, climate risks and opportunities as well as strategies and measures to reduce emissions.

ESRS E2 requires the disclosure of data on air, water and soil pollution as well as measures to prevent and control pollutants.

ESRS E3 includes reporting on water consumption, water quality, protection of marine resources and strategies for the sustainable use of water.

ESRS E4 requires the disclosure of information on biodiversity, protection measures for ecosystems and the impact of corporate activities on biodiversity.

ESRS E5 covers reporting on the consumption of natural resources, resource conservation strategies and measures to promote a circular economy.

Social standards (ESRS S1-S4)

ESRS S1 requires the disclosure of data on working conditions, remuneration, diversity, health and safety as well as training and development of the company's own employees.

ESRS S2 covers the working conditions, rights and safety of employees throughout the company's supply chain.

ESRS S3 requires disclosure of the company's impact on local communities, including social, economic and environmental aspects.

ESRS S4 includes the protection of consumer rights, product safety, customer satisfaction and data protection.

Governance standards (ESRS G1)

ESRS G1 requires the disclosure of information on corporate governance, including the structures and processes, the composition and independence of the Management Board and the remuneration policy.

ESRS G2 covers reporting on measures to ensure business ethics and integrity, including anti-corruption policies, whistleblowing mechanisms and compliance programs.

ESRS G3 requires disclosure on risk management practices, internal controls and the identification and management of ESG risks.

ESRS G4 contains the requirements for transparency in reporting, including the disclosure of sustainability data, reporting processes and compliance with reporting standards.

Knowledge of the ESRS standards and CSRD

Preview image Guide to implementing the ESRS

How-to: ESRS standards made easy

Preview image CSRD info sheet

Infosheet: Compact knowledge on CSRD

Guidance on the CSRD reporting guideline

How-to: CSRD including double materiality

To all guides

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FAQ on the ESRS standards

What is ESRS?

ESRS (European Sustainability Reporting Standards) is a set of standards developed by the European Financial Reporting Advisory Group (EFRAG) to ensure uniform and transparent sustainability reporting in the EU. These ESRS standards are part of the European Sustainability Reporting Initiative and play a central role in the implementation of the Corporate Sustainability Reporting Directive (CSRD).

The ESRS standards are divided into
- the ESRS 1,
- ESRS 2
- and the topic-specific standards.

ESRS 1 defines general reporting requirements and principles, while ESRS 2 sets out specific cross-thematic reporting requirements. The ESRS standards are intended to help companies to record and disclose their ESG performance in detail in order to promote transparency and comparability.

Which ESRS standards are mandatory?

The ESRS standards, which are mandatory, primarily comprise ESRS 1 and ESRS 2. ESRS 1 defines general requirements and principles for sustainability reporting. ESRS 2 sets out specific cross-thematic reporting requirements , including governance structures and the identification of material sustainability-related impacts, risks and opportunities (IROs). In addition, depending on the relevant topics, companies must also comply with specific standards such as ESRS E1 for environmental aspects.

What is the difference between CSRD and ESRS?

The Corporate Sustainability Reporting Directive (CSRD) and the European Sustainability Reporting Standards (ESRS) are closely linked, but they have different roles. The CSRD is an EU directive that obliges companies to report comprehensively on their sustainability performance. It specifies which companies are obliged to report and what information must be disclosed. The ESRS standards, on the other hand, are the standards developed by the European Financial Reporting Advisory Group (EFRAG), which define the specific requirements and content of this reporting in detail. While the CSRD provides the legal framework, the ESRS standards (including ESRS 1 and ESRS 2) provide the specific guidelines that companies must follow in order to meet the requirements of the CSRD

How many data points do the ESRS standards have?

The ESRS standards include specific data points that companies must collect and disclose to report their sustainability performance. These data points cover various areas, including environmental aspects (ESRS E1), social aspects and governance structures. Set 1 of the ESRS contains 1178 data points. 265 of these are voluntary.