#ESRS Standards: Your Essential Overview

Summary

The video introduces the European Sustainability Reporting Standards (ESRS), adopted by the European Commission in July 2023, as a crucial framework for ESG reporting. Emphasizing a double materiality approach, the ESRS requires businesses to disclose both financial and sustainability impacts across various areas, including climate change, pollution, and social responsibility. The standards aim to enhance transparency and accountability in sustainability practices. The CSRD Compass offers essential resources and guidance for businesses navigating compliance, encouraging them to leverage these standards as an opportunity to demonstrate their commitment to sustainability and attract responsible stakeholders.

Takeaways

• 🌍 The CSRD Compass is a resource for achieving full compliance with the European Sustainability Reporting Standards (ESRS).
• 📅 The ESRS were adopted by the European Commission on July 31, 2023, to enhance sustainability reporting across Europe.
• 🔄 The ESRS employs a double materiality approach, requiring companies to report on both financial and sustainability impacts.
• 📈 Companies must provide forward-looking disclosures about their sustainability improvement plans and targets.
• 📊 The ESRS consists of 12 standards, including general requirements, environmental, social, and governance standards.
• 🌱 ESRS 1 outlines the general requirements for sustainability reporting, while ESRS 2 mandates general disclosures about governance and strategy.
• 💧 The environmental standards (E1 to E5) cover climate change, pollution, water resources, biodiversity, and resource use.
• 👥 The social standards (S1 to S4) address impacts on the workforce, workers in the value chain, affected communities, and consumers.
• 🛡️ The governance standard (G1) focuses on corporate governance and business conduct, including anti-corruption measures.
• 🔍 Implementing ESRS enhances transparency and accountability, allowing stakeholders to compare sustainability performances across companies.

Q & A

What are the European Sustainability Reporting Standards (ESRS)?

The ESRS are mandatory guidelines adopted by the European Commission to enhance the quality and comparability of sustainability reporting across Europe, focusing on environmental, social, and governance (ESG) performance.

When were the ESRS adopted?

The ESRS were adopted by the European Commission on July 31, 2023.

What is meant by a 'double materiality approach' in the context of ESRS?

The double materiality approach requires companies to report on both their financial impacts and their sustainability impacts, emphasizing the interconnectedness of these factors.

How do the ESRS align with TCFD recommendations?

The ESRS align with the Task Force on Climate-related Financial Disclosures (TCFD) by echoing a comprehensive approach to sustainability reporting, particularly in climate-related disclosures.

What are the two general standards within the ESRS?

The two general standards are ESRS 1: General Requirements, which outlines general sustainability reporting requirements, and ESRS 2: General Disclosures, which mandates the disclosure of governance and strategy-related information.

What types of information must companies disclose under ESRS E1: Climate Change?

Companies must disclose information regarding their greenhouse gas emissions, adaptation and mitigation strategies, and exposure to climate-related financial risks.

What is the focus of ESRS S1: Own Workforce?

ESRS S1 focuses on the impact of a company's operations on its own workforce, requiring disclosure of employment practices, employee characteristics, and compensation details.

What is the significance of ESRS G1: Business Conduct?

ESRS G1 emphasizes corporate governance and business ethics, requiring companies to disclose practices related to anti-corruption, supplier relationships, and management of corporate culture.

How will the implementation of ESRS benefit businesses?

The implementation of ESRS will enhance transparency and accountability, allowing stakeholders to compare sustainability performance among companies, which can build trust and improve market standing.

What resources does The CSRD Compass offer to businesses seeking compliance?

The CSRD Compass provides a range of resources including detailed guides, insightful articles, comprehensive courses, and expert analysis to help businesses navigate CSRD and ESRS compliance.