Download Policy Factsheet
Fill out the form below to access our summary document, with all the essential information you need.

Since January 2024, the European Sustainability Reporting Standards (ESRS) have set the framework for sustainability reporting in Europe. This change comes with the Corporate Sustainability Reporting Directive (CSRD) enforcing the first 12 European ESRS, aiming to standardise and enhance the transparency of environmental, social, and governance (ESG) reporting across the continent.

This landmark initiative aims to elevate the rigour and transparency of non-financial reporting to match that of financial reporting, requiring businesses within the CSRD's scope to adopt these standards. The ESRS framework aims to provide a transparent, accurate, and comparable view of a company's ESG impacts, risks, and opportunities. This is not merely a regulatory requirement but a shift towards embedding sustainability into the core of business reporting, reflecting the European Union's commitment to a sustainable economic future.

By demanding detailed disclosure, the ESRS propel companies in Europe and beyond to reassess their sustainability practices and align them with global best practices, setting a new benchmark for corporate accountability and transparency and fostering a more informed and sustainable marketplace for all stakeholders.

Your guide to reporting under the ESRS 

The transition to ESRS reporting under the CSRD presents both a challenge and an opportunity for companies. By adopting a proactive approach to understanding and implementing the ESRS requirements, companies can ensure compliance and strengthen their sustainability practices, enhance their corporate transparency, and contribute positively to the global sustainability agenda.

For successful reporting under the ESRS, companies must engage in early preparation and strategic planning. This process entails a comprehensive familiarisation with the extensive scope of the ESRS, identifying any gaps in existing data and reporting processes, and planning to determine the necessary information and workflows for compliant reporting. Early and efficient planning is crucial for companies to align with the ESRS's strict requirements and to leverage this opportunity to meet regulatory demands and demonstrate leadership in sustainability. 

This guide supports companies in preparing for ESRS reporting by providing an overview of the standards and outlining practical steps your company can take with Plan A for compliance. By following the outlined steps, companies can ensure they meet all reporting obligations under the CSRD. 

What are the European Sustainability Reporting Standards (ESRS)?

The ESRS was developed by the European Financial Advisory Group (EFRAG) and adopted as a delegated act by the European Commission on July 31, 2023. The development of the ESRS is based on two elements: 

  1. Consistency with existing reporting recommendations and standards 
  • To guarantee a high level of interoperability between the ESRS and other international standards, the ESRS reporting requirements are aligned with the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD) and the standard of the Global Reporting Initiative (GRI). EFRAG also works closely with the International Sustainability Standards Board (ISSB) to ensure interoperability with the IFRS Sustainability Disclosure standards. 
  1. Alignment with legal EU frameworks 

The ESRS and double materiality assessment 

The ESRS take a “double materiality” perspective, meaning the standards oblige companies to report their impacts on people and the environment and how social and environmental issues create financial risks and opportunities for the company.

A double materiality assessment helps to identify which sustainability topics and ESRS are most relevant (material) to an organisation and its stakeholders.

  • A sustainability topic meets the criteria of double materiality if it is material from an impact perspective and/or from a financial perspective:
  • Impact materiality entails how a business' activities impact society and the environment ('inside out' perspective).
  • Financial materiality considers how a business is affected by sustainability issues ('outside-in’ perspective).

All standards within the ESRS, except ESRS 2 ‘General disclosures’, are subject to a materiality assessment.

Understand the ESRS framework for CSRD compliance

ESRS framework for CSRD compliance.

The European Sustainability Reporting Standards (ESRS) serve as the foundation for CSRD compliance, presenting a structured approach for companies to communicate their sustainability initiatives and impacts. Simplifying the ESRS into more digestible terms is vital for better understanding and application.

At their core, the ESRS are divided into two primary categories:

1. Mandatory cross-cutting standards

These standards are integral to all organisations aiming for CSRD readiness. There are two standards in this group:

   - ESRS 1 clarifies the foundational requirements for CSRD compliance, ensuring companies align with the essential standards of sustainable reporting.

   - ESRS 2 expands on this by detailing overarching disclosure requirements that are universally applicable, regardless of the specific sustainability subject matter.

This standard (ESRS 2) delves into three pivotal areas:

  • Governance: Outlining how sustainability is integrated into the corporate governance framework.
  •  Strategy: Clarifying the role sustainability plays in the company's long-term planning and decision-making processes.
  • Impact, risk, and opportunity management: Providing a blueprint for companies to report on how they manage and respond to sustainability-related impacts, risks, and opportunities, as well as how these factors integrate into their overall risk management.    

These cross-cutting standards act as a compass, guiding organisations on how to structure their disclosures to ensure clarity, relevance, and consistency.

2. Topical standards

Beyond the foundational requirements, the ESRS offer ten non-mandatory topical standards. These are specialised frameworks that delve into the specifics of Environmental, Social, and Governance (ESG) topics. They are tailored to facilitate topic-specific disclosures, providing a more detailed lens through which companies can evaluate and report their sustainability performance. While not mandatory, these topical standards are critical for organisations to comprehensively disclose their sustainability practices and impacts in specific ESG areas.

3. Sector-specific standards

Recognising the diverse nature of industries, the ESRS will evolve to include sector-specific standards. These are anticipated to be finalised and adopted by the European Commission by June 2026. These standards aim to address the unique sustainability aspects and reporting needs inherent to different sectors, ensuring that reporting is as relevant and insightful as possible.

In essence, the ESRS is designed to provide a clear and comprehensive framework for sustainability reporting. They are not just a checklist but a transformational approach to integrating sustainability into the very fabric of corporate strategy and communication. This systematic categorisation and the impending sector-specific standards underscore the EU's commitment to tailored, transparent, and transformative sustainability reporting.

Prepare for the ESRS with 5 simple steps 

Does your company meet the threshold requirements of CSRD? Get ahead now with Plan A to prepare for reporting under the ESRS. 

Embarking on the path to sustainability reporting under the new European Sustainability Reporting Standards (ESRS) can seem challenging. However, with the right guidance and strategic planning, your company can transition smoothly and efficiently. Here's how Plan A can ease your journey to compliance in five simple steps:

  1. Understand the ESRS and their requirements 
  • Before beginning the CSRD reporting journey, explore Plan A's CSRD webpage, and consult our subject matter experts to understand the upcoming reporting standards and how they influence your business. 
  1. Determine material ESRS topics (Double Materiality Assessment)
  • Understand the scope of the ESRS reporting areas and how they impact your business from a financial and impact perspective. 
  • Familiarise yourself with the double materiality assessment process and plan this with an external partner to determine which ESRS topics are relevant to report on.
  1. Assess the status quo of your data collection and identify gaps
  • Undergo an in-depth analysis of the ESRS and map your existing sustainability reporting disclosures against both mandatory and material ESRS with the help of Plan A subject matter experts. 
  • Use Plan A services to assess the quality of your company’s existing data, review your company's existing data collection and reporting procedures, and define what data is missing for ESRS compliance. 
  1. Set a strategy and plan the data collection journey
  • Review maturity and gaps in your company’s data collection processes with guidance from Plan A’s subject matter experts to see what existing processes you can build on and where you need to adjust.
  • Understand the distribution of roles and responsibilities, knowledge and capacity to enable data collection for CSRD reporting.
  1. Prepare for third-party auditing and assurance 
  • Proactively address potential issues with Plan A's network of verified assurance partners, smoothing the path for the forthcoming third-party auditing and assurance process. 

Are you ready to comply with the CSRD? Plan A is here to support your readiness. Don't wait until the last minute to prepare. Book a demo today and take the first step towards seamless CSRD compliance.

Check out more Regulations

Our sustainability experts

Let's work together to decarbonise your business.

Our sustainability experts will find the right solution for you.
Schedule a call