ESRS

What it means

ESRS, the European Sustainability Reporting Standards, are the standards under which companies subject to CSRD prepare their sustainability statement. Adopted by the European Commission, they set exactly what is reported on environmental, social and governance matters, ESG, and in what structure.

They divide into cross-cutting standards, covering general principles and mandatory disclosures, and topical ones: environment, including climate and emissions, own workforce, workers in the value chain, affected communities, consumers and business conduct. After the Omnibus simplification the number of mandatory data points fell considerably.

Which topical standards a company reports follows from its double materiality assessment. Only the general disclosures are mandatory; the rest are reported if material, and the company must be able to explain why it left something out.

How it works in practice

The ESRS statement forms part of the annual report and is subject to assurance by an auditor or another independent assurance provider. It is filed in an electronic format with tagged data, much like the financial statements of listed companies.

The obligation mainly concerns large accounting entities, whose number has fallen after the deadlines were postponed and thresholds changed. For clients we therefore first check whether and from when the obligation arises, and if not, we recommend the proportionate VSME standard for bank and customer questionnaires.

Much of the data comes from accounting and HR: energy consumption, headcount, turnover, pay, accidents or the share of revenue aligned with the EU taxonomy. We prepare it so that it is consistent with the financial statements and can be verified.

What to watch out for

A sustainability statement is not a marketing document. Its data is subject to assurance, and untrue or unsupported claims can have consequences similar to an error in the accounts, so every figure needs a source and a method.

The rules have changed repeatedly in recent years, with deadlines postponed and scope narrowed. Preparing against an outdated version of the standards can be wasted effort, so before each next step we check the current text and its transposition into the Accounting Act.