ESRS 1 - General requirements
ESRS 1 establishes the foundational principles and requirements that companies must adhere to when preparing their sustainability reports.
While this section does not mandate specific disclosures, it plays a crucial role in guiding companies by setting the general framework for their sustainability reporting as it defines how undertakings shall carry their materiality assessment, as well as other miscellaneous requirements for reporting.
Materiality assessment
To determine whether a specific disclosure in the environmental, social, and governance topical standards is mandatory, organizations must conduct a double materiality assessment. This process helps identify the most relevant and significant topics for disclosure. ESRS requires companies to explain their materiality assessment process, including the methodologies, assumptions, and results.
After completing the materiality assessment and identifying the most relevant topics for their business, organizations can create disclosures on SRM by selecting only the Topical Standards that align with their impacts and operations, focusing on those identified as material to their company.
| Group | Number | Topical standards | Application |
|---|---|---|---|
| Cross-cutting | ESRS 1 | General Requirements | Mandatory for all companies |
| ESRS 2 | General Disclosures | ||
| Environment | ESRS E1 | Climate Change | Mandatory only if deemed as material to the company. |
| ESRS E2 | Pollution | ||
| ESRS E3 | Water and marine resources | ||
| ESRS E4 | Biodiversity and ecosystems | ||
| ESRS E5 | Resource use and circular economy | ||
| Social | ESRS S1 | Own workforce | |
| ESRS S2 | Workers in the value chain | ||
| ESRS S3 | Affected communities | ||
| ESRS S4 | Consumers and end users | ||
| Governance | ESRS G1 | Business conduct |
Miscellaneous guidelines for reporting
At each Disclosure Requirement (DR) ESRS mandates a specific level of disaggregation for each data point (DP). However, for DPs or DRs that do not require a particular level of disaggregation, companies may choose to provide more detailed disclosures if they believe it will enhance the clarity of their impacts, risks, and opportunities. Depending on the purpose and context of the data, organizations may opt to disaggregate information by country, significant site, or asset
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Comparative Information: Companies must disclose comparative information in respect of the previous period for all quantitative metrics and monetary amounts disclosed in the current period. This means that if a company is reporting a quantitative metric for their FY25, they should also disclose the same metric for their FY24.
- When reporting development or progress towards a target, reporters shall present comparative information with respect to a base year.
- Short term: Some DR’s will require undertakings to report their metrics or targets on short-term horizon, which means the period adopted by the company as their reporting period in their financial statements.
- Medium term: Some DR’s will require undertakings to report their metrics or targets on medium-term horizon. This period spans between the end of the short-term period up to 5 years after the same.
- Long term: For DR”s requiring undertakings to report their metrics or targets on long-term horizon, this would be any period beyond 5 years after the end of the short-term horizon. However, companies are expected to provide additional breakdowns when impacts or actions are expected to last or occur in even longer periods.
- Currency: Companies must use the presentation currency of its financial statements.
- Units of measure: Undertaking’s shall make their disclosures in the units of measures required by each specific DR or DP. However, when a specific unit of measure is not defined within the appropriate DR or DP, in order to ensure clarity companies shall disclose the units of measures and avoid abbreviations. When a DR requires the use of an specific units of measure, this will be flagged within the specific question and field at SRM.