European Sustainability Reporting Standards Framework

In the European Union, companies must comply with the Corporate Sustainability Report Directive and report on sustainability in accordance with the European Sustainability Reporting Standards (ESRS) and its data points (DPs).

Developed by EFRAG and published in May 2024, the objective of ESRS is to provide investors with information to understand the sustainability impact of their investee companies.

EFRAG maintains a platform to respond to stakeholder questions about ESRS. These responses are known as explanations and EFRAG release explanations on a regular basis. For example, in December 2024, EFRAG released explanations for ESRS E1 Climate Change and ESRS E4 Biodiversity and ecosystems. For more information about the platform, see ESRS Q&A platform.

ESRS draws on other regulations like SFDR and Pillar 3 as well as other voluntary frameworks, such as International Sustainability Standards Board (ISSB) and the Global Reporting Initiative (GRI), which helps ensure a high degree of interoperability between EU and global standards to prevent unnecessary double reporting by companies.

For more information about the standards, the broader CSRD legislation, and support for ESRS in IBM® ESG Suite, see the What is the Corporate Sustainability Report Directive (CSRD)? pages on the IBM website.

ESRS standards

ESRS covers a comprehensive range of environmental, social, and governance (ESG) issues, including climate change, biodiversity, and human rights. The framework consists of 2 cross-cutting standards and 12 topical standards (see Figure 1).

ESRS includes:

Cross-cutting standards

Defines the general disclosures and requirements that apply across all topics, regardless of which topics are material. Cross-cutting standards are mandatory.

ESRS 1 - General requirements

Establishes the foundational principles and requirements that companies must adhere to when preparing their sustainability reports. The standard explains conventions for drafting responses, key terms, and general prerequisites for creating and presenting sustainability-related information.

ESRS 1 requires companies to explain their materiality assessment process, including the methodologies, assumptions, and results.

ESRS 1 provides several miscellaneous reporting requirements such as the level of detail to provide, the currency and units of measure to use, and the time horizons to use in targets.

ESRS 2 - General disclosures

Sets out disclosure requirements that organizations must follow at a general level across all material sustainability topics. All disclosures requirements in this standard are mandatory for organizations, regardless of the outcome of their materiality assessment.

Topical standards

Includes requirements under the environmental, social, and governance topics. An organization can choose to disclosure information that is relevant to their business operations.

If an organization deems that a topic not to be material during the materiality assessment, the organization does not need to disclosure information for that topic.

Today, both cross-cutting and topical standards in ESRS are sector agnostic. The standards apply to all entities regardless of the sector in which they operate. Sector-specific standards are being developed.

Table 1 describes the Environmental standards.

Table 1. Topical standards - Environmental

Standard number	Topic	Sub-topic	Sub-sub-topic
ESRS E1	Climate Change	Climate change adaption Climate change mitigation Energy	N/A
ESRS E2	Pollution	Pollution of air Pollution of water Pollution of soil Pollution of living organisms and food resources Substances of concern Substance of very high concern Micro plastics	N/A
ESRS E3	Water and marine resources	Water Marine resources	Water consumption Water withdrawls Water discharges Water discharges in the oceans Extraction and use of marine resources
ESRS E4	Biodiversity and ecosystems	Direct impact drivers of biodiversity loss	Climate change Land-use change, fresh water-use change, and sea-use change Direct exploitation Invasive alien species Pollution Others
		Impacts on the state of specifies	Examples: Species pollution size Species global extinction risk
		Impacts on the extent and condition of ecosystems	Examples: Land degradation Desertification Soil sealing
		Impacts and dependencies on ecosystem services	N/A
ESRS E5	Circular economy	Resource inflows, including resource use Resource outflows related to products and services Waste	N/A

Table 2 describes the social standards.

Table 2. Topical standards - Social

Standard number	Topic	Sub-topics	Sub-sub-topic
ESRS S1	Own workforce	Working conditions	Secure employment Adequate wages Social dialogue Freedom of association, the existence of works councils and the information, consultation, and participation rights of workers Collective bargaining, including rate of workers covered by collective agreements Work-life balance Heath and safety
		Equal treatment and opportunities for all	Gender equality and equal pay for work of equal value Training and skills development Employment and inclusion of persons with disabilities Measures against violence and harassment in the workplace Diversity
		Other work-related rights	Child labour Forced labour Adequate housing Privacy
ESRS S2	Workers in the value chain	Working conditions	Secure employment Working time Adequate wages Social dialogue Freedom of association, including the existence of work councils Collective bargaining Work-llife balance Health and safety
		Equal treatment and opportunities for all	Gender equality and equal pay for work of equal value Training and skills development The employment and inclusion of persons with disabilities Measures against violence and harassment in the workplace Diversity
		Other work-related rights	Child labour Forced labour Adequate housing Water and sanitation Privacy
ESRS S3	Affected communities,	Communities' economic, social, and cultural right	Adequate housing Adequate food Water and sanitation Land-related impacts Security-related impacts
		Communities' civil and political rights	Freedom of expression Freedom of assembly Impacts on human rights defenders
		Rights of indigenous people	Free, prior and informed consent Freedom of assembly Impacts on human rights defenders
ESRS S4	Consumers and end-users	Information-related impacts for consumers or end-users or both	Privacy Freedom of expression Access to (quality) information
		Personal safety of consumers or end-users or both	Health and safety Security of a person Protection of children
		Social inclusion of consumers or end-users or both	Non-discrimination Access to products and services Responsible marketing practices

Table 3 describes the governance standards.

Table 3. Topical standards - Governance

Standard number	Topic	Sub-topics	Sub-sub-topic
ESRS G1	Business conduct	Corporate culture Protection of whistle-blowers Animal welfare Political engagement and lobbying activities. Corruption and bribery.	N/A
		Corruption and bribery	Prevention and detection including training Incidents