European Sustainability Reporting Standards


The European Sustainability Reporting Standards (ESRS) are sustainability disclosure requirements for companies subject to the Corporate Sustainability Reporting Directive (CSRD).

The standards have been developed by the European Financial Reporting Advisory Group (EFRAG).

The CSRD is a directive, which means EU member states must transpose into national law.

The CSRD applies to companies that meet any two of the following criteria:

  • More than 250 employees,
  • Net turnover of more than Eur 50 million, and
  • Total assets of more than Eur 25 million.*

Overseas companies that are listed on an EU regulated market or have a subsidiary or branch in the EU that meets the size criteria for CSRD reporting will be subject to the CSRD.

The major difference between the ESRS and previous disclosure requirements (for example, the EU Non-Financial Reporting Directive, SEC disclosures, such as 10-K filings, or the reporting requirements of the UK Companies Act) is that the ESRS require double materiality reporting.

This means that companies will need to report on the impacts of sustainability issues on their company as well as the impacts of their company on sustainability issues.

The following sector-agnostic (or ‘general’) sustainability standards have been developed by EFRAG:

  • Environmental: Climate change, Pollution, Water and marine resources, Biodiversity and ecoystems, Resource use and circular economy
  • Social: Own workforce, Workers in the value chain, Affected communities, Consumers and end-users
  • Governance: Business conduct.
* Changes proposed by the European Commission on turnover and assets are part of a delegated act that will enter into force if the European Parliament or the Council of the EU do not object to it. The scrutiny period lasts generally 2 months following the adoption of the act.


CSRD: The Corporate Sustainability Reporting Directive

This is the overarching policy requiring in scope companies to report on their sustainability performance.

EFRAG: European Financial Reporting Advisory Group

EFRAG is a private association established in 2001 with the encouragement of the European Commission to serve the public interest. Its Member Organisations are European stakeholders, National Organisations and Civil Society Organisations.

ESRS: The European Sustainability Reporting Standards

The European Sustainability Reporting Standards (ESRS) are a set of reporting standards that define the structure and disclosure requirements that in scope companies will need to report on.

The ESRS are divided into two main parts:

  • Sector-agnostic (or ‘general’) disclosures: These requirements apply to all companies that are subject to the CSRD.

  • Sector-specific disclosures: These disclosures are specific to certain industries or sectors. For example, there are specific disclosures for companies in the financial sector, the energy sector, and the manufacturing sector.

ISSB: The International Sustainability Standards Board

The International Sustainability Standards Board (ISSB) is an independent, private-sector body that develops and approves IFRS Sustainability Disclosure Standards (IFRS SDS).

The ISSB has published two sets of IFRS SDS to date:

  • IFRS S1 General Requirements

  • IFRS S2 Climate-related Disclosures

The 12 ‘general’ ESRS






General Requirements



General Disclosures









Water and marine resources



Biodiversity and ecosystems



Resource use and circular economy



Own workforce



Workers in the value chain



Affected communities



Consumers and end users



Business conduct

Key features

The ESRS introduce double materiality.

“Double materiality”, as defined by EFRAG, “has two dimensions: impact materiality (covering material information about the undertaking’s impacts on sustainability matters) and financial materiality (covering material information about risks and opportunities for the undertaking resulting from sustainability matters).”

The ESRS are subject to a materiality assessment, to be determined and disclosed by the company; including size and type of company, industry, sector, geography, likelihood of sustainability event, and time horizon of likely impact.

Disclosures must be in XBRL format. XBRL stands for eXtensible Business Reporting Language. It is a standard format for exchanging business data electronically. XBRL is used in a variety of contexts, including financial reporting, regulatory reporting, and sustainability reporting.

Disclosures are also subject to assurance.


  • Link here to the  Corporate Sustainability Reporting Directive.
  • Link here to the draft implementation guidance.

Alignment with other initiatives

The EU Taxonomy:

The EU Taxonomy is a classification system that establishes a list of environmentally sustainable economic activities.

The ESRS and the EU Taxonomy are linked in a number of ways. The ESRS will require companies to disclose information on their alignment with the EU Taxonomy. The EU Taxonomy has been used to develop some of the ESRS standards.

The International Sustainability Standards Board:

The ESRS and the International Sustainability Standards Board (ISSB) are both working to develop sustainability reporting standards.

However, there are some key differences between the two:

  • The ESRS are mandatory. The ISSB standards are voluntary (although a number of policymakers and regulators have committed to codify in legislation).

  • The ESRS are based on the double materiality principle. The ISSB standards are focused on financial materiality.

  • The ESRS cover a wider range of sustainability issues than the ISSB standards.

Despite these differences, the ESRS and the ISSB are working to ensure that their standards are aligned.

Sustainable Finance Disclosure  Regulation:

CSRD focuses on companies, whereas SFDR focuses on investors. However, the CSRD and SFDR are also linked in a number of ways.

For example, the CSRD will require companies to report on their alignment with the EU Taxonomy, which will provide financial institutions with the information they need to comply with the SFDR.


Sector-agnostic (or ‘general’) ESRS:

The sector-agnostic ESRS were  adopted by the European  Commission in July 2023.

In October 2023, the European People’s Party (EPP) proposed the European Commission “significantly reduce the complexity of sustainability reporting standards” (link here).

However, the proposal was rejected, paving the way for their final adoption.

As such, the first ESRS reporting will be for the financial year 2024, with reports published in 2025. This means that companies will need to start collecting data and preparing their reports for the 2024 financial year.

Sector-specific ESRS (and other changes):

Also in October, the European Commission proposed adjustments to the size of companies subject to reporting (to account for inflation) and a two-year delay to the adoption of certain sector-specific standards (link here).

The initial deadline for the adoption of a first set of sector specific standards was June 2024.

However, the EC has proposed to postpone the deadline by two years, to allow companies to focus on the implementation of the first set of ESRS adopted in July 2023 (link here).

The Commission said: “Postponing the adoption date [of sector-specific standards] by 2 years … will allow these companies to focus on the implementation of the first set of ESRS adopted on 31 July 2023, ensuring that EFRAG has time to develop sector specific ESRS that are efficient, and limit the reporting requirements to the minimum necessary.”

In the first half of 2024 EFRAG expects to finalise the Exposure Drafts – subject to consultation – of two draft ESRS for high impact sectors, respectively Oil and Gas, covering activities from upstream to downstream, and Mining, Quarrying and Coal (link here).

The information contained in this briefing is provided for general information purposes only.

The authors of this briefing have made every effort to ensure that the information contained herein is accurate and up-to-date.

However, the authors cannot guarantee the accuracy or completeness of the information, and accept no liability for any errors or omissions.

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