What Do the ESRS Mean for Companies?

Wouter Lox:
The European Sustainability Reporting Standards (ESRS) are the official sustainability reporting standards that companies must follow under the Corporate Sustainability Reporting Directive (CSRD).

Wouter, What Exactly Are the ESRS?

Wouter Lox:
The European Sustainability Reporting Standards (ESRS) provide a clear and standardized framework for companies to report on their sustainability performance. They ensure that companies can transparently communicate their impact on people, the environment, and society.
Developed by EFRAG (European Financial Reporting Advisory Group), the ESRS help businesses align their sustainability strategy with their reporting obligations under the CSRD.

What Is the Purpose of the ESRS?

Wouter Lox:
The ESRS aim to ensure that companies report on sustainability in a consistent and comparable manner. This helps investors, policymakers, and other stakeholders make better-informed decisions and prevents greenwashing.
The standards emphasize double materiality, meaning companies must report on:

• Financial materiality → How sustainability factors impact their financial performance.

• Impact materiality → How their operations affect the environment and society.

What Topics Do the ESRS Cover?

Wouter Lox:
The ESRS are structured into different categories:

• General Standards (ESRS 1 & 2):

  • Fundamental principles and reporting requirements.

  • Application of double materiality and stakeholder engagement.

• Environmental Standards (E-series):

  • Climate change, pollution, water management, biodiversity, and circular economy.

• Social Standards (S-series):

  • Own workforce, workers in the value chain, local communities, consumers, and end users.

• Governance Standards (G-series):

  • Corporate governance, corruption, and payment practices.

When Do Companies Need to Comply with the ESRS?

Wouter Lox:
Large non-listed companies that meet the CSRD criteria must report from the 2025 financial year, with the first sustainability reports expected in 2026.

Why Are the ESRS Important for Companies?

Wouter Lox:
The ESRS are not just a legal requirement—they offer companies a strategic advantage. Transparent ESG performance can lead to:

• Stronger reputation through accountability.

• Easier access to financing, as investors prioritize ESG-compliant businesses.

• Competitive advantage in a market that increasingly values sustainability.

Where Can Companies Find More Information About the ESRS?

Wouter Lox:
More information about the ESRS is available on the EFRAG website, the organization responsible for developing the standards.
At Sustinera, we provide tailored guidance to help businesses meet their reporting obligations and integrate sustainability into their strategy.