CSRD - Our guide (2/2)

june 2022
10 min read

The Greenscope team is pleased to share its detailed description of the ESRS standards of the draft CSRD delegated act. To find out more about the CSRD, we invite you to read our article on the subject.

ESRS Agnostic standards

  • ESRS1: general requirements
  • ESRS2: general information

3 thematic standards :


  • ESRS E1: climate change
  • ESRS E2: pollution
  • ESRS E3: water and marine resources
  • ESRS E4: biodiversity and ecosystems
  • ESRS E5: resource use and circular economy


  • ESRS S1: clean workforce
  • ESRS S2: value chain workers
  • ESRS S3: affected communities
  • ESRS S4: consumers and end-users


-         ESRS G1: business conduct

ESRS 1 - General requirements

The aim is to set out the general requirements that companies must meet when preparing and providing sustainability information under the Accounting Directive.

"How to report" under ESRS:

  1. Categories of standards and disclosures under the European Sustainability Reporting Standards (ESRS)
  2. Qualitative characteristics of information
  3. Double materiality as a basis for sustainability reporting
  4. Sustainabilitydue diligence
  5. Value chain
  6. Timehorizon
  7. Preparation and presentation of sustainability information
  8. Structure of sustainability statements
  9. Links with other parts of sustainability statements
  10. Transitional provisions

The appendices contain :

  1. Defined terms
  2. Application requirements: double materiality, assessment using sector averages andindicators, content and structure of sustainability statements
  3. Qualitative characteristics of information
  4. List of phased-in disclosure requirements
  5. Structure of ESRS sustainability statements
  6. Flow chart for determining the information to be included
  7. Example of ESRS sustainability statement structure
  8. Example of incorporation by reference

ESRS 1 reminds us that the only mandatory information to be provided in their reports is that required by the following ESRSs :

  • ESRS 2, general information (except for an explanation of why the company has chosen not toinclude certain non-mandatory ESRS standards in its report).
  • EU legislation benchmarks (SFDR, green taxonomy, etc.)
  • ESRS E1, climate change
  • ESRS S1, own workforcefor companies with 250 or more employees (except indicators concerning"non-employees" within the workforce according to the latest draft)

The information on the reporting company provided insustainability statements is extended to include information on materialimpacts, risks and opportunities linked to the company through its direct and indirect business relationships in the upstream and/or downstream value chain. These impacts include those caused by or contributed to by the company, as wellas those directly linked to the company's activities, products or servicesthrough its business relationships.

ESRS 2 - General information

The report follows a 4-pillar approach aligned with international sustainability reporting frameworks:

  • Governance
  • Strategy
  • Impact, risk and opportunity management
  • Measurementsand targets

1. Corporate governance

  • GOV-1: Role of administrative, management and supervisory bodies
  • GOV-2: Information provided to the company's administrative, management and supervisory bodies, and sustainability issues addressed by them
  • GOV-3: Integration of sustainability-related incentive systems
  • GOV-4: Sustainability due diligence statement
  • GOV-5: Risk management and internal controls relating to sustainability reporting

2. Strategy

  • SBM-1: market position, strategy, business model(s)and value chain
  • SBM-2: stake holder interests and views
  • SBM-3: significant impacts, risks and opportunities and their interaction with the company's strategy and business model.

3. Impact, risk and opportunity management (IRO)

  • IRO-1: description of processes for identifying significant sustainability impacts, risks and opportunities
  • IRO-2: ESRS disclosure requirements covered by corporate sustainability statements
  • DC-P 

4. Measures and targets

If the company cannot provide information onpolicies/actions/objectives because it has not adopted them, it indicates thisand can provide a timetable for the adoption of these policies/actions/objectives.

ESRS 2 - Appendices :

  1. Glossary
  2. Application requirements
  3. List of reference points in European legislation (SFDR, Pillar 3, European climatelaw, etc.)
  4. Disclosure/applicationrequirements in thematic ESRSs to be applied with ESRS 2
  5. Disclosureof ESRS data points in accordance with EU legislation and chapter 3 of ESRS 1

ESRS E1 - Climate change

·  General information :

  • Integrating sustainable development performance into incentive schemes
  • Transition plan for climate change mitigation:

Ø  Compatibility of GHG emission reduction targets withlimiting global warming to 1.5°C

Ø  Identification of decarbonization levers and planningof key actions

Ø  Investments and financing to support implementation

Ø  Potentially blocked GHG emissions from key assets andproducts

Ø  Objective of aligning its economic activities with theEU taxonomy

Ø  Exclusion or not of EU benchmarks aligned with Paris

Ø  Alignment with overall corporate strategy andfinancial planning

Ø  Implementation progress

  • Significant impacts, risks and opportunities and their interaction with strategy and business model(s)
  • Description of processes for identifying and assessing material climate-related impacts, risks and opportunities

· Impact, risk and opportunity management :

  • Climate change mitigation and adaptation policies
  • Actions and resources related to climate change policies

·  Measures and objectives :

  • Mitigation and adaptation targets
  • Energy consumption and mix (including intensity by sales)
  • Gross GHG emissions from scopes 1, 2 and 3 and total GHG emissions (including intensity per sales
  • GHG elimination and mitigation projects financed by carbon credits
  • Internal carbon pricing
  • Potential financial impact of physical and transitional risks and potential climate-related opportunities

ESRS E2 - Pollution

· Impact, risk and opportunity management

Process for identifying significant IROs (impacts, risks and dependencies):

  • Materials : air, water and soil pollution and substances of concern
  • Result of pollution materiality assessment: list of sites, list of business activities.
  • To be considered: LEAP approach to location, assessment, evaluation, preparation.
  • Value chain and life-cycle analysis
  • Physical and transitional risks, opportunities

Policies, actions and resources : whether and how to adopt the hierarchy of mitigation measures :

  • Avoid pollution, incidents and emergencies, phase out substances of very high concern, especially for non-essential uses.
  • Reduce pollution, minimize and replace substances of concern.
  • Mitigate negative effects, restore, regenerate and transform ecosystems.

· Measures and objectives

Objectives adopted or not and how, linked to materialmeasures, ecological thresholds.

Parameters :

  • Air, water and soil pollution : emissions of air pollutants, emissions to water, emissions of inorganic pollutants, emissions of ozone-depleting substances, microplastics generated or used.
  • SoC and SVHC
  • Potential financial effects

Quantitative unless impracticable, share of SoC/SVHC revenues, CapEx/OpEx related to incidents and deposits, environmental provisions.

ESRS E3 - Water and marine resources

Process for identifying material IROs :

  • Material: water and marine resources (including rare species), including sea use change, resource depletion, etc.
  • Assessment output: list of geographical areas, list of marine resources, list of sectors or segments.
  • To be considered: LEAP approach: location, valuation, value chain and life cycle assessment, physical and transition risks, opportunities.

Policies, actions and resources :

If and how adopted around mitigation hierarchy:

  • Avoiding the use of water and marine resources, product and service design
  • Reduce consumption of water and marine resources,
  • Restore, regenerate and transform marine ecosystems and basins.
  • Link with areas at risk of water stress and high water stress
  • Sustainable practices for oceans and seas

Targets adopted or not and modalities of adoption, linked to material measures, ecological thresholds

Indicators :

  • Water consumption (contextual information on watershed water quality and quantity,methodologies and assumptions): water consumption, water consumption intensity(on sales), total water consumption in areas with material water risk, total amount of water recycled and reused, total amount of water stored and storage evolution.
  • Potential financial impact: quantitative, unless practically impossible, single amount or range.

ESRS E4 - Biodiversity and ecosystems

· General information

  • Material impacts, risks and opportunities and their interaction with strategy and business model(s)
  • Description of processes for identifying and assessing material impacts, risks and opportunities related to biodiversity and ecosystems

· Impact, risk and opportunity management

Biodiversity and ecosystem policies, actions and resources related to biodiversity and ecosystems.

·  Measures and objectives

  • Biodiversity and ecosystem objectives
  • Impact measures relating to biodiversity and ecosystem change
  • Potential financial effects of biodiversity and ecosystem impacts, risks and opportunities

ESRS E5 - Resource use and circular economy

· Impact, risk and opportunity management

Process for identifying material IROs :

  • Issues: contribution to direct impact factors, dependencies on ecosystem services
  • Result of the assessment, including along the value chain : list of business units, list and prioritization of material resources, IROs of (non) transition to a circular business model.
  • To be considered: LEAP (locate, assess, estimate) approach, value chain and lifecycle analysis, physical and transition risks, opportunities.

Policies, actions and resources:

Whether and how policies address:

  • Transition away from extraction of non-renewable virgin resources.
  • Ensuring and contributing to the regenerative production of renewable resources and the regeneration of ecosystems.

If and how an action and resources cover :

  • One of the layers of the waste hierarchy
  • More detailed circular economy strategies.

Consider collective actions.

·  Measures and targets

Targets adopted or not and how, linked to physical measures, ecological thresholds.

Indicators :

  • Resource flows: qualitative information for all + quantitative for priority sectors
  • Resource outputs: products and services (qualitative information for all + quantitative for priority sectors), waste (tons and breakdown, including by waste recovery and treatment operation).
  • Potential financial impact: quantitative, unless not possible, single amount or range.

ESRS S1 - Own workforce

· IRO management

  • Own staff policies
  • Process for engaging with own workers and their representatives regarding impacts
  • Processes to address negative impacts and channels for own workers to raise concerns
  • Measures taken regarding impacts on clean workers, effectiveness of these measures and approaches to mitigating material risks and seizing material opportunities related to clean workers

· Measures and objectives

Objectives for managing significant negative impacts, promoting positive impacts and managing significant risks and opportunities.

These measures are only mandatory for companies withmore than 250 employees, with regard to significant impacts, risks andopportunities.

· General information

  • Stakeholder interests and viewpoints
  • Significant impacts, risks and opportunities and their interaction with strategy and business model(s)

· Mandatory (250+ employees)

  • Characteristics of company employees (breakdown by gender, type of employment - in particular full-time or part-time - and location)
  • Characteristics of self-employed workers
  • Collective bargaining and social dialogue (e.g., percentage of employees, non-employees and self-employed participating in collective bargaining)
  • Diversity indicators (gender equality)

·  Mandatory explanation

  • Adequate salary
  • Social protection

· Subject to materiality assessment

  • People with disabilities
  • Training and skills development
  • Health and safety indicators
  • Work-life balance
  • Gender pay gap + CEO pay ratio
  • Human resources incidents and complaints


ESRS S2 (value chain workers) - ESRS S3 (affectedcommunities) - S4 (consumers and end users)

·  Strategy

  • Stakeholder interests and viewpoints
  • Material impacts, risks and opportunities and their interaction with strategy and business model
  • Implementation

·  Policies relating to the stakeholder group concerned

  • Processes for engaging with relevant stakeholder groups on impacts 
  • Procedures for remedying negative impacts and channels for raising concerns
  • Impact actions and their effectiveness, and approaches to mitigating material risks and seizing material opportunities
  • Objectives related to the management of significant negative impacts and the management of significant risks and opportunities

·  Performance measures

Focus on developing the information that can be expected from all entities falling within the scope of the Corporate Social Responsibility Directive (CSRD). These standards provide high-level information about a company's impacts on value chain workers, affected communities, consumers and end-users, as well as related risks and opportunities, when considered broadly across a company's operations and up and down the value chain.

Subsequent standards should expand on these standards by providing more detailed information on sub-themes and specific issues that would be identified as material through sector or entity-specific materiality determinations.

ESRS G1 - Business conduct

· IRO management

  • Description of how business conduct is encouraged and integrated into corporate culture
  • Description of how the business conduct culture is reflected in clearly defined policies, procedures and objectives.
  • Including prevention and detection of corruption (and related training)

· Measures and objectives

  • Measure of achievement of policies and objectives in previous DRs
  • Ongoing legal proceedings (number, inventory, penalties or fines paid)
  • Political contributions and lobbying activities
  • Contractual terms of payment practices

To find out more about CSRD, read our last article !

October 2022
6 min read