The die is cast: the European Commission has published its final reporting standards – the ESRS – as a series of ‘delegated acts’. The ESRS stipulates exactly how companies should report on their sustainability strategy, policy and performance; something required by the CSRD, the Corporate Sustainability Reporting Directive.
Since the release of the first version by the European Financial Reporting Advisory Group (EFRAG) in November 2022, it has been subjected to several rounds of feedback and thorough consultation within the European Commission, Parliament and Council, leading to numerous adjustments to the text. Katelijne Norga, founder and climate solutionist at Pantarein, provides an interpretation of the latest adjustments to the reporting standards:
“The good news is the importance given to E1, the climate standard. That standard describes what data and information a company must publish about its climate impacts and policies, such as energy consumption and energy mix, scope 1, 2 and 3 greenhouse gas emissions, etc. Companies are also required to prepare a climate transition plan: an action plan to be climate neutral by 2050, with an intermediate target for 2030. In addition, they must also examine and document the ways in which they themselves are subject to climate change and the financial impact this may have.”
“The Commission indirectly obliges companies to always include this standard intheir reporting, which is a good thing, as the success of the Green Deal depends on the intensity with which companies address their climate impacts. Those who still want to omit the topic must explicitly demonstrate that climate change is non-material for their business. However, customers, banks and other stakeholders will look very critically at companies that indicate they have no climate impact at all or vice versa.”
“Here at Pantarein, we are also convinced that a mature sustainability strategy can only exist if a company respects planetary boundaries. And of course, when it comes to the climate crisis, there is not a second to lose. We have therefore been including topics such as climate mitigation, climate adaptation and carbon footprint as a foundation for our projects for many years,” Norga adds.
