European Sustainability Reporting Standards (ESRS) - The most important facts at a glance ‍

What is ESRS? Definition and its place within the CSRD

Since January 2024, the "European Sustainability Reporting Standards" (ESRS) have set the framework for sustainability reporting in Europe. They represent a forward-looking development in the field of non-financial reporting and a key standard of the Corporate Sustainability Reporting Directive (CSRD). Under the ESRS, companies must provide relevant, comparable, and reliable information about their sustainability-related impacts, risks, and opportunities. They include detailed, standardized disclosure requirements so that companies can report on environmental, social, and governance (ESG) topics.

ESRS Update 2026: What the CSRD Omnibus Changes

Since this article was originally published, the EU has fundamentally revised the CSRD and the ESRS as part of the so-called Omnibus procedure. On February 24, 2026, the EU Council and Parliament agreed on the final simplification of reporting obligations.

Going forward, only companies with more than 1,000 employees and net annual revenue of more than €450 million will be subject to reporting requirements. For subsidiaries of third-country companies, a threshold of €200 million applies. Companies from the first reporting wave that fall out of scope as a result will receive a transitional arrangement for fiscal years 2025 and 2026.

In parallel, EFRAG published revised drafts for twelve ESRS standards on July 31, 2025. Mandatory data points are being reduced by 57%, and the overall scope of the standards cut by more than 55%. The public consultation on this ended on September 29, 2025, and the final technical advice was submitted to the European Commission in December 2025. Companies should already take the revised standards into account in their current materiality assessment.

What Does ESRS Cover? The Two Cross-Cutting and Ten Topical Standards

The ESRS requirements act as an overarching framework for all affected company types and sizes. They consist of two cross-cutting standards (ESRS 1 and ESRS 2) and 10 topical standards covering the so-called Environmental, Social, and Governance topics (ESG).

• ESRS 1 ("General Requirements") sets out the general rules to be followed when reporting under the ESRS, but does not prescribe specific disclosures.
• ESRS 2 ("General Disclosures") describes fundamental information that must be published regardless of the specific sustainability topic in question. ESRS 2 is mandatory for all companies that fall within the scope of the CSRD.

All other standards, along with the individual disclosure requirements and data points they contain, depend on the outcome of the double materiality assessment. Here, both the inside-out perspective (impact materiality) and the outside-in perspective (financial materiality) must be taken into account. Both perspectives are fundamental to identifying the strategically relevant sustainability topics and the associated reporting obligations.

Key Elements of ESRS

• ESRS 2 is always mandatory
• Other reporting obligations depend on the outcome of the double materiality assessment
• The methods and criteria used to determine materiality must be disclosed in the report
• ESRS E1 and ESRS S1 typically form the basis for industrial companies
• If ESRS E1 is not reported on, a detailed justification must be provided

How Many ESRS Data Points Are There?

As part of the double materiality assessment, it is necessary to conduct a comprehensive review that covers not only the ten topical standards (ESRS E1–E5, S1–S4, and G1), but also additional topic areas. These topics are structured into overarching topics, sub-topics, and sub-sub-topics. An overview of these topics can be found here. As part of the double materiality assessment, companies must identify the material impacts, risks, and opportunities across these 91 topics in total.

Example: Impacts, Risks, and Opportunities for ESRS S1

To simplify data collection, the European Financial Reporting Advisory Group (EFRAG) published a list of data points on October 25, 2023, that maps the entirety of the reporting requirements set out in the delegated act. This Excel list contains 1,178 data points, categorized in detail by ESRS standard and by type, narrative, quantitative, or monetary. However, the EFRAG data points are not grouped by the ESRS topics used in the materiality assessment, which means the reporting requirements still need to be mapped separately.

Of the 1,178 data points listed in total, 265 are optional and can be reported on a voluntary basis. The list serves as a comprehensive catalog of all disclosure requirements, both for companies that already report ESG data and for those newly engaging with the ESRS. It helps companies structure their data collection and identify gaps in their reporting. By breaking down disclosure objectives into individual, adaptable data points, the ESRS standards make it easier to present sustainability data in a comparable and contextualized way.

Companies must therefore, after carrying out the double materiality assessment, map the relevant sub-topics and sub-sub-topics to the corresponding disclosure requirements as listed in EFRAG's Excel list.

What must be considered under ESRS? Materiality, disclosure, and assurance

With the implementation of the ESRS, three key factors come into focus that form the foundation for transparent and effective reporting under the ESRS:

1. Double materiality: Double materiality is the principle used to determine the scope of reporting and requires companies to consider both their negative and positive impacts on the environment and society, whether potential or actual. At the same time, they must take into account the influence of external factors on their own profitability. When determining which topics are material for a company, both financial materiality and environmental and social materiality are taken into consideration.
2. Disclosure and reporting content: Under the ESRS, ESRS 2 is always mandatory, including documentation of the double materiality assessment, and includes specific disclosure requirements: if ESRS E1 is deemed not material for a company, this must be documented. A detailed explanation is required, based on the results of the double materiality assessment and describing the analysis process in depth.‍
3. Mandatory assurance: Disclosures under the ESRS guidelines have already had to be assured by an external auditor since the introduction of the CSRD (limited assurance). The tightening to reasonable assurance originally planned for 2028 was removed as part of the EU Omnibus package; as things currently stand, limited assurance will remain the permanent standard. Member states also have the option of admitting a different auditor or an independent assurance provider, provided they are subject to comparable requirements as a statutory auditor.

How are Greenhouse Gas Emissions captured under ESRS E1?

Among the ESRS guidelines, ESRS E1 stands out in particular, as it is the first standard to define CO₂ reporting under the CSRD and align it with existing ISSB/GRI guidelines.

EFRAG's ESRS E1 standard covers various aspects, including:

• Capturing greenhouse gas emissions in accordance with the standard's requirements, broken down by Scope 1, 2, and 3
• Setting emission reduction targets and defining measures to adapt the business model in line with climate protection goals
• Analyzing the impact of climate-related risks and opportunities on the company, as well as the company's impact on the climate

ESRS E1 Requirements for Scope 1, Scope 2, and Scope 3

Scope 1: Direct Emissions

• Total Scope 1 greenhouse gas emissions in metric tons of CO₂ equivalent
• The percentage of Scope 1 greenhouse gas emissions covered under regulated emission trading schemes (ETS)

Scope 2: Indirect Emissions

• Location-based method: Total Scope 2 greenhouse gas emissions based on local factors, in metric tons of CO₂ equivalent
• Market-based method: Total Scope 2 greenhouse gas emissions based on specific factors, in metric tons of CO₂ equivalent

Scope 3: Value Chain Emissions

While the disclosures for Scope 1 and 2 are clear, the requirements for reporting Scope 3 emissions under the final standards are more complex. These emissions must be broken down into more detailed categories.

Capturing and reporting Scope 3 greenhouse gas emissions is a complex process that requires particular attention, since these emissions arise outside the company's direct control. They typically make up a substantial share of a company's overall carbon footprint and can pose risks to operations, products, and services. This challenge calls for careful handling and reporting to ensure a comprehensive overview of the company's environmental impact. Scope 3 emissions can be assessed in a standard-compliant way using database values as well. This means involving the supply chain is not necessary for an initial assessment, and only becomes mandatory in a second step, for steering emission reduction efforts.