ESRS (European Sustainability Reporting Standards)
ESRS are the detailed reporting standards developed by EFRAG that specify what companies must disclose under the EU's CSRD. They cover ten sustainability topics across environmental, social, and governance dimensions, with ESRS E1 (Climate Change) requiring detailed emissions data, transition plans, and climate risk assessments.
ESRS comprises 12 standards: two cross-cutting (ESRS 1 General Requirements, ESRS 2 General Disclosures) and ten topical standards. Environmental standards include E1 (Climate Change), E2 (Pollution), E3 (Water and Marine Resources), E4 (Biodiversity), and E5 (Circular Economy). Social standards cover S1 (Own Workforce), S2 (Workers in the Value Chain), S3 (Affected Communities), and S4 (Consumers and End-Users). G1 covers Business Conduct.
ESRS E1 is the most data-intensive standard for most companies. It requires: Scope 1, 2, and 3 GHG emissions broken down by significant categories; energy consumption and mix; GHG intensity ratios; transition plans with targets, actions, and investment needs; financial effects of climate risks and opportunities; and internal carbon pricing details.
A key feature of ESRS is the double materiality assessment: companies must evaluate each topic for both impact materiality and financial materiality. Only topics assessed as material require full disclosure, but ESRS E1 climate disclosures are mandatory for virtually all covered companies.
The standards also require connectivity between sustainability and financial reporting, forward-looking information about transition plans, and quantitative targets with progress tracking.
Frequently asked questions
What is ESRS? +
ESRS (European Sustainability Reporting Standards) are the detailed standards companies must follow when reporting under the EU's CSRD. Developed by EFRAG, they cover 10 topics across environmental, social, and governance dimensions.
What does ESRS E1 require? +
ESRS E1 (Climate Change) requires Scope 1, 2, and 3 emissions data, energy consumption breakdowns, GHG intensity ratios, transition plans with targets, financial effects of climate risks, and internal carbon pricing disclosures. It is mandatory for virtually all CSRD-covered companies.
Related terms
CSRD (Corporate Sustainability Reporting Directive)
The Corporate Sustainability Reporting Directive (CSRD) is the European Union's mandatory sustainability reporting law. It requires companies operating in the EU above certain thresholds to disclose environmental, social, and governance (ESG) information according to the European Sustainability Reporting Standards (ESRS), with third-party assurance.
Double Materiality
Double materiality is the assessment framework required by the EU's CSRD that evaluates sustainability topics from two perspectives: impact materiality (how the company affects society and the environment) and financial materiality (how sustainability issues affect the company's financial performance, position, and cash flows).
Carbon Accounting
Carbon accounting is the systematic process of measuring, recording, and reporting the greenhouse gas (GHG) emissions produced by an organization, product, or activity. It follows standardized methodologies — most commonly the GHG Protocol — to quantify emissions across Scope 1 (direct), Scope 2 (purchased energy), and Scope 3 (value chain) categories, producing an auditable inventory that underpins disclosure, reduction planning, and regulatory compliance.
Scope 3 Emissions
Scope 3 emissions are all indirect greenhouse gas emissions that occur in an organization's value chain — both upstream (suppliers, purchased goods, business travel, employee commuting) and downstream (product use, end-of-life treatment, investments). Scope 3 typically represents 70–90% of a company's total carbon footprint.