Publications

Cross-cutting standards:
ESRS 1 General requirements
ESRS 2 General disclosures

Standards on environmental matters:
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

Standards on social matters:
ESRS S1 Own workforce
ESRS S2 Workers in the value chain
ESRS S3 Affected communities
ESRS S4 Consumers and end-users

Standards on governance matters:

IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information

Standards on environmental matters:
IFRS S2 Climate-related Disclosures

ESRS

Only companies that are obliged by the EU Accounting Directive (Directive 2013/34/EU) to report sustainability information, specifically:

• (a) Companies previously subject to the Non-Financial Reporting Directive (NFRD) (namely, large listed companies, large banks and large insurance companies), and (b) listed EU parent of large group companies, each, with more than 500 employees on average during the financial year;
• Other large companies^[1], including other listed EU parent of large group companies^[2];
• Listed small^[3] and medium^[4]-sized enterprises (“SMEs”), including non-EU listed SMEs; and
• Non-EU companies that generate over EUR 150 million per year in the EU and that have in the EU either a branch with a turnover exceeding EUR 40 million or a subsidiary that is a large company or a listed SME.

ISSB Standards

World-wide entities that are required or choose to prepare general purpose financial statements, regardless of their size, location, industry, or listing status

ESRS

In a dedicated section of a reporting entity’s management report, which is an integral element of general-purpose financial reporting.

ISSB Standards

As part of a reporting entity’s general-purpose financial reporting. To facilitate application in different jurisdictions, the ISSB Standards do not specify or require where in the financial reports such sustainability-related disclosures may be placed.

ESRS

In addition to users of general-purpose financial reporting, also include other users, such as a reporting entity’s business partners, trade unions and social partners, civil society and non-governmental organizations, governments, analysts and academics.

ISSB Standards

Only users of general-purpose financial reporting, namely a reporting entity’s existing and potential investors, lenders and other creditors.

ESRS

Binding and directly applicable in all EU member states.

ISSB Standards

Voluntary, unless any jurisdiction decides to make the ISSB Standards mandatory.

ESRS

“Double materiality”, i.e., ESRS oblige an in-scope company to report both on its impacts on people and the environment (“Impact Materiality”), and on how social and environmental issues create financial risks and opportunities for the company (“Financial Materiality”).

ISSB Standards

Only Financial Materiality.

ESRS

Governance: the governance processes, controls and procedures used to monitor, manage and oversee impacts, risks and opportunities.

Strategy: how the reporting company’s strategy and business model interact with its material impacts, risks and opportunities.

Impact, risk and opportunity management: the process(es) by which the company: (i) identifies impacts, risks and opportunities and assesses their materiality; and (ii) manages material sustainability matters through policies and actions.

Metrics and targets: the company’s performance, including targets it has set and progress towards meeting them.

ISSB Standards

Aligned with Taskforce on Climate-related Financial Disclosures (TCFD) architecture, namely:

• Governance
• Strategy
• Risk management
• Metrics and targets

ESRS

• Allowing companies to omit information if it is not relevant in their particular circumstances.
• Phasing-in certain reporting requirements.
• Making a limited number of reporting requirements voluntary instead of mandatory.
• Proportionate reporting regime for listed SMEs (for example, streamlined and less demanding standards, and postponed compliance date until financial year 2026, with the possibility of an additional two-year opt-out after that).
• Simpler, voluntary standards for use by non-listed SMEs.

ISSB Standards

• When identifying sustainability-related risks and opportunities, determining the scope of value chain, and disclosing anticipated financial effects of sustainability-related risks and opportunities, a reporting entity only needs to consider “reasonable and supportable information that is available to the entity at the reporting date without undue cost or effort”.
• Certain transition relief in the first year of reporting.

ESRS

Yes, an entity is required to disclose information about sustainability-related risks, opportunities and impact throughout its upstream and downstream value chain, which means that ESRS reporting entities may require ESG data from non-EU companies in their value chain, even if such companies themselves are not subject to ESRS reporting.

ISSB Standards

Yes, an entity is required to disclose information about sustainability-related risks and opportunities throughout its value chain, which means ISSB reporting entities may require ESG data from companies in their value chain, even if such companies themselves are not subject to ISSB reporting.

ESRS

Required to be assured by an independent third party.

ISSB Standards

Not required, but open to assurance, because the ISSB Standards consider possible challenges and complexities for assurance process.

ESRS

• In terms of Financial Materiality, ESRS took the approach of trying to integrate the ISSB Standards into ESRS. However, ESRS also provide additional information on Impact Materiality, which is relevant for users other than investors.
• ESRS align with the Sustainability Accounting Standards Board (SASB) Standards through the above interoperability with the ISSB Standards.
• TCFD is a useful foundation for ESRS, but ESRS additionally include topical standards other than climate-related information, and, due to the double materiality approach, ESRS additionally require information about impact and opportunity management.
• ESRS tried to ensure a high level of alignment with the Global Reporting Initiative (“GRI”), which also adopts a double materiality approach. However, ESRS cover more Financial Materiality topics than GRI.

ISSB Standards

• Companies are required to apply SASB Standards in identifying their industry-specific sustainability-related risks and opportunities.
• The ISSB Standards adopted the 4-pillar structure of TCFD as core reporting contents. IFRS S2 highly aligns with TCFD recommendations, with certain granular changes.
• Jurisdictions applying the ISSB Standards may refer to GRI to add additional Impact Materiality-related building blocks in order to meet broader multi-stakeholders’ needs.

ESRS

Companies are required to start reporting under ESRS according to the following timetable:

• Companies previously subject to NFRD and listed EU parent of large group companies – financial year 2024, with first sustainability statement published in 2025.
• Other large companies, including other listed EU parent of large group companies – financial year 2025, with first sustainability statement published in 2026.
• Listed SMEs, including non-EU listed SMEs – financial year 2026, with first sustainability statement published in 2027, with the possibility of an additional two-year opt-out thereafter.
• In-scope non-EU companies – financial year 2028, with first sustainability statement published in 2029.

ISSB Standards

Entities shall apply the ISSB Standards for annual reporting periods beginning on or after January 1, 2024, but earlier application is permitted.
For the first annual reporting period, non-climate disclosure, Scope 3 emission disclosure, and if conditions met, application of Greenhouse Gas Protocol are not required.