On July 31, the European Commission adopted the European Sustainability Reporting Standards (ESRS). These standards will apply to both large EU and large non-EU companies with operations in the EU.
The standards include:
General requirements (including explaining double materiality, the value chain and how to prepare and present sustainability information)
General disclosures (including on governance, strategy, and impact, risk and opportunity management, and metrics and targets)
Specific environmental disclosures, covering climate change, pollution, water and marine resources, biodiversity and ecosystems, and resources and the circular economy
Specific social disclosures, covering a company’s own workforce, workers in the value chain, affected communities and customers and end-users
Specific disclosures on business conduct
Next steps: The standards will now be passed along to the European Parliament and Council for a two-month scrutiny period, with implementation set to begin for some companies in the financial year 2024.