🌍 CSRD & ESRS E1: Your Guide to Climate Change Reporting Under EU Law 🌱

As the push for transparency in corporate sustainability accelerates, the Corporate Sustainability Reporting Directive (CSRD) is transforming how companies report their environmental, social, and governance (ESG) impact — especially on climate change. Let’s break down the key elements, focusing on the critical ESRS E1 standard for climate change.

What is CSRD? 📜

• A European directive effective January 2024.
• Requires large companies to publish annual non-financial reports on ESG performance.
• Aims to harmonize sustainability reporting across the EU.
• Replaces & expands the earlier Non-Financial Reporting Directive (NFRD).
• Applies to companies meeting thresholds on employees, revenue, and assets, including some SMEs and non-European firms with EU subsidiaries.

Why ESRS? The Backbone of CSRD 📊

• The European Sustainability Reporting Standards (ESRS) specify detailed reporting requirements.
• There are 12 ESRS standards covering different ESG topics.
• ESRS E1 focuses exclusively on climate change — arguably the most demanding and comprehensive standard.

What is ESRS E1? 🌡️

• Requires disclosure of ~220 data points covering:
• Most companies must comply unless they prove climate change is not material to their business.
• Designed to increase transparency, accountability, and comparability of climate-related data.

ESRS E1: 9 Key Disclosure Requirements (DRs) 📋

1. Transition plan aligned with limiting warming to 1.5°C.
2. Policies on climate mitigation & adaptation.
3. Actions and resources dedicated to climate policies.
4. Clear reduction targets for scopes 1, 2, and 3 emissions.
5. Energy consumption and energy mix details.
6. GHG emissions reporting (Scopes 1, 2, 3).
7. GHG removals & mitigation projects (carbon credits).
8. Disclosure of internal carbon pricing mechanisms.
9. Anticipated financial effects from climate risks and opportunities.

Why is ESRS E1 so critical? 🚀

• Enables stakeholders to compare climate strategies effectively.
• Supports alignment with the Paris Agreement and EU climate goals.
• Enhances corporate climate risk management.
• Boosts investor confidence with decision-useful climate data.
• Drives companies to embed climate action into governance and strategy.

Preparing for ESRS E1 Reporting — Start Now! ⏳

• Understand the 9 DRs and their requirements.
• Conduct a double materiality assessment: financial + sustainability impact.
• Collect and analyze data for scopes 1, 2, and 3 emissions.
• Set science-based reduction targets aligned with 1.5°C.
• Develop a comprehensive climate transition plan with clear milestones.
• Integrate climate risks/opportunities into corporate governance and decision-making.

Ready to lead on climate transparency? 🌟

Implementing CSRD and ESRS E1 standards will be a game-changer for corporate sustainability reporting — positioning your company for regulatory compliance and long-term resilience.

Are you gearing up for CSRD compliance? Share your thoughts or questions below! 👇

𝐄𝐦𝐚𝐢𝐥: sachin.sharma@sgs.com or

𝐌𝐞𝐬𝐬𝐚𝐠𝐞: Sachin Sharma

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