What are the ESRS?

• The ESRS are a set of sustainability reporting standards being developed by the European Financial Reporting Advisory Group (EFRAG) under the directive of the European Commission.
• They aim to provide a comprehensive framework for companies and other entities to report on their environmental, social, and governance (ESG) impacts, risks, and opportunities.

How will the ESRS work?

• The ESRS will consist of cross-cutting standards applicable to all sectors, as well as sector-specific standards tailored to different industries.
• They will cover a wide range of sustainability topics, including climate change, biodiversity, human rights, and corporate governance.
• The standards will specify disclosure requirements, metrics, and guidance for reporting entities to follow.
• Implementation of the ESRS will likely be phased in, starting with large public-interest companies.

What is the current status?

• EFRAG has been developing the ESRS since 2021, undergoing public consultations and revisions.
• The first set of draft standards was released in April 2022, covering general principles, strategy, governance, and sector-agnostic disclosures.
• Sector-specific standards for different industries are currently being developed.
• The final ESRS are expected to be adopted by the European Commission in 2023 and become applicable in the following years.

‍