EFRAG finalized European Sustainability Reporting Standards (ESRS) guidance documents IG 1: Materiality Assessment Implementation Guidance (IG 1), IG 2: Value Chain Implementation Guidance (IG 2), and IG 3: List of ESRS Datapoints & explanatory note (IG 3). These documents were originally introduced in January 2024, undergoing consultation and feedback. A press release from EFRAG outlines the strategy behind the documents stating:
“By prioritising these documents, EFRAG aims to support undertakings and other stakeholders in the implementation of the ESRS, helping them to focus on the aspects of the standards that are more relevant to them and illustrating the reporting requirements with practical language and frequently asked questions… These documents provide essential guidance to ensure organisations effectively implement and comply with ESRS standards, promoting transparency and consistency in sustainability reporting.”
This is welcome news to those trying to wrap their heads around the Corporate Sustainability Reporting Directive (CSRD) and its requirements. IG 1 outlines the entire double materiality assessment process and includes examples of the interplay between financial and impact materiality. IG 2 fleshes out the CSRD’s value chain reporting requirements and explains key concepts like “operational control” which are used to establish a company’s reporting boundaries. IG 3 provides a detailed list of reporting requirements in the form of data points along with an explanatory note to aid companies in understanding these data points. As CSRD implementation deadlines draw closer, guidance documents like these will be imperative for companies seeking compliance with the massive ESG disclosure scheme.
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