European Sustainability Reporting Standards (ESRS)

The European Sustainability Reporting Standards (ESRS) are the set of standards that implement the Corporate Sustainability Reporting Directive (CSRD) and specify what information a company must disclose about its environmental, social and governance (ESG) impacts, risks and opportunities. They were developed by EFRAG (the technical adviser to the European Commission) and adopted through Commission Delegated Regulation (EU) 2023/2772. Their aim is to make sustainability information comparable, reliable and useful for investors, regulators and other stakeholders.

This entry serves as a general guide to the ESRS. From here you can access each specific standard in the glossary.

How are the ESRS structured? The 12 standards in the first set

The first set of ESRS (ESRS Set 1) consists of 12 standards organised in three blocks:

Cross-cutting standards (2)

These apply to any company and all sustainability topics:

• ESRS 1 – General Requirements: sets out the architecture, fundamental concepts (including double materiality) and how information is prepared and presented. It contains no specific disclosures.
• ESRS 2 – General Disclosures: establishes mandatory general disclosures (governance, strategy, management of impacts, risks and opportunities, and metrics and targets). It is mandatory regardless of the outcome of the materiality assessment.

Environmental thematic standards (5)

• 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

Social thematic standards (4) and governance (1)

• ESRS S1 – Own Workforce
• ESRS S2 – Workers in the Value Chain
• ESRS S3 – Affected Communities
• ESRS S4 – Consumers and End-users
• ESRS G1 – Business Conduct

Except for ESRS 2, which is always mandatory, the thematic standards apply depending on the outcome of the double materiality assessment: companies only report in detail on topics that are material.

The role of double materiality

The ESRS are grounded in the principle of double materiality: a company must analyse both its impact on the environment (impact materiality) and how sustainability issues affect its financial position (financial materiality). This assessment determines the content of the report.

Which companies do the ESRS apply to?

The ESRS apply to companies required to report under the CSRD. Following Directive (EU) 2026/470 (Omnibus I), published in the Official Journal of the EU on 26 February 2026, the scope of application has been significantly reduced: in general, only companies exceeding 1,000 employees and €450 million in net turnover (both criteria) are required to report. Before this reform the threshold was much lower (from 250 employees). In addition, Directive (EU) 2025/794 (the "stop the clock" directive) delayed the entry of the second and third waves of CSRD companies by two years.

For SMEs not subject to the obligation, the Commission recommends the much simpler voluntary VSME standard when they wish to communicate sustainability information aligned with market expectations.

Revised ESRS: the ongoing simplification (2026–2027)

The ESRS are being revised to simplify them. EFRAG published drafts cutting more than 60% of the mandatory data points, and the European Commission put the revised drafts out for public consultation between 6 May and 3 June 2026, with a delegated act expected by end 2026 and application targeted at financial years beginning from 2027 (with possible early voluntary adoption). Until the revised ESRS are formally adopted, the 2023 ESRS (Commission Delegated Regulation (EU) 2023/2772) remain the legally binding reference.

Implications for the carbon footprint

A significant portion of reporting effort is concentrated on climate. ESRS E1 requires disclosure of greenhouse gas emissions by scope: Scope 1 (direct emissions), Scope 2 (energy) and Scope 3 (value chain), typically following the GHG Protocol, as well as reduction targets and transition plans.

How to prepare

• Conduct the double materiality assessment to narrow down the topics to report on.
• Measure the carbon footprint across all three scopes.
• Identify data gaps and establish collection and control processes.
• Prepare information for independent verification.

At Manglai we help companies measure their carbon footprint and structure the information required by the ESRS and CSRD. Discover how Manglai can help you.