ESRS S3 - Affected Communities

ESRS S3, Affected communities, is one of the European Sustainability Reporting Standards (ESRS) and a social standard within the framework that supports the Corporate Sustainability Reporting Directive (CSRD). It requires companies to disclose how their own operations and their value chain affect the communities living around their sites or otherwise impacted by their activities.

The standard focuses on people and communities, not on emissions. Affected communities can include local residents near operations, communities along the supply chain, and Indigenous Peoples whose lands, rights or livelihoods may be affected by company activities or projects.

What does ESRS S3 cover?

ESRS S3 asks companies to report the material impacts, risks and opportunities related to affected communities, and the policies and actions taken to manage them. Typical topics include:

• Communities' economic, social and cultural rights: adequate housing, food, water and sanitation, land-related impacts and security-related impacts.
• Communities' civil and political rights: freedom of expression and assembly, and protection of human rights defenders.
• Rights of Indigenous Peoples: free, prior and informed consent, self-determination and cultural rights.

Companies also describe how they engage with affected communities and the channels available to raise and remedy concerns.

How it connects to environmental impacts

Although ESRS S3 is a social standard, environmental and social impacts are often linked. Pollution, water use or land-use change driven by a company's activities can directly affect nearby communities, so the social analysis under ESRS S3 frequently draws on the same underlying operational data used for the environmental standards, such as ESRS E2 (Pollution) and ESRS E3 (Water and marine resources).

Who has to apply it?

ESRS S3 applies to companies within the scope of the CSRD that report under the ESRS, where impacts on affected communities are assessed as material in their double materiality analysis. Following the 2026 Omnibus simplification (Directive (EU) 2026/470), the CSRD scope was narrowed to large companies above 1,000 employees and 450 million euros in net turnover, and the ESRS are being revised to reduce mandatory datapoints, with the revised set expected to apply from financial year 2027.

Why ESRS S3 matters

Managing community impacts well reduces the risk of conflict, project delays and reputational damage, and supports a company's social licence to operate. Transparent reporting under ESRS S3 also responds to investor and stakeholder expectations and aligns with broader frameworks such as the UN Sustainable Development Goals.

Relationship with other standards

ESRS S3 sits alongside the other social standards: ESRS S1 (Own workforce), ESRS S2 (Workers in the value chain) and ESRS S4 (Consumers and end-users), all part of the wider European Sustainability Reporting Standards (ESRS). Its due diligence logic also connects with the Corporate Sustainability Due Diligence Directive (CSDDD).

At Manglai we help companies measure their carbon footprint and prepare their sustainability reporting under the CSRD and ESRS. Discover how Manglai can help you.