Application of the European Sustainability Reporting Standards (ESRS)

DEVLHON Consulting Explains: The First Application of the European Sustainability Reporting Standards (ESRS)

Following our previous article on the CSRD regulations, we continue with an in-depth analysis of the initial steps for implementing the European Sustainability Reporting Standards (ESRS), through the recent publication from ESMA.

In 2025, the first group of large public-interest entities will be required to publish their initial sustainability reports in accordance with the ESRS, as mandated by the CSRD directive. This obligation represents a profound shift in sustainability reporting practices, aiming to improve corporate transparency on sustainability matters. Through a public statement, ESMA highlights key elements companies must consider when preparing their sustainability reports.

 Governance and Internal Controls

ESMA emphasizes the importance of companies establishing robust governance structures and appropriate internal controls to ensure high-quality reporting. Management bodies, including the audit committee, must ensure the overall consistency and quality of sustainability disclosures.

 The Importance of Double Materiality

The concept of double materiality is central to the ESRS. Companies must identify and assess both the environmental, social, and governance (ESG) impacts on their business, as well as the impact their business has on these areas. This requires a thorough evaluation to determine which material topics should be included in the reports.

 Use of Transitional Measures

To aid in the transition to this new framework, companies can benefit from transitional measures, particularly regarding data collection within their value chain. However, ESMA insists on the importance of being transparent about the use of these measures and the plans in place to address any gaps.

 Structuring and Digitizing Reports

ESMA recommends that companies adopt a structured approach to preparing their sustainability statements, anticipating the future digitization of reports. This will facilitate their conversion into digital formats in an evolving regulatory landscape.

 Connecting Financial and Sustainability Information

Finally, ESMA stresses the importance of establishing a clear connection between financial and sustainability information. This interconnection is crucial for ensuring the consistency of reports and understanding the current and future financial impacts of corporate sustainability strategies.

Conclusion

This first wave of ESRS applications, scheduled for 2025, represents a decisive step toward more rigorous and transparent sustainability reporting. DEVLHON Consulting continues to closely monitor these developments to help companies transition to full compliance with the new regulatory requirements on sustainability.

How will these new obligations impact your reporting strategy? Contact DEVLHON Consulting to learn more about the best practices for high-quality sustainability reporting.

Source : file:///C:/Users/devlh/OneDrive/Bureau/AA%20BKE/ESMA32-992851010-1597_-_ESRS_Statement.pdf