ESRS iXBRL
European Sustainability Reporting Standards (ESRS)
As sustainability becomes an increasingly important issue for businesses and investors, there is a growing need for accurate and transparent sustainability reporting. The European Sustainability Reporting System (ESRS) is designed to meet this need, providing a standardized framework for sustainability reporting across Europe.
ESRS iXBRL Reporting
Europe’s Corporate Sustainability Reporting Directive [CSRD] came into effect on January 05, 2023, and sets new rules and regulations for sustainability reporting obligations for European companies. The reporting standards and framework have been described under the European Sustainability Reporting Standards [ESRS], and these draft frameworks have been published by European Financial Reporting Advisory Group [EFRAG].
EFRAG delivers the first set of draft ESRS to the European Commission
European Financial Reporting Advisory Group, EFRAG, announced through a press release dated November 23, 2022, that it has submitted the first set of drafts of ESRS to the European Commission.
What all is included in the Draft?
This first set of 12 draft ESRS is composed of:
Cross-cutting standards
Topical standards
Which companies will be affected by the ESRS?
ESRS will be implemented in phases, accordingly, all the companies have been classified on certain parameters to follow the ESRS. Here is the classification on which CSRD will be implemented.
- All Large publicly listed companies that are already under non-financial reporting directive. i.e. Public interest entities with more than 500 employees
- Companies meeting two of the three criteria, companies with:
- more than 250 employees
- More than 40 million euros in turnover
- 20 million euros in total assets
In the case of non-EU entities, Companies with a net turnover over 150 million Euro in the EU, with at least one subsidiary or branch in the EU.
When would ESRS apply? Timeline
CSRD will be effected from January 01, 2024. Here is the timeline for ESRS reporting.
1. January 01, 2024 (Reports Due 2025): For large publicly listed companies
2. January 02, 2025 (Reports Due 2026): For companies other than large public meeting two of the three criteria, companies with:
a. more than 250 employees
b. More than 40 million euros in turnover
c. 20 million euros in total assets
3. January 02, 2026 (Reports Due 2027): Listed EU companies, including listed Small and Medium Enterprises (SMEs) except micro-undertakings.
4. January 02, 2027 (Reports Due 2028): Non-EU Companies with a net turnover over 150 million Euro in the European Union, having at least one subsidiary or branch in the EU.
Disclosure requirements
“The objective of this [draft] Standard is to set out the general requirements that undertakings shall comply with when preparing and presenting sustainability-related information under the Accounting Directive as amended by the Corporate Sustainability Reporting Directive (CSRD).”
-EFRAG
Standards and Disclosure requirements under draft ESRS:
Complying with [draft] ESRS
The disclosure requirements as per Drafts ESRS 2, draft topical standards and draft sector specific ESRS are categories in four reporting areas:
- Governance (GOV)
- Strategy (SBM)
- Impact, risk and opportunity management (IRO)
- Metrics and targets (MT)
Topical ESRS
Entity-specific disclosures
Disclosure Content for policies, actions and targets
Topical standards
EFRAG has published 12 draft standards which include two cross-cutting standards and 10 topical standards.
ESRS iXRBL Tagging Requirements
EFRAG has published a Proof-of-Concept XBRL taxonomy example covering a few disclosure requirements based on Basis for Conclusion of the Environmental reporting standard ESRS E1.
Deadline: The draft and final deliverables are expected by April 10, 2023, and August 31, 2023, respectively.
SustainoTech is well-positioned to help you out in your ESRS iXBRL reporting.