{"id":1055,"date":"2025-03-03T09:00:39","date_gmt":"2025-03-03T09:00:39","guid":{"rendered":"https:\/\/www.ivyhouse.it\/?p=1055"},"modified":"2025-02-10T10:31:40","modified_gmt":"2025-02-10T10:31:40","slug":"esrs-sustainability-reporting-guide","status":"publish","type":"post","link":"https:\/\/www.ivyhouse.it\/en\/2025\/03\/esrs-sustainability-reporting-guide\/","title":{"rendered":"Mandatory ESRS Sustainability Reporting: A Guide for European Businesses"},"content":{"rendered":"

With the entry into force of the Corporate Sustainability Reporting Directive (CSRD), the European Union has taken a significant step towards integrating sustainability into business processes. This new regulatory framework introduces the obligation for European companies with more than 250 employees to draw up a sustainability report compliant with the European Sustainability Reporting Standards (ESRS). The aim is to ensure greater transparency and comparability of information related to environmental, social and governance (ESG) performance. Below, we will explore the details of this legislation, the mandatory criteria and the implications for businesses.<\/span>\u00a0<\/span>\u00a0<\/span><\/p>\n

The legal context<\/span>\u00a0<\/span><\/h3>\n

The introduction of the ESRS is part of the broader framework of the CSRD, adopted in 2021, which updates and expands the scope of the previous Non-Financial Reporting Directive (NFRD). The CSRD aims to improve the quality of information disclosed by companies on sustainability, promoting a transition to a more sustainable and resilient economy. The ESRS are the operational tool that defines the specific requirements for ESG reporting.<\/span>\u00a0<\/span>\u00a0<\/span><\/p>\n

The Mandatory Criteria<\/span>\u00a0<\/span><\/h3>\n

Not all European companies are subject to the obligation to prepare a sustainability report according to the ESRS. The CSRD states that the obligation concerns:<\/span>\u00a0<\/span><\/p>\n

    \n
  1. Company Size:<\/span><\/li>\n<\/ol>\n

    – Companies with more than 250 employees.<\/span>\u00a0<\/span><\/p>\n

      \n
    1. Turnover and Balance Sheet:<\/span><\/li>\n<\/ol>\n

      – Net sales of more than \u20ac40 million.<\/span>\u00a0<\/span><\/p>\n

      – Total balance sheet assets of more than \u20ac20 million.<\/span>\u00a0<\/span><\/p>\n

        \n
      1. Listed entities:<\/span><\/li>\n<\/ol>\n

        – All companies listed on EU regulated markets, regardless of their size, with the exception of micro-enterprises.<\/span>\u00a0<\/span><\/p>\n

          \n
        1. Business Groups:<\/span><\/li>\n<\/ol>\n

          – Subsidiaries of multinationals with registered offices outside the EU are also included, if they exceed certain thresholds of turnover generated in the European Union.<\/span>\u00a0<\/span><\/p>\n

          These criteria represent a significant expansion from the NFRD, which applied to a much smaller number of companies.<\/span>\u00a0<\/span>\u00a0<\/span><\/p>\n

          Contents of the Sustainability Report according to ESRS<\/span>\u00a0<\/span><\/h4>\n

          The ESRS outline a clear and detailed framework for reporting ESG performance. The main aspects covered include:<\/span>\u00a0<\/span><\/p>\n

            \n
          1. Environmental Performance (E):<\/span><\/li>\n<\/ol>\n

            – Direct and indirect environmental impacts.<\/span>\u00a0<\/span><\/p>\n

            – Greenhouse gas (GHG) emissions management with details on Scope 1, Scope 2 and, where possible, Scope 3 emissions.<\/span>\u00a0<\/span><\/p>\n

            – Strategies for climate change mitigation and adaptation to extreme climate events.<\/span>\u00a0<\/span><\/p>\n

            – Sustainable use of natural resources, including water and energy.<\/span>\u00a0<\/span>\u00a0<\/span><\/p>\n

              \n
            1. Social Performance (S):<\/span><\/li>\n<\/ol>\n

              – Gender equality, diversity and inclusion.<\/span>\u00a0<\/span><\/p>\n

              – Working conditions, health and safety of employees.<\/span>\u00a0<\/span><\/p>\n

              – Impacts on local communities and respect for human rights along the supply chain.<\/span>\u00a0<\/span><\/p>\n

                \n
              1. Governance (G):<\/span><\/li>\n<\/ol>\n

                – Corporate governance structures and their alignment with sustainability goals.<\/span>\u00a0<\/span><\/p>\n

                – Internal control systems and ESG risk management.<\/span>\u00a0<\/span><\/p>\n

                – Remuneration policies and their link with sustainability performance.<\/span>\u00a0<\/span><\/p>\n

                The ESRS standards also require companies to provide quantitative and qualitative data, including future goals and progress against stated commitments.<\/span>\u00a0<\/span>\u00a0<\/span><\/p>\n

                \u00a0Implications for Companies<\/span>\u00a0<\/span><\/h3>\n

                \u00a0Advantages<\/strong><\/span>\u00a0<\/strong><\/p>\n

                  \n
                1. Transparency and Trust:<\/span><\/li>\n<\/ol>\n

                  – Improving transparency can strengthen the confidence of investors and other stakeholders.<\/span>\u00a0<\/span><\/p>\n

                    \n
                  1. Access to Capital:<\/span><\/li>\n<\/ol>\n

                    – Companies that demonstrate credible commitments to sustainability can more easily access green or sustainable financing.<\/span>\u00a0<\/span><\/p>\n

                      \n
                    1. Competitive Advantage:<\/span><\/li>\n<\/ol>\n

                      – Adopting sustainable practices can differentiate the company in the market, attract talent and customers.<\/span>\u00a0<\/span><\/p>\n

                      \u00a0<\/span>Challenges\u00a0<\/strong><\/p>\n

                        \n
                      1. Implementation Costs:<\/span><\/li>\n<\/ol>\n

                        – Collecting, analyzing, and verifying ESG information requires significant resources, both in terms of time and money.<\/span>\u00a0<\/span><\/p>\n

                          \n
                        1. Technical Capabilities:<\/span><\/li>\n<\/ol>\n

                          – Compliance with ESRS requires specific skills and advanced technological tools for data collection and management.<\/span>\u00a0<\/span><\/p>\n

                            \n
                          1. Adaptation to the New Standards:<\/span><\/li>\n<\/ol>\n

                            – Enterprises must go through a learning and adaptation process to implement the new requirements.<\/span>\u00a0<\/span><\/p>\n

                            \u00a0<\/span>Application Timing<\/span>\u00a0<\/span><\/h3>\n

                            The CSRD provides for a gradual implementation of reporting requirements:<\/span>\u00a0<\/span><\/p>\n

                            – From 2024: Companies already subject to the NFRD will be the first to have to comply with the ESRS.<\/span>\u00a0<\/span><\/p>\n

                            \u00a0<\/span>– From 2025: Large companies that meet the criteria described above will have to submit their first report for the 2024 fiscal year.<\/span>\u00a0<\/span><\/p>\n

                            \u00a0<\/span>– From 2026: SMEs listed on regulated markets will be included, with simplified obligations compared to large companies.<\/span>\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

                            With the entry into force of the Corporate Sustainability Reporting Directive (CSRD), the European Union has taken a significant step towards integrating sustainability into business processes. This new regulatory framework introduces the obligation for European companies with more than 250 employees to draw up a sustainability report compliant with the European Sustainability Reporting Standards (ESRS). […]<\/p>\n","protected":false},"author":1,"featured_media":1053,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14,1],"tags":[33,24,35,22],"class_list":["post-1055","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-en","category-non-categorizzato","tag-csrd-en","tag-esg-en","tag-esrs-en","tag-sustainability-budgets"],"yoast_head":"\nMandatory ESRS Sustainability Reporting: A Guide for European Businesses - Ivy House<\/title>\n<meta name=\"description\" content=\"Learn about the mandatory sustainability reporting requirements under ESRS. 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