EU European Sustainability Reporting Standards (ESRS)
ENFORCEMENT TIMELINE
Phased application beginning January 1, 2024 (starting with CSRD first-wave companies)
Overview
The European Sustainability Reporting Standards (ESRS) are a legally binding delegated regulation (Delegated Regulation (EU) 2023/2772) under the EU Corporate Sustainability Reporting Directive (CSRD), setting out the specific disclosure items, measurement methods, and reporting formats that companies within scope must follow.
Drafted by EFRAG (the European Financial Reporting Advisory Group), the standards comprise twelve total standards spanning Environment (E1–E5: climate, pollution, water, biodiversity, and resource use/circular economy), Social (S1–S4: own workforce, workers in the value chain, affected communities, and consumers), and Governance (G1: business conduct). Following the principle of "double materiality" (financial materiality and impact materiality), companies must disclose quantitative and qualitative information spanning their entire value chain.
Enforcement Timeline
July 31, 2023: The European Commission adopts the first set of ESRS (all twelve standards).
December 22, 2023: Published in the EU Official Journal (Delegated Regulation (EU) 2023/2772).
January 1, 2024: Application begins for large public-interest entities previously covered by the NFRD (first wave; reported in 2025).
January 1, 2025: Application begins for large companies (second wave; reported in 2026).
2028–2029: Application extends to large non-EU companies (including EU parent companies), and sector-specific ESRS are developed and rolled out.
Business Impact
EU subsidiaries and parent companies of companies subject to CSRD must build data collection, internal control, and third-party assurance processes aligned with the ESRS — particularly Scope 1–3 emissions and transition plans under climate standard E1, pollution under E2, and resource use and circular economy under E5.