ESRS

Question 1

What does ESRS stand for?

Answer 1

European Sustainability Reporting Standards

Question 2

What is ESRS?

Answer 2

A set of rules developed to standardise sustainability reporting for companies, enhancing transparency and comparability of their ESG activities

Question 3

What are the different sets of standards that will be developed, based on levels of information?

Answer 3

1. Sector agnostic: common base for all entities in all sectors (promotes comparability)
2. Sector-specific (promotes relevance and peer comparison)
3. Entity-specific

Question 4

What are the different sets of standards that will be developed, based on theme?

Answer 4

1. General (ESRS 1 and 2)
2. Environmental (ESRS E1- E5)
3. Social (ESRS S1 - S4)
4. Governance (ESRS G1)

Question 5

Not every standards are applicable to every entity, how is this decided?

Answer 5

ESRS 1 & 2 are mandatory for all entities, the other 10 subject to double materiality assessments:

On a sector level: materiality analysis and selection of key issues by the standard-setter

On a entity-specific level: materiality analysis and selection by the entity itself based on a process defined by the standard-setter

Question 6

What does ESRS 1 disclose?

Answer 6

General requirements

Question 7

ESRS 1 Ch. 2 - Qualitative Characteristics:
What are the 5 qualitative characteristics?

Answer 7

1. Relevance (cfr. double materiality)
2. Faithful Representation (complete, neutral and accurate)
3. Comparability
4. Verifiability (cfr. ESG Assurance)
5. Understandability

Question 8

ESRS 1 Ch. 3: Double Materiality - what is it?

Answer 8

A concept that refers to two levels of materiality:
1. Impact materiality (inside-out)
→ directly linked through operations, products, services or relations
2. Financial materiality (outside-in)

Question 9

Double Materiality - What are the key elements to concider?

Answer 9

1. Stakeholder engagement
2. Time horizon
3. Value chain

Question 10

Double Materiality - Detailed approach: what are the four main steps to an assessment?

Answer 10

1. Prepare and research
2. Prepare for stakeholder engagement
3. Double materiality
4. Materiality output

Question 11

Double Materiality Assessment - What are the four steps to 1. Prepare and research?

Answer 11

1. Group subsidiaries and structure assessment
2. Peer benchmarking & Research (define initial list of topics & IROs)
3. Define list of IROs
4. Develop scoring framework and set threshold

Question 12

Double Materiality Assessment - What are the two steps to 2. Prepare for stakeholder engagement?

Answer 12

1. Determination (determine stakeholders & engagement method)
2. Engagement (draw out insights on likely material impacts and IROs)

Question 13

What are the two groups of stakeholders according to ESRS?

Answer 13

1. Affected stakeholders
2. Users of sustainability statements

Question 14

What are the ESRS guidelines concerning Stakeholder determination?

Answer 14

• Define stakeholder categories
• Identify which categories you wish to engage with
• Consider SMEs and KOLs as proxy stakeholders
• Define a weighing system for categories

Question 15

What are SMEs and KOLs?

Answer 15

Subject Matter Experts & Key Opinion Leaders