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  • Studio Paci

Introduction of European Sustainability Reporting Standards (ESRS) in EU Legislation

📜 Regulatory Context

On December 22, 2023, the Official Journal of the European Union published the Delegated Regulation (EU) 2023/2772.

This regulation, pivotal for sustainability reporting, introduces the first set of the European Sustainability Reporting Standards (ESRS), pursuant to Articles 19-bis and 29-bis of Directive 2013/34/EU and in accordance with the Corporate Sustainability Reporting Directive (CSRD).

🏛️ Core Principles of the ESRS

The regulation is structured into 2 main annexes:

Annex I: Presents the cross-cutting and thematic principles of the ESRS.

It is divided into:

  • ESRS 1: 'General Requirements', which establishes the ESRS framework, editorial conventions, and key concepts.

  • ESRS 2: 'General Information', which imposes universal reporting obligations for all enterprises.

Annex II: Contains two crucial tables for understanding the standards, one with acronyms used in the ESRS and the other with definitions of terms used.

🌍 Impact on Environmental and Social Issues

The ESRS focus on environmental and social issues of significance, including:

  • Climate Change

  • Pollution

  • Water and Marine Resource Management

  • Biodiversity

  • Circular Economy

Additionally, they address social issues related to the workforce, value chain, communities, and consumers.

⚖️ Applicability and Implementation

The regulation will come into effect on January 1, 2024, and will be applicable to financial years starting from that date.

Its direct applicability in Member States obviates the need for national transposition.

🚧 Evolving Sector

It is emphasized that the ESRS are in an initial stage of development, with further sets of sector-specific principles still being defined.

These principles will address significant impacts and opportunities for specific sectors.

🔍 EFRAG's Call for Participation

The European Financial Reporting Advisory Group (EFRAG) has initiated a "call for participation" to field-test new standards under development, such as the "ESRS for listed SMEs" and the "voluntary sustainability reporting standard for non-listed SMEs", aimed at becoming benchmarks for sustainability reporting.


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