A guide to the

CSRD and ESRS

 Contents

What are the CSRD and ESRS? 03

Who do they apply to and when? 04

1 Timeline for the ESRS implementation 05

2 Consequences of not complying with ESRS 06

Reporting areas and key requirements 07

What is double materiality? 10

How to get started with the CSRD/ESRS 11

Position Green’s end-to-end solution 13

Key links and further reading 14

02 CSRD/ESRS
 What are the CSRD
and ESRS?
“
The CSRD and the interlinked mandatory reporting
standards ESRS create a new paradigm for
sustainability reporting. It is mandatory, it is based on
double materiality, it requires limited assurance and
it should be reported in the management report.

Tony Christensen, CSRD and ESRS expert at Position Green

The CSRD stands for the Corporate Sustainability The ESRS have a broader view of materiality than
Reporting Directive, a revision of the EU’s the GRI and are based on double materiality from
Non-Financial Reporting Directive (NFRD). an impact and financial perspective. The double
materiality assessment will help companies to
Companies subject to the CSRD will have to understand their impact, risks and opportunities
report according to the European Sustainability spanning across their upstream and downstream
Reporting Standards (ESRS). value chains, arising from business relationships,
geographical locations and more.
The adoption of the CSRD and the interlinked
ESRS bring major changes that create a new By reporting in line with the ESRS, companies can
paradigm for sustainability reporting. The mitigate the risk of non-compliance with the new
reporting standards will also require companies law, leverage sustainability-related opportunities,
to pay even more attention to traceability and gain competitive advantages, and ultimately
transparency throughout the reporting process pursue sustainable and profitable growth.
due to the limited assurance requirement.
Going forward, sustainability reporting will have
the same importance as financial reporting.

03 CSRD/ESRS
 Who do they apply
to and when?

The CSRD will broaden the scope of

sustainability reporting obligations.
All companies covered by the CSRD
(around 50 000 companies) will sooner
or later be required to align their
sustainability reports according to the
ESRS.

The CSRD covers all listed companies on And last but not least, non-EU undertakings with
regulated markets within the EU, including small turnover above EUR 150 million in the EU if they
and medium-sized enterprises but excluding have at least one subsidiary or branch in the EU
micro-enterprises. It also applies to all large exceeding the above thresholds.
(listed or not) companies if they meet at least
two of the following three criteria:

Balance sheet total of more than EUR 20m

Net turnover of more than EUR 40m

The average number of employees during

the financial year of more than 250

04 CSRD/ESRS
 Timeline for the ESRS
implementation
There will be a gradual implementation of the ESRS, depending on the size of
the company.

June 2023
EU Commission to adopt
ESRS as delegated acts

1 January 2024
Undertakings already subject
to the NFRD (reporting in
2025 on 2024 data)

1 January 2025
Large undertakings not
currently subject to the NFRD
(reporting in 2026 on 2025 data)

1 January 2026
Listed small and medium-
sized enterprises (reporting in
2027 on 2026 data)

1 January 2028
Non-EU companies covered
by the CSRD (reporting in
2029 on 2028 data) Note! There is also the trickle-down effect of
subsidiaries to the above companies being
subject to reporting requirements by the
parent company.

05 CSRD/ESRS
 Consequences of not
complying with CSRD
If a business is found to be non-compliant with the CSRD, the company is at risk of significant
administrative sanctions. The nature of the sanctions and the fine amount will depend on the
implementation in different Member States. The company will also risk a qualified audit report which
would put the company at risk of shareholder action against it.

06 CSRD/ESRS
 Reporting areas and
key requirements
The information to disclose is defined in the ESRS and classified into four areas; one
cross-cutting standard (General requirements and disclosures) and three topical
sector-agnostic standards (Environmental, Social and Governance). There are 82
disclosure requirements, but only ESRS2 is mandatory.

07 CSRD/ESRS
 General requirements and disclosures
The general requirements and disclosures are a cross-cutting standard. It applies to everyone and is
the starting point for your reporting.

Environmental
The environmental standards are the most extensive. They have been designed with the intention of
making it easier for readers of reports to understand how a company plans to change its business
model and operations to align and excel in the shift to a sustainable economy. The report should also
show how the company fits into the various environmental goals of the European Green Deal and other
strategic and legal frameworks within the EU.

Social
The Social topical standards give organisations a framework for reporting on issues relating to their
own workforce, employees in their value chains, communities impacted by their activities, and
customers & end-users of their goods or services.

Governance
The governance topical standard outlines disclosure requirements that aim to improve users’
understanding of an organisation’s strategy and approach, processes and procedures, as well as its
performance regarding business conduct.

General requirements
Environmental Social Governance
& disclosures

ESRS 1 ESRS E1 ESRS S1 ESRS G1

General Requirements Climate change Own workers Business conduct
0 DR 9 DR 17 DR 6 DR

ESRS 2 ESRS E2 ESRS S2

General Disclosures Pollution Workers in the value chain
12 DR 6 DR 5 DR

ESRS E3 ESRS S3
Water & marine resources Affected communities
5 DR 5 DR

ESRS E4 ESRS S4
Biodiversity & ecosystems Consumer and end-users
6 DR 5 DR

ESRS E5
Resource use & circular
economy 6 DR

08 CSRD/ESRS
 “
To find the right data takes time. Even
though your company may not need to
report according to the ESRS for a couple
of years, it’s important to start collecting
the data now. To engage the entire value
chain including the management board is
time-consuming, but essential. So if I were
you, I’d start preparing now.
Felicia Gustafson, Sustainability Data Specialist and Product
Manager at Position Green

09 CSRD/ESRS
 What is double
materiality?

The ESRS are based on the concept of

double materiality. This concept includes
two different perspectives on materiality:
Impact Materiality and Financial Materiality.

Impact Materiality Financial Materiality

Impact Materiality – identifying the impacts Financial Materiality – identifying the risks and
(actual or potential, positive or negative) the opportunities that trigger effects on the company’s
company has on people or the environment cash flows, development, performance, position,
over the short-, medium-, or long-term time cost of capital or access to finance in the short-,
horizons. (The inside-out perspective) medium-, or long-term time horizons.
(The outside-in perspective)
The identified impacts are assessed based on:
The risks and opportunities are assessed based on:
Scale of the impact
Likelihood of occurrence
Scope of the impact
The size of the potential financial effects
Irremediable character of the impact

Companies will have to increasingly understand and manage sustainability impact through both
lenses.

Since the reporting will be based on a materiality analysis, not all companies will have to report on all
ten topical standards. This guides your company on focusing on the most material ESG topics and to
develop policy actions and targets to minimise negative impacts, mitigate risks and seize
opportunities.

10 CSRD/ESRS
 How to get started with
CSRD and ESRS
To prepare your organisation for the new sustainability reporting standards, there are a
number of measures you can take to make the adaptation as smooth as possible.

11 CSRD/ESRS
 5 key steps towards CSRD compliance​

01. Materiality assessment based on

double materiality
The double materiality assessment is the foundation and starting point to
report according to the ESRS and it will define what your organisation should
report on going forward.

02. Gap analysis to understand baseline

A gap analysis will give you a good understanding on how well your current
reporting aligns with the coming ESRS requirements and what is needed to
close those gaps.

03. Train and engage the organisation

To prepare your organisation for the new sustainability reporting standard
and to make the adaptation as smooth as possible, it’s important to train and
engage internal stakeholders.

04. Start building processes and set up a

system for data collection
To make sure you will comply with the reporting requirements and to be fully
prepared, it’s important to start building processes and structures for data
collection.

05. Adjust reporting to reflect ESRS

Make sure to describe the sustainability approach in line with the ESRS and
to meet all disclosure requirements.

12 CSRD/ESRS
 Position Green’s
end-to-end solution

Regardless of where you are on your

CSRD and ESRS journey, the experts
at Position Green can support you with
analysis, training and a digital solution.

Our offering
We at Position Green provide both tailored
technical solutions and expert advisory services
to help you cut through the complexities of the
CSRD/ESRS and fuel your transformation journey. Data Insight

Position Green’s Platform provides a digital

solution to efficiently collect, analyse and report all
sustainability data in line with the ESRS
requirements. Our platform solution simplifies the
process for external assurance providers to
Strategy Action
efficiently provide statutory limited assurance for
the ESRS report.

01 Materiality assessment based on

double materiality

02 Gap analysis

03 Train and engage the organisation

04 Digital solution for reporting

according to the ESRS

13 CSRD/ESRS
 Key links and
further reading
Position Green ESRS Solution

Webinar Recording: “How can companies prepare for ESRS”

Position Green e-learning packages

Position Green Instructor-led Training

EFRAG: First Set of draft ESRS

ESRS 1 General Requirements

14 CSRD/ESRS
Let’s create a sustainable, fair and
resilient future – together!

Want to learn more about the

CSRD and ESRS? Get in touch at
positiongreen.com/contact-us