2025 Draft Simplified ESRS ESRS 1 ESRS 2 ESRS E1 ESRS E2 ESRS E3 ESRS E4 ESRS E5 ESRS S1 ESRS S2 ESRS S3 ESRS S4 ESRS G1 ESRS E1

AR 6 for para. 15

(Key elements of the methodology)

(AR 11 and AR 12 amended) In conducting its climate-related risk analysis, the undertaking shall:

(a) identify climate-related hazards (for climate-related physical risks) or transition events (for climate-related transition risks) over the short, medium and long term and screen its assets and business activities to assess whether they are exposed to them; and

(b) assess the extent to which its assets and business activities are exposed and are sensitive to the identified climate-related hazards or transition events, taking into consideration the likelihood, magnitude and duration of them, as well as the locations of its assets and business dependencies in its value-chain (for climate-related hazards).

AR 7 for para. 18

The analysis of climate resilience builds upon the identification of climate-related risks reported in ESRS E1-2, paragraph 15. Therefore, the scope of the analysis of climate resilience is aligned with that of the undertaking’s material climate-related risks and informed by climate-related scenario analysis if performed. If climate related scenario analysis is used specifically for the purpose of assessing climate resilience, the undertaking shall disclose the information prescribed under paragraph 16 and 18.

AR 8 for para. 18

(Resilience of strategy)

When assessing the climate resilience of its strategy and business model, the undertaking shall consider the implications for its strategy and business model of the assessments performed in accordance with ESRS E1-2 and of the exposures at risk disclosed in accordance with ESRS E1-11 (anticipated financial effects), including actions required to respond to the climate-related risks and opportunities identified through climate-related scenario analysis if performed.

AR 9 for para. 18(a)

(Resilience of strategy)

(AR 8 amended) When disclosing the results and implications of its analysis of climate resilience in accordance with paragraph 18(a), the undertaking shall provide its assessment of its climate resilience as at the reporting date. An undertaking is not required to perform an analysis of climate resilience on an annual basis. If the undertaking has updated its assessment of climate-related impacts, risks and opportunities (per ESRS E1-2), it shall update its analysis of resilience.

When disclosing under paragraph 18, financial institutions may leverage on the applicable prudential regulatory framework if it includes references to resilience analysis or to related concepts such as usage of scenarios in the context of sustainability risk plans.

AR 10 for para. 18(c)

(Resilience of strategy)

(AR 8 amended) When disclosing on its capacity to adjust its strategy and business model in accordance with paragraph 18(c), the undertaking shall consider:

(a) the availability of, and flexibility in, existing financial resources to manage financial effects of climate-related risks and to capitalise on climate-related opportunities;

(b) its ability to redeploy, repurpose, upgrade or decommission existing assets in response to climate-related changes;

(c) the effect of current and planned investments in climate change mitigation, adaptation and transition opportunities for climate resilience;

(d) cross-referencing to its climate change mitigation and climate change adaptation actions, disclosed in ESRS E1-5.

AR 11 for para. 22

(Climate change targets)

(60 amended) If the undertaking discloses a net-zero target separately to any GHG emission reduction targets it has set, as per ESRS 2 GDR-T, it shall explain how it intends to permanently neutralise any residual GHG emissions.

AR 12 for para. 23

(GHG emissions reduction targets)

(AR 34(b) amended) The GHG emission reduction targets shall be gross targets, meaning that the undertaking shall not include GHG removals, carbon credits or avoided emissions as means of achieving the GHG emission reduction targets.

In accordance with GDR-T, the undertaking shall provide information about the scope and methodologies used to define the target, including the method used to calculate scope 2 GHG emissions (i.e. either the location-based or market-based method).

AR 13 for para. 23

(GHG emissions reduction targets)

(AR 23 amended) If the undertaking discloses intensity targets, they shall be formulated as ratios of GHG emissions relative to a unit of physical activity or economic output. In cases where the undertaking has only set a GHG intensity reduction target, it shall disclose the associated absolute values for the target year and interim target year(s) – except for financial institutions scope 3, category 15 emissions, as explained below. This may result in a situation where the undertaking is required to disclose an increase of absolute GHG emissions for the target year and interim target year(s), e.g. because it anticipates the organic growth of its business.

Financial institutions are exempted from disclosing absolute values for their scope 3, category 15 emission intensity targets, provided they:

(a) use physical or financial measures as denominators for intensity targets and consistently disclose absolute financed emissions for those targets (such as targets for material high-impact sectors); and

(b) provide contextual information (as per GDR-M) for the targets that have been set, describing the key factors influencing expected changes in absolute financed emissions over time and how they relate with the observed trends in the past 3 to 5 years.

AR 14 for para. 23

(GHG emissions reduction targets)

(AR 25(b), AR 25(c) amended) When applying GDR-T:

(a) the baseline value and base year are not to be changed unless key changes occur in either the target or reporting boundary; and

(b) the undertaking shall select a recent and representative base year. The base year chosen by the undertaking may be either the currently applied base year for existing targets or the first year of application of the sustainability reporting requirements.

AR 15 for para. 23

(Presentation of targets and actions)

(AR 31 amended) The undertaking may present its GHG emission reduction targets together with its climate change mitigation actions (see paragraph 21) showing the decarbonisation levers and their quantitative contributions to achieve the GHG emission reduction targets as a table (see, e.g., Figure 1) or graphic over time (see, e.g., Figure 2).

Figure 1: ESRS E1 Climate Change – Table 1

Figure 2: ESRS E1 Climate Change – Graphic 1

AR 16 for para. 23

(GHG emissions reduction targets)

(New) If the undertaking reports under ESRS E1-8 using an operational control boundary, it may report scope 1 and scope 2 GHG emission reduction targets referring to this organisational boundary.

AR 17 for para. 23(c)

(GHG emissions reduction targets compatible with 1.5°C)

(AR 26 amended) When disclosing the information required under paragraph 23(c), the undertaking shall compare its target value(s) with a sector-specific (if available) or a cross-sector emission pathway compatible with limiting global warming to 1.5°C. For this purpose, the undertaking shall calculate a 1.5°C-aligned reference target value for scope 1 and 2 (and a separate one for scope 3 if it has scope 3 GHG emissions reduction targets) against which its own GHG emission reduction targets or interim targets in the respective scopes can be compared.

The explanation of how the targets are compatible is done by benchmarking the target value against the reference target value. Validation through an independent third party, including information on the third party, the methodology/standard applied and the trajectory used can be valuable inputs to be considered in this explanation.

AR 18 for para. 25

(Energy consumption and mix)

(AR 32 amended) When preparing the information on energy consumption required under paragraph 25, the undertaking shall adopt the following calculation approaches:

(a) (AR 32(b) amended) exclude feedstocks and fuels that are not combusted for energy purposes (e.g. natural gas to produce polymers). The undertaking that consumes fuel as feedstocks can disclose information on this consumption separately from the required disclosures;

(b) (AR 32(c) amended) use MWh in Lower Heating Value or net calorific value for all quantitative combustion-related information;

(c) (AR 32(d) amended) base all quantitative energy-related information on final energy consumption, therefore referring to the amount of energy the undertaking actually consumes;

(d) (AR 32(e) amended) avoid double counting fuel consumption when disclosing self-generated energy consumption. If the undertaking generates electricity from either a non-renewable or renewable fuel source and then consumes the generated electricity, the energy consumption shall be accounted only once under fuel consumption;

(e) (AR 32(f) amended) not offset energy consumption even if onsite generated energy is sold to and used by a third party;

(f) (AR 32(g) amended) not count energy that is sourced from within the organisational boundary under ‘purchased or acquired’ energy;

(g) (AR 32(h) amended) account for steam, heat or cooling received as ‘waste energy’ from a third party’s industrial processes under ‘purchased or acquired’ energy;

(h) (AR 32(i) amended) account for renewable hydrogen as a renewable fuel. Hydrogen that is not completely derived from renewable sources shall be included under ‘fuel consumption from other non-renewable sources’; and

(i) (AR 32(j) amended) adopt a conservative approach when splitting the electricity, steam, heat or cooling between renewable and non-renewable sources and indicate whether it derives the fraction of renewables from the market-based or location-based approach. The undertaking that relies on the market-based approach shall consider energy consumption as deriving from renewable sources only if the nature of the purchased environmental attribute is clearly defined in the contractual arrangements with its suppliers (i.e. renewable power purchasing agreement, standardised green electricity tariff, market instruments such as Guarantee of Origin from renewable sources in Europe(*) or similar instruments such as Renewable Energy Certificates in the US and Canada).

AR 19 for para. 29

(Emissions reporting boundary)

Chapter 5 of ESRS 1 General Requirements defines the reporting boundary to be applied. The starting point of that boundary corresponds to financial control as per the GHG Protocol Corporate Accounting and Reporting Standard (2004). In addition, the undertaking applies the provisions in paragraphs 72 (leased assets), 73 (benefit schemes) and AR 35 for paragraph 62 (joint operations) of ESRS 1 General Requirements.

When, due to specific facts and circumstances, the information reported in paragraph 29(a)(b) is insufficient to portray the emissions resulting from operated assets that are outside the reporting boundary, the undertaking shall report GHG scope 1 and 2 emissions calculated on the basis of its operational control boundary as defined by the GHG Protocol Corporate Accounting and Reporting Standard (2004).

AR 20 for paras. 28 and 29

(Emissions reporting)

(AR 39 amended) When preparing the information for reporting GHG emissions, the undertaking shall:

(a) (AR 39(a) amended) consider the GHG Protocol Corporate Accounting and Reporting Standard (2004). The undertaking may also consider Commission Recommendation (EU) 2021/2279(*) or EN ISO 14064-1:2018. In all cases, the requirements of ESRS take precedence over the above-mentioned GHG accounting standards (e.g. regarding reporting boundaries);

(b) (AR 39(c) amended) include emissions of CO₂, CH₄, N₂O, HFC_s, PFCs, SF₆ and NF₃. Additional GHG_s may be considered when significant;

(c) (AR 39(d) amended) use the most recent Global Warming Potential (GWP) values published by the Intergovernmental Panel on Climate Change (IPCC) based on a 100-year time horizon to calculate CO₂eq emissions of non-CO₂ gases. If emission factors based on older GWP values are the most suitable or available, the undertaking can use these and explain in accordance with ESRS 2 GDR-M, paragraph 49, which GWPs the GHG inventory is based on;

(d) (AR 43(d), AR 45(f), AR 46(k) amended) not include any removals, any purchased, sold or transferred carbon credits or any GHG allowances in the calculation of GHG emissions; and

(e) (AR 43(c), AR 45(e), AR 46(j) amended) not include biogenic emissions of CO₂ from the combustion or biodegradation of biomass in scope 1, 2 and 3. The undertaking shall include non-CO₂ GHG emissions, such as CH₄ and N₂O in the relevant scopes.

AR 21 for para. 29(a)

(Scope 1 EU ETS emissions)

(AR 43(e) amended) For activities covered by the EU Emissions Trading System (ETS), the undertaking shall report on scope 1 emissions following the EU ETS methodology. The EU ETS methodology may also be applied to activities in geographies and sectors that are not covered by the EU ETS provided the methodology is aligned with local jurisdictional rules and relevant for the undertaking.

AR 22 for para. 29(a)

(Scope 1 emissions reporting)

(AR 44 amended) When preparing the information on the percentage of scope 1 GHG emissions from EU ETS required under paragraph 29(a), the undertaking shall:

(a) consider GHG emissions from its emission sources that are subject to EU ETS;

(b) ensure the same accounting period for gross scope 1 GHG emissions and GHG emissions regulated under the ETS; and

(c) calculate the share by using the following formula:

AR 23 for para. 29(b)

(Scope 2 emissions reporting)

(AR 45 amended) When preparing the information on gross scope 2 GHG emissions required under paragraph 29, the undertaking shall:

(a) (AR 45(a) amended) consider the GHG Protocol scope 2 Guidance (Version 2015), particularly the scope 2 quality criteria in Chapter 7.1 relating to contractual instruments. The undertaking may also consider Commission Recommendation (EU) 2021/2279 or the relevant requirements for the quantification of indirect GHG emissions from imported energy in EN ISO 14064-1:2018; and

(b) (AR 45(d) amended) in accordance with ESRS 2 GDR-M, provide information about any contractual instruments that is necessary to inform users’ understanding of the entity’s scope 2 market based GHG emissions.

AR 24 for para. 29(c)

(Scope 3 emissions reporting)

(AR 46 amended) When preparing the information on gross scope 3 GHG emissions required under paragraph 29, the undertaking shall:

(a) (AR 46(a) amended) consider the GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard (Version 2011). The undertaking can also consider Commission Recommendation (EU) 2021/2279 or the relevant requirements for the quantification of indirect GHG emissions from EN ISO 14064-1:2018;

(b) (AR 46(c) amended) screen its total scope 3 GHG emissions based on the 15 scope 3 categories identified by the GHG Protocol Corporate Standard and GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard (Version 2011), using relevant estimates. Alternatively, the undertaking may screen its indirect GHG emissions based on the categories provided by EN ISO 14064-1:2018, Clause 5.2.4 (excluding indirect GHG emissions from imported energy);

(c) (AR 46(d) amended) identify and disclose its significant scope 3 categories based on the magnitude of their estimated GHG emissions and other criteria provided by the GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard (Version 2011, p. 61 and 65-68) or EN ISO 14064- 1:2018, Annex H.3.2, such as financial spend, influence, related transition risks and opportunities or stakeholder views;

(d) (AR 46(g) amended) prioritise its inputs and assumptions based on the characteristics of the data (e.g. data from specific activities within the entity’s upstream and downstream value chain; timely data that faithfully represents the jurisdiction of, and the technology used for, the upstream and downstream value chain activity and its GHG emissions; and data that has been verified);

(e) (AR 46(e) amended) update scope 3 GHG emissions in each significant category every year on the basis of current activity data and update the full scope 3 GHG inventory at least every three years or on the occurrence of a significant event or a significant change in circumstances;

(f) (AR 46(b) amended) consider the GHG Accounting and Reporting Standard for the Financial Industry from the Partnership for Carbon Accounting Financials (PCAF), specifically Part A Financed Emissions ‘PCAF (2022). The Global GHG Accounting and Reporting Standard Part A: Financed Emissions. Second Edition’ , if it is a financial institution; and

(g) (AR 51 amended) if applicable, disclose GHG emissions from purchased cloud computing and data centre services as a subset of the overarching scope 3, category 1 ‘upstream purchased goods and services’.

AR 25 for paras. 28 and 29

(Emissions disaggregation)

(AR 49 amended) The undertaking shall disaggregate its GHG emissions in accordance with the provisions of ESRS 1 General Requirements, Chapter 3.3.2, if applicable. For example, it can disaggregate its GHG emissions by country or geography, operating segments, economic activity, subsidiary, GHG (CO₂, CH₄, N₂O, HFC_s, PFCs, SF₆, NF₃ and other GHGs considered by the undertaking) or source type (stationary combustion, mobile combustion, process emissions and fugitive emissions).

AR 26 for paras. 28 and 29

(Emissions disaggregation)

(AR 52 amended) The undertaking may present its GHG emissions in accordance with the table below, populating the rows as relevant in line with its disclosures under paragraph 29. A comparison of the undertaking’s emissions over time may be performed by comparing current year emissions to a meaningful comparative, e.g. a GHG emission reduction target base year, indicating the percentage change (reduction/increase) in the corresponding column.

Comparative

Current Year

% Change

Year

Emissions

Emissions

Scope 1 GHG emissions

Gross scope 1 GHG emissions (tCO₂eq)

Percentage of scope 1 GHG emissions from the EU Emissions Trading System (EU ETS) (%)

Scope 2 GHG emissions

Gross location-based scope 2 GHG emissions (tCO₂eq)

Gross market-based scope 2 GHG emissions (tCO₂eq)

Significant scope 3 GHG emissions

Total gross indirect (scope 3) GHG emissions (tCO₂eq)

1. Purchased goods and services

[sub-category]: Cloud computing and data centre services

2. Capital goods

3. Fuel and energy-related activities (not included in scope 1 or scope 2)

4. Upstream transportation and distribution

5. Waste generated in operations

6. Business traveling

7. Employee commuting

8. Upstream leased assets

9. Downstream transportation

10. Processing of sold products

11. Use of sold products

12. End-of-life treatment of sold products

13. Downstream leased assets

14. Franchises

15. Investments

Direct biogenic scope 1 emissions

AR 27 for para. 32

(GHG removals and storage)

(AR 58 amended) GHG removals and storage include both nature-based solutions as well as technological removals and storage. When preparing information on its projects, the undertaking shall:

(a) (AR 58(b) amended) apply consensus methods on accounting for GHG removals as soon as they are available, such as the EU Carbon Removals and Carbon Farming Certification (CRCF) Regulation(*);

(b) (AR 58(d) amended) include in the calculation the removals from operations that it owns, controls or contributes to, that have not been sold to another party through carbon credits, and that are not double counted or reported;

(c) (AR 58(f) amended) account for the GHG emissions associated with a removal activity, including transport and storage, under ESRS E1-8; and

(d) (AR 59 amended) include in the calculation the removal activities in the upstream and downstream value chain that the undertaking is actively contributing to, e.g., through a cooperation project with a supplier.

AR 28 for para. 33

(Carbon credits)

(AR 63 amended) When preparing the information on carbon credits, the undertaking shall:

(a) (AR 63(a) amended) consider recognised quality standards for carbon credits;

(b) (AR 63(c) amended) in order to avoid double counting, not include carbon credits issued from GHG emission reduction projects nor GHG emission removal projects within its own operations or upstream and downstream its value chain; and

(c) (AR 63(g) amended) calculate the amount of carbon credits to be cancelled in the future as the sum of carbon credits in metric tonnes of CO2eq over the duration of existing contractual agreements

AR 29 for paras. 38–41

(Calculation approaches)

(AR 69 amended) When disclosing the information required under paragraphs 38 to 41, the undertaking shall adopt the following approaches:

(a) consider the time horizons (short-, medium- and long-term) over which the effects of climate-related risk and opportunities could reasonably be expected to occur;

(b) include all of the types of the undertaking’s own physical assets, including finance-lease / the underlying asset of the right-of-use assets;

(c) present the monetary amounts (or percentages) as either a single amount or range;

(d) present the carrying amount of assets as of the reporting date and the net revenue as those related to the reporting period;

(e) for paragraph 39(c), present the energy efficiency class in terms of either ranges of energy consumption in kWh/m² or the Energy Performance Certificate (EPC) label class. If the undertaking cannot obtain this information without undue cost and effort, it shall disclose the total carrying amount of the real estate assets for which the energy consumption is based on internal estimates; and

(f) disclose net revenue and the carrying amount of assets, making it consistent with the financial statements.

AR 30 for paras. 38(c), 39(a) and 39(e)

(Gross vs net)

When disclosing on paragraph 38(c), 39(a) and 39(e), the undertaking shall explain whether the amount is assessed before or after mitigation actions.

AR 31 for para. 39(d)

(Estimated potential liabilities)

If the undertaking discloses the information prescribed under 39(d) in its financial statement, it shall refer to it.

AR 32 for paras. 40

(Location of assets)

When disclosing the methodology applied to quantify the amounts disclosed under paragraphs 38 and 39, the undertaking shall include where relevant the location of its assets at material physical risks aggregated in a way that support faithful representation of its risks.