Questions & Answers
What are concrete examples of potential entity-specific sustainability matters and any guidance related to finding and dealing with such?
- Entity-specific disclosures
Background
ESRS 1 chapter 10.1 ‘Transitional provision related to entity-specific disclosures’ states in its paragraphs the following:
‘130. The extent to which sustainability matters are covered by ESRS is expected to evolve as further Disclosure Requirements are developed. Therefore, the need for entity-specific disclosures is likely to decrease over time, in particular as a result of the future adoption of sector specific standards.
131. When defining its entity-specific disclosures, the undertaking may adopt transitional measures for their preparation in the first three annual sustainability statements under which it may as a priority:
(a) introduce in its reporting those entity-specific disclosures that it reported in prior periods, if these disclosures meet or are adapted to meet the qualitative characteristics of information referred to under chapter 2 of this Standard; and
(b) complement its disclosures prepared on the basis of the topical ESRS with an appropriate set of additional disclosures to cover sustainability matters that are material for the undertaking in its sector(s), using available best practice and/or available frameworks or reporting standards, such as IFRS industry-based guidance and GRI Sector Standards.’
ESRS 1 paragraph AR 4 and 5 state:
‘AR 4. When developing its entity-specific disclosures, the undertaking shall carefully consider: comparability between undertakings, while still ensuring relevance of the information provided, recognising that comparability may be limited for entity-specific disclosures. The undertaking shall consider whether the available and relevant frameworks, initiatives, reporting standards and benchmarks (such as technical material issued by the International Sustainability Standards Board or the Global Reporting Initiative) provide elements that can support comparability to the maximum extent possible.
AR 5. Further guidance for developing entity-specific disclosures can be found by considering the information required under topical ESRS that addresses similar sustainability matters.’
Answer
At this stage, it is not possible to provide concrete examples as this will depends on facts and circumstances of the reporting undertaking, including the sector(s) it is operating in. Sector-specific sustainability matters will be addressed in the future sector standards still to be finalized.
When developing entity-specific disclosures (ESRS 1, paragraph 11), ESRS 1 points to ‘available and relevant frameworks, initiatives, standards, benchmarks’. Two examples are provided as possible sources of relevant entity-specific disclosures (see ESRS 1 paragraph 131 (b)): the IFRS industry-based guidance and the GRI Sector Standards.
The IFRS industry-based guidance is the former SASB standards; they can be found here: https://sasb.org/standards/download/ and GRI Sector Standards can be downloaded from https://www.globalreporting.org/standards/sector-program/
These two sources offer examples of sector-specific information that could complement on an entity-specific basis the information required in sector-agnostic ESRS depending on the relevant sector.
In general, there are two types of instances that will give rise to entity-specific information:
(a) when the undertaking identifies a material matter that is not covered by Disclosure Requirements in ESRS; and
(b) when, for a matter that is covered by Disclosure Requirements in ESRS, the undertaking concludes that in order to provide information that meets the qualitative characteristics of the information (Appendix B of ESRS 1) additional disclosures need to be included. This may be the case for a specific aspect of a sub-subtopic (see AR 16 of ESRS 1) when such a sub-subtopic is covered in ESRS but the specific aspects (i.e., an additional level of granularity) is not covered. This may also be the case for a specific metric that is not included in ESRS, but considering the specific facts and circumstances of the undertaking, this metric is necessary in order to provide the appropriate quality of information.
The entity-specific information may relate to the description of a material impact, risk or opportunity (along the lines of ESRS 2 SBM 3), it may relate to policies, actions and targets that the undertaking has set, or it may relate to metrics.
Relations
Paragraph | Content |
|---|---|
10.1 Transitional provision related to entity-specific disclosures | |
10.1 Transitional provision related to entity-specific disclosures | |
10.1 Transitional provision related to entity-specific disclosures | |
Further guidance for developing entity-specific disclosures can be found by considering the information required under topical ESRS that addresses similar sustainability matters. | |
When developing its entity-specific disclosures, the undertaking shall carefully consider: | |
Sector-specific standards are applicable to all undertakings within a sector. They address impacts, risks and opportunities that are likely to be material for all undertakings in a specific sector and that are not covered, or not sufficiently covered, by topical standards. Sector-specific standards are multi-topical and cover the topics that are most relevant to the sector in question. Sector-specific standards achieve a high degree of comparability. | |
Further guidance for developing entity-specific disclosures can be found by considering the information required under topical ESRS that addresses similar sustainability matters. | |
When developing its entity-specific disclosures, the undertaking shall carefully consider: | |
Sector-specific standards are applicable to all undertakings within a sector. They address impacts, risks and opportunities that are likely to be material for all undertakings in a specific sector and that are not covered, or not sufficiently covered, by topical standards. Sector-specific standards are multi-topical and cover the topics that are most relevant to the sector in question. Sector-specific standards achieve a high degree of comparability. | |
Further guidance for developing entity-specific disclosures can be found by considering the information required under topical ESRS that addresses similar sustainability matters. |