Questions & Answers
For a material matter, if the undertaking assesses that a Disclosure Requirement is not material, is it possible to conclude that a datapoint of such Disclosure Requirement is material and therefore included?
- Metrics
- non-material Disclosure Requirement
- datapoints
Background
The question received was ‘When doing the translation from the double materiality assessment’s outcomes to Disclosure Requirements and datapoints (regarding a metric), is it possible that datapoints are in scope when the related Disclosure Requirement is out of scope (non-material Disclosure Requirement)?’ and was reworded for clarity.
The following background to the question was provided by the submitter: ‘After the double materiality assessment, we translate the outcomes to which disclosure requirements are applicable. Thereafter, we assess which datapoints are applicable. The question arises whether specific datapoints within a disclosure requirement that is assessed to be out of scope could be in scope. So, for example, ESRS S1-14 is out of scope, but one of the datapoints is in scope / the company wants to report on it. Is that possible?’
ESRS 1 paragraph 16 states: ‘ESRS structure the information to be disclosed under Disclosure Requirements. Each Disclosure Requirement consists of one or more distinct datapoints. The term “datapoint” can also refer to a narrative sub-element of a Disclosure Requirement.’
ESRS 1 paragraph 31 states: ‘The applicable information prescribed within a Disclosure Requirement, including its datapoints, or an entity-specific disclosure shall be disclosed when the undertaking assesses, as part of its assessment of material information, that the information is relevant from one or more of the following perspectives:
(a) the significance of the information in relation to the matter it purports to depict or explain; or
(b) the capacity of such information to meet the users’ decision-making needs, including the needs of primary users of general-purpose financial reporting described in paragraph 48 and/or the needs of users whose principal interest is in information about the undertaking’s impacts.’
ESRS 1 paragraph 34 states: ‘When disclosing information on metrics for a material sustainability matter according to the Metrics and Targets section of the relevant topical ESRS, the undertaking:
(a) shall include the information prescribed by a Disclosure Requirement if it assesses such information to be material; and
(b) may omit the information prescribed by a datapoint of a Disclosure Requirement if it assesses such information to be not material and concludes that such information is not needed to meet the objective of the Disclosure Requirement.’
Answer
No, it is not possible for a datapoint(s) to be material and for the related Disclosure Requirement not to be material when disclosing information on metrics.
ESRS structure the information to be disclosed under Disclosure Requirements, and each Disclosure Requirement consists of one or more distinct datapoints (ESRS 1 paragraph 16). One datapoint (or more) related to a Disclosure Requirement in a topical standard assessed as material makes that Disclosure Requirement material. Conversely, if all datapoints of a topical Disclosure Requirement are assessed as not material, the related topical Disclosure Requirement is not material.
However, it may be possible to conclude that an individual datapoint (or datapoints) are not material while the corresponding Disclosure Requirement is material. Therefore, it is possible for the entity to conclude that not all datapoints need to be provided to fulfill the information requirements for a specific Disclosure Requirement.
See also Question ID 526 and ID 1021 – Disclosure of a non-material datapoint (water-consumption in own operations) related to a (a) material and (b) non-material topic; and ID 177 – Mapping sustainability matters (ESRS 1 paragraph AR 16) with Disclosure Requirements.
Relations
Paragraph | Content |
|---|---|
When disclosing information on metrics for a material sustainability matter according to the Metrics and Targets section of the relevant topical ESRS, the undertaking: | |
The applicable information prescribed within a Disclosure Requirement, including its datapoints, or an entity-specific disclosure, shall be disclosed when the undertaking assesses, as part of its assessment of material information, that the information is relevant from one or more of the following perspectives: | |
ESRS structure the information to be disclosed under Disclosure Requirements. Each Disclosure Requirement consists of one or more distinct datapoints. The term “datapoint” can also refer to a narrative sub-element of a Disclosure Requirement. | |
When disclosing information on metrics for a material sustainability matter according to the Metrics and Targets section of the relevant topical ESRS, the undertaking: | |
The applicable information prescribed within a Disclosure Requirement, including its datapoints, or an entity-specific disclosure, shall be disclosed when the undertaking assesses, as part of its assessment of material information, that the information is relevant from one or more of the following perspectives: | |
ESRS structure the information to be disclosed under Disclosure Requirements. Each Disclosure Requirement consists of one or more distinct datapoints. The term “datapoint” can also refer to a narrative sub-element of a Disclosure Requirement. | |
The applicable information prescribed within a Disclosure Requirement, including its datapoints, or an entity-specific disclosure, shall be disclosed when the undertaking assesses, as part of its assessment of material information, that the information is relevant from one or more of the following perspectives: | |
When disclosing information on metrics for a material sustainability matter according to the Metrics and Targets section of the relevant topical ESRS, the undertaking: | |
The applicable information prescribed within a Disclosure Requirement, including its datapoints, or an entity-specific disclosure, shall be disclosed when the undertaking assesses, as part of its assessment of material information, that the information is relevant from one or more of the following perspectives: | |
ESRS structure the information to be disclosed under Disclosure Requirements. Each Disclosure Requirement consists of one or more distinct datapoints. The term “datapoint” can also refer to a narrative sub-element of a Disclosure Requirement. |