Questions & Answers
When completing the narrative response for the ‘Description of the key products and materials that come out of the undertaking’s production process’, can the quantitative metrics that are also required to be disclosed be included (i.e., the total waste generated in mass)? Additionally, can derivative metrics that are not required but that provide additional detail such as total waste to revenue or total waste to enterprise value be included in the narrative response?
- Quantitative metrics
- resource outflows
- ESRS E5 Disclosure Requirement E5-5
Background
ESRS E5-5 states that an undertaking shall disclose information on its resource inflows, including waste, related to its material impacts, risks and opportunities.
ESRS 1 paragraph 19 states that: ‘When preparing its sustainability statement, the undertaking shall apply:
(a) the fundamental qualitative characteristics of information, i.e. relevance and faithful representation; and
(b) the enhancing qualitative characteristics of information, i.e. comparability, verifiability and understandability.’
ESRS 1 paragraph 11 states: ‘In addition to the disclosure requirements laid down in the three categories of ESRS, when an undertaking concludes that an impact, risk or opportunity is not covered or not covered with sufficient granularity by an ESRS but is material due to its specific facts and circumstances, it shall provide additional entity-specific disclosures to enable users to understand the undertaking’s sustainability-related impacts, risks or opportunities . Application requirements AR 1 to AR 5 provide further guidance regarding entity-specific disclosures.’
ESRS 2 paragraph 73 states: ‘The undertaking shall apply the requirements for the content of disclosures in this provision when it discloses on the metrics it has in place with regard to each material sustainability matter.’
ESRS 2 paragraph 75 states that: ‘The undertaking shall disclose any metrics that it uses to evaluate performance and effectiveness, in relation to a material impact, risk or opportunity.’
Answer
Yes, it is allowed, or even required, on an entity-specific basis following ESRS 1 paragraph 11, to include quantitative data in the description of resource inflows, and to disclose additional non-standardised metrics when such quantitative data are needed to enable users to understand the undertaking’s material sustainability-related impacts, risks or opportunities. This approach is not only valid for the disclosures in E5-5 but in general for all the qualitative disclosures in ESRS.