Questions & Answers
What does ‘resources allocated’ refer to specifically in each ESRS? Does it require at a minimum the disclosure of which departments or specific teams are in charge and/or the total budget allocated for that specific topic?
- MDR-Actions
- resources allocated
Background
ESRS 2 paragraph 66 states: ‘The undertaking shall apply the requirements for the content of disclosures in this provision when it describes the actions through which it manages each material sustainability matter, including action plans and resources allocated and/or planned.’
ESRS 2 paragraph 69 states: ‘Where the implementation of an action plan requires significant operational expenditures (Opex) and/or capital expenditures (Capex), the undertaking shall:
(a) describe the type of current and future financial and other resources allocated to the action plan, including, if applicable, the relevant terms of sustainable finance instruments, such as green bonds, social bonds and green loans, the environmental or social objectives, and whether the ability to implement the actions or action plan depends on specific preconditions, e.g. granting of financial support or public policy and market developments;
(b) provide the amount of current financial resources and explain how they relate to the most relevant amounts presented in the financial statements; and
(c) provide the amount of future financial resources.’
ESRS 2 paragraph AR 23 states: ‘Information on resource allocation may be presented in the form of a table and broken down between capital expenditure and operating expenditure, and across the relevant time horizons, and between resources applied in the current reporting year and the planned allocation of resources over specific time horizons.’
ESRS S1-S4 (e.g. ESRS S1 paragraph AR 48) state: ‘When disclosing the resources allocated to the management of material impacts, the undertaking may explain which internal functions are involved in managing the impacts and what types of action they take to address negative and advance positive impacts.’
Because ESRS E1-E5, S1-S4 have numerous other references to ‘resources allocated’ when requiring disclosures, they are not replicated in this background section (see the ESRS reference section).
Annex II Acronyms and Glossary of Terms defines ‘marine resources’ and ‘natural resources’.
Answer
The amount of current and future financial resources shall be disclosed where the implementation of an action plan requires significant operational expenditures (Opex) and/or capital expenditures (Capex). The ‘departments or specific teams in charge’, on the other hand, may be disclosed.
The ESRS 2 Minimum Disclosure Requirements (MDR) on actions and resources (ESRS 2 paragraphs 66 to 69) are to be applied together with the Disclosure Requirements, including the Application Requirements, provided in the relevant topical ESRS.
The term ‘resources allocated’ is not specifically defined in ESRS. Based on ESRS 2 paragraph 69, ‘resources allocated’ relates to significant Opex and Capex in terms of ‘financial and other resources’. Again, whilst ‘other resources’ is not defined, it can still be assumed that human resources are one major element of ‘other resources’.
The term ‘total budget allocated’ is not used in ESRS. However, the amount of current and future financial resources shall be disclosed by the undertaking in accordance with ESRS 2 paragraph 69 (b) and (c) when the implementation of an action plan requires significant Opex and/or Capex.
The undertaking may disclose the internal functions involved in managing material impacts in accordance with ESRS S1-S4 (e.g. ESRS S1 paragraph AR 48); this might include the ‘departments or specific teams in charge’ when disclosing resources allocated to the management of material impacts. There is no equivalent voluntary Disclosure Requirement in ESRS E1 to E5.
To note: regarding Minimum Disclosure Requirements on policies (ESRS 2 paragraph 65), ‘The undertaking shall disclose information about policies adopted to manage material sustainability matters. This information shall include:
(a) the most senior level in the undertaking’s organisation that is accountable for the implementation of a policy …’.
Relations
Paragraph | Content |
|---|---|
When disclosing the resources allocated to the management of material impacts, the undertaking may disclose which internal functions are involved in managing the impacts and what types of action they take to address negative and advance positive impacts. | |
The undertaking shall disclose what resources are allocated to the management of its material impacts with information that enables users to gain an understanding of how the material impacts are managed. | |
The undertaking shall provide a summarised description of the action plans and resources to manage its material impacts, risks, and opportunities related to consumers and end-users as per ESRS 2 MDR-A Actions and resources in relation to material sustainability matters. | |
When disclosing the resources allocated to the management of material impacts, the undertaking may disclose which internal functions are involved in managing the impacts and what types of action they take to address negative and advance positive impacts. | |
The undertaking shall disclose what resources are allocated to the management of its material impacts, with information that enables users to gain an understanding of how the material impacts are managed. | |
The objective of this Disclosure Requirement is twofold. Firstly, it is to enable an understanding of any actions or initiatives through which the undertaking seeks to: | |
When disclosing the resources allocated to the management of material impacts, the undertaking may explain which internal functions are involved in managing the impacts and what types of action they take to address negative and advance positive impacts. | |
The undertaking shall disclose what resources are allocated to the management of its material impacts, with information that allows users to gain an understanding of how the material impacts are managed. | |
The undertaking shall provide a summarised description of the action plans and resources to manage its material impacts, risks, and opportunities related to its own workforce in accordance with ESRS 2 MDR-A Actions and resources in relation to material sustainability matters. | |
Information on resource allocation may be presented in the form of a table and broken down between capital expenditure and operating expenditure, and across the relevant time horizons, and between resources applied in the current reporting year and the planned allocation of resources over specific time horizons. |