Questions & Answers
How should the sentence ‘associated with activities in high-impact sectors’ be understood? Does it exclusively refer to the sectors in which the reporting undertaking itself operates?
- Impact sectors
Background
ESRS E1 mentions the Commission Delegated Regulation (EU) 2022/1288 Annex I(9) when referring to the definition of ‘high-climate sectors’.
According to Commission Delegated Regulation (EU) 2022/1288 Annex I(9), ‘high-impact climate sectors’ means the sectors listed in Sections A to H and Section L of Annex I to Regulation (EC) No 1893/2006 of the European Parliament and of the Council.
ESRS E1 paragraph 38 states that the undertaking with operations in high-climate impact sectors shall further disaggregate their total energy consumption from fossil sources by:
(a) fuel consumption from coal and coal products;
(b) fuel consumption from crude oil and petroleum products;
(c) fuel consumption from natural gas;
(d) fuel consumption from other fossil sources; and
(e) consumption of purchased or acquired electricity, heat, steam or cooling from fossil sources.
ESRS E1 paragraph 40 states that the undertaking shall provide information on the energy intensity (total energy consumption per net revenue) associated with activities in high-climate impact sectors.
ESRS E1 paragraph AR 36 (a) provides the calculation formula in which total energy consumption from activities in high-climate impact sectors is in a numerator while net revenue from activities in high-climate impact sectors is in a denominator. Moreover, point (c) of this AR clarifies that the numerator and denominator shall only consist of the proportion of the total final energy consumption (in the numerator) and net revenue (in the denominator) that are attributable to activities in high-climate impact sectors. Finally, this point provides that, in effect, there should be consistency in the scope of both the numerator and denominator.
Answer
According to Commission Delegated Regulation (EU) 2022/1288 Annex I(9), high-climate impact sectors are those listed in NACE Sections A to H and Section L of Annex I to Regulation (EC) No 1893/2006 of the European Parliament and of the Council. The list of targeted sections is the following.
Section A: Agriculture, forestry and fishing (NACE division 01-03)
Section B: Mining and quarrying (NACE division 05-09)
Section C: Manufacturing (NACE division 10-33)
Section D: Electricity, gas, steam and air conditioning supply (NACE division 35)
Section E: Water supply; Sewerage, waste management and remediation activities (NACE division 36-39)
Section F: Construction (NACE division 41-43)
Section G: Wholesale and retail trade; Repair of motor vehicles and motorcycles (NACE division 45-47)
Section H: Transportation and storage (NACE division 49-53)
Section L: Real estate activities (NACE division 68)
It is important to note that the high-climate impact sectors are determined at the NACE code activity level (linked to the undertaking’s own operations) and not by the undertaking’s (ESRS) sector(s) of activity (as defined in ESRS 2 paragraph 40 (b)(c) and AR 13.
Relations
Paragraph | Content |
|---|---|
For the purposes of the disclosures required in paragraph 40, a group of products and/or services offered, a group of markets and/or customer groups served, or an ESRS sector, is significant for the undertaking if it meets one or both of the following criteria: | |
a list of the additional significant ESRS sectors beyond the ones reflected under paragraph 40(b), such as activities that give rise to intercompany revenues, in which the undertaking develops significant activities, or in which it is or may be connected to material impacts. The identification of these additional ESRS sectors shall be consistent with the way they have been considered by the undertaking when performing its materiality assessment and with the way it discloses material sector-specific information; | |
a breakdown of total revenue, as included in its financial statements, by significant ESRS sectors. When the undertaking provides segment reporting as required by IFRS 8 Operating segments in its financial statements, this sector revenue information shall be, as far as possible, reconciled with IFRS 8 information; | |
the numerator and denominator shall only consist of the proportion of the total final energy consumption (in the numerator) and net revenue (in the denominator) that are attributable to activities in high climate impact sectors. In effect, there should be consistency in the scope of both the numerator and denominator; | |
The undertaking shall provide information on the energy intensity (total energy consumption per net revenue) associated with activities in high climate impact sectors. | |
The undertaking with operations in high climate impact sectors shall further disaggregate their total energy consumption from fossil sources by: | |
the numerator and denominator shall only consist of the proportion of the total final energy consumption (in the numerator) and net revenue (in the denominator) that are attributable to activities in high climate impact sectors. In effect, there should be consistency in the scope of both the numerator and denominator; | |
The undertaking shall provide information on the energy intensity (total energy consumption per net revenue) associated with activities in high climate impact sectors. | |
The undertaking with operations in high climate impact sectors shall further disaggregate their total energy consumption from fossil sources by: | |
For the purposes of the disclosures required in paragraph 40, a group of products and/or services offered, a group of markets and/or customer groups served, or an ESRS sector, is significant for the undertaking if it meets one or both of the following criteria: |