The Corporate Sustainability Reporting Directive (CSRD) is the EU law that requires in-scope companies to publish audited sustainability information in their management report; the European Sustainability Reporting Standards (ESRS) set out what that information must contain.
What CSRD and ESRS are
The two work as a pair. The CSRD (Directive (EU) 2022/2464) sets out who reports, from when, where the information goes and what assurance it needs. The ESRS, drafted by EFRAG and adopted by the European Commission, set out what to report, how to decide what is material and which data points to include. Sustainability information sits in the management report, is digitally tagged and needs limited assurance.
Who is in scope after Omnibus I
The Omnibus I Directive, in force since 18 March 2026, narrowed the scope considerably:
- EU companies with more than 1,000 employees and net turnover above €450 million.
- Non-EU groups with more than €450 million of EU turnover and an EU subsidiary or branch with turnover above €200 million.
- Assurance stays at limited assurance; the planned move to reasonable assurance was dropped.
- Value chain requests to companies with up to 1,000 employees are capped at what the voluntary standard requires, and those companies may decline requests beyond it.
Member States must transpose the changes into national law, so check local timing for your entities.
How ESRS is structured
ESRS consists of two cross-cutting standards and ten topical standards:
- ESRS 1 (general requirements, including double materiality) and ESRS 2 (general disclosures on governance, strategy and impact, risk and opportunity management).
- Environment: E1 Climate change, E2 Pollution, E3 Water and marine resources, E4 Biodiversity, E5 Resource use and circular economy.
- Social: S1 Own workforce, S2 Workers in the value chain, S3 Affected communities, S4 Consumers and end-users.
- Governance: G1 Business conduct.
Topical standards apply based on a double materiality assessment. A company that concludes climate change is not material must explain why in detail, so energy-intensive companies effectively always report under E1. The Commission has also been simplifying the ESRS and reducing the number of data points, so check which version a request refers to.
What ESRS E1 asks for on emissions
- Gross Scope 1 emissions in tCO₂e, and the share covered by regulated emission trading schemes.
- Gross Scope 2 emissions, both location-based and market-based.
- Gross Scope 3 emissions for each significant category, with excluded categories explained.
- Total emissions, separating the consolidated group from other operations the company controls.
- GWPs from the latest IPCC assessment.
E1 also covers the transition plan, targets, energy consumption, removals and carbon credits, internal carbon pricing and anticipated financial effects.
ESRS and IFRS S2 compared
| ESRS | IFRS S2 | |
|---|---|---|
| Materiality | Double materiality, all ESG topics | Financial materiality, climate standard |
| Location | Management report, with limited assurance and tagging under CSRD | Set by each jurisdiction |
| Industry metrics | None mandated | Required |
| Scope 2 | Location-based and market-based | Location-based, plus contractual instrument information |
| Scope 3 | Significant categories | All 15 categories considered |
| Targets and credits | Gross targets; credits shown separately | Net targets allowed alongside gross targets |
The IFRS Foundation and EFRAG have published interoperability guidance showing that a company reporting climate information under ESRS can meet most IFRS S2 requirements with a limited number of additions. Neither standard automatically satisfies the other.
How companies respond
- Confirm which ESRS version and requirement numbering your customer or parent company is using.
- Start from one dataset and keep reconciling items separately: market-based Scope 2 for ESRS, industry metrics for IFRS S2.
- Check that supplier data requests stay within the value chain cap.
Aentscope calculates Scope 1, 2 and 3 from one dataset, keeps evidence ready for assurance and maps data to ESRS E1 and IFRS S2 disclosure requirements.
Related regulations and standards
| Type | Name | Relevance |
|---|---|---|
| EU directive | Corporate Sustainability Reporting Directive (CSRD) | Reporting obligation, scope, assurance, tagging |
| EU standard | European Sustainability Reporting Standards (ESRS) | Disclosure content, ESRS E1 |
| EU directive | Omnibus I Directive | Scope reduction and value chain cap |
| Joint guidance | ESRS–ISSB interoperability guidance (IFRS Foundation and EFRAG) | Mapping between ESRS and IFRS S2 |