5 Key Questions to Understand ESRS 2 Sustainability Reporting

1. What is the main objective of ESRS 2?

ESRS 2 sets out sustainability disclosure requirements applicable to all undertakings, regardless of their sector of activity. It covers reporting areas and minimum requirements related to policies, actions, targets, and metrics to ensure transparency and compliance with sustainability principles.

2. What is the role of governance in sustainability reporting according to ESRS 2?

Governance includes the supervision and control by administrative, management and control bodies on the identification and management of impacts, risks and opportunities related to sustainability. It also includes information on the integration of sustainable performance into incentive systems and the monitoring of sustainability goals.

3. How is the business strategy described?

The business strategy must include details about the business model, value chain, and impact of sustainability issues. This includes strategic changes, the influence of stakeholder interests, the management of risks and opportunities, and the resilience of the company in the face of these challenges.

4. What is meant by “double materiality” in the context of the rule?

The principle of double materiality assesses both the impact of the company on people and the environment, and the effects of sustainability issues on the financial position of the company. This approach guides the identification and prioritization of relevant impacts, risks and opportunities.

5. What are the minimum disclosure requirements under ESRS 2?

ESRS 2 requires companies to provide information on:

– Policies adopted to manage sustainability issues.

– Actions and resources used to address risks and opportunities.

– Metrics to assess the effectiveness of policies.

– Objectives established for monitoring sustainability performance.