In advance:
There is currently some uncertainty in ESRS reporting as a result of the European Commission’s omnibus proposals. Nevertheless, it is worth staying on the sustainability ball – be it out of inner conviction, because of pressure from banks & customers or to be attractive to investors and talent on the labor market.
Regardless of what comes out of the omnibus, the basic content of this guide is still relevant, even if individual details have changed. The steps described will not be affected by the scope of the simplified ESRS, which is expected at the end of the year.
As always, you can rest assured that at Code Gaia we implement jurisdictional adjustments directly into our software to best support SMEs in their sustainability efforts.
In this blog article, we want to discuss Appendix C of the ESRS1, which contains a number of transitional provisions that allow companies to defer full disclosure of certain information, even if it is material.
The phase-in provisions are specified by topic and individual disclosure requirements. In addition, the phase-in provisions are partly dependent on the size or type of the reporting company.
Appendix C is buried deep within the ESRS, so the entire appendix has been reproduced here in standalone form for ease of reference. This content comes directly from Brussels, 31.7.2023, C(2023) 5303 final, ANNEX 1.
Appendix C: List of step-by-step disclosure requirements
This annex is an integral part of ESRS 1 and is just as binding as the other parts of the standard.
| ESRS | Duty of disclosure | Full name of the disclosure obligation | Gradual introduction or date of entry into force (incl. 1st year) |
|---|---|---|---|
| ESRS 2 | SBM-1 | Strategy, business model and value chain | The entity shall submit the information required by ESRS 2 SBM-1 paragraph 40(b) (breakdown of total revenue by main ESRS sectors) and paragraph 40(c) (list of additional relevant ESRS sectors) from the date of application specified in the Commission delegated act to be adopted pursuant to Article 29b(1), third subparagraph, point (ii) of Directive 2013/34/EU. |
| ESRS 2 | SBM-3 | Significant effects, risks and opportunities and their interaction with strategy and business model | The entity may omit the disclosures required by ESRS 2 SBM-3 paragraph 48(e) (expected financial impact) in the first year of preparing its sustainability statement. The company may, in accordance with ESRS 2 SBM-3 paragraph 48 letter e, provide only qualitative disclosures in the first three years of preparing its sustainability statement if it is not practicable to provide quantitative disclosures. |
| ESRS E1 | E1-6 | Gross GHG emissions in Scope 1, 2 and 3 categories and total GHG emissions | Companies or groups that do not exceed the average number of 750 employees during the financial year (on a consolidated basis, if applicable) on the balance sheet date may omit the data points on Scope 3 emissions and total GHG emissions in the first year of preparing their sustainability statement. |
| ESRS E1 | E1-9 | Expected financial impact of material physical and transition risks and potential climate-related opportunities | The company may omit the disclosures required by ESRS E1-9 in the first year of preparing its sustainability statement. In accordance with ESRS E1-9, the company may only provide qualitative disclosures in the first three years of preparing its sustainability statement if it is not practicable to provide quantitative disclosures. |
| ESRS E2 | E2-6 | Expected financial impact due to pollution-related impacts, risks and opportunities | The company may omit the disclosures required by ESRS E2-6 in the first year of preparing its sustainability statement. With the exception of the information required in paragraph 40(b) on operating and capital expenditures incurred during the reporting period in connection with major incidents and deposits, the company may also comply with the provisions of ESRS E2-6 in the first three years of preparing its sustainability statement by providing only qualitative information. |
| ESRS E3 | E3-5 | Expected financial impact from impacts, risks and opportunities related to water and marine resources. | The company may omit the information required by ESRS E3-5 in the first year of preparing its sustainability statement. In accordance with ESRS E3-5, the company can only provide qualitative information in the first three years of preparing its sustainability statement. |
| ESRS 4 | All disclosure requirements | All disclosure requirements | Companies or groups that do not exceed the average number of 750 employees during the financial year (on a consolidated basis, if applicable) on the balance sheet date may omit the information required by the disclosure requirements of ESRS E4 in the first two years of preparing their sustainability statement. |
| ESRS E4 | E4-6 | Expected financial implications from impacts, risks and opportunities related to biodiversity and ecosystems. | The company may omit the disclosures required by ESRS E4-6 in the first year of preparing its sustainability statement. The company can comply with ESRS E4-6 by providing only qualitative information in the first three years of preparing its sustainability statement. |
| ESRS E5 | E5-6 | Expected financial impact related to the use of resources and circular economy impacts, risks and opportunities. | The company may omit the disclosures required by ESRS E5-6 in the first year of preparing its sustainability statement. The company can comply with ESRS E5-6 by providing only qualitative information in the first three years of preparing its sustainability statement. |
| ESRS S1 | All disclosure requirements | All disclosure requirements | Entities or groups that do not exceed the average number of 750 employees during the financial year (on a consolidated basis, if applicable) at the reporting date may disclose the information required by ESRS S1 in the first year of preparation. |
| ESRS S1 | S1-7 | Characteristics of non-employees in the company’s own workforce | The company may omit reporting for all data points in this disclosure requirement in the first year of preparing its sustainability statement. |
| ESRS S1 | S1-8 | Social protection | In the first year of preparing its sustainability declaration, the company may omit this disclosure requirement in relation to its own workforce in non-EEA countries. |
| ESRS S1 | S1-11 | Social protection | In the first year of preparing its sustainability declaration, the company may omit this disclosure requirement in relation to its own workforce in non-EEA countries. |
| ESRS S1 | S1-12 | Percentage of employees with disabilities | The company may omit the disclosures required by ESRS S1-12 in the first year of preparing its sustainability statement. |
| ESRS S1 | S1-13 | Training and skills development | The company may omit the disclosures required by ESRS S1-13 in the first year of preparing its sustainability statement. |
| ESRS S1 | S1-14 | Health protection and safety | The company can omit the data points on work-related illnesses and the number of days lost due to injuries, accidents, fatalities and work-related illnesses in the first year of preparing its sustainability declaration. |
| ESRS S1 | S1-14 | Health protection and safety | The company may omit reporting on non-employees in the first year of preparing its sustainability declaration. |
| ESRS S1 | S1-15 | Work-life balance | The company may omit the disclosures required by ESRS S1-15 in the first year of preparing its sustainability statement. |
| ESRS S2 | All disclosure requirements | All disclosure requirements | Companies or groups that do not exceed the average number of 750 employees during the financial year (on a consolidated basis, if applicable) on the balance sheet date may omit the information required by the disclosure requirements of ESRS S2 in the first two years of preparing their sustainability statement. |
| ESRS S3 | All disclosure requirements | All disclosure requirements | Companies or groups that do not exceed the average number of 750 employees during the financial year (on a consolidated basis, if applicable) on the balance sheet date may omit the information required by the disclosure requirements of ESRS S3 in the first two years of preparing their sustainability statement. |
| ESRS S4 | All disclosure requirements | All disclosure requirements | Companies or groups that do not exceed the average number of 750 employees during the financial year (on a consolidated basis, if applicable) on the balance sheet date may omit the information required in the disclosure requirements of ESRS S4 in the first two years of preparing their sustainability statement. |
Read our blog post to find out how you can best read the European Sustainability Reporting Standards (ESRS).
Code Gaia was one of the first solutions to implement the full ESRS in its software. Arrange a no-obligation demo with us to find out more about our solution.
