EFRAG publishes first draft standards for Sustainability Reporting

EFRAG publishes first draft standards for Sustainability Reporting

Authors: Prof. Dr. Christian Zwirner, Dr. Corinna Boecker
EFRAG publishes first draft standards for Sustainability Reporting

Sustainability reporting has achieved another milestone: on April 29, 2022, the European Financial Reporting Advisory Group (EFRAG) presented the first drafts of European Sustainability Reporting Standards (ESRS) via the Project Task Force on European Sustainability Reporting Standards (PTF-ESRS).

Already in 2019, the “European Green Deal” was adopted as key component of Europe's climate policy. Among other things, the EU Commission hereby set itself the ambitious goal of climate neutrality for Europe by the year 2050. Against this background, on April 21, 2021, the European Commission published a draft for the so called "Corporate Sustainability Reporting Directive (CSRD)" which has been discussed extensively ever since. Following a preliminary agreement in June 2022, the formal adoption of the final directive text is expected in the upcoming weeks.

A significant innovation is the future mandatory application of unified EU reporting standards for sustainability reporting purposes. So far, there are no concrete requirements in this regard, leading in reporting practice to great heterogeneity of published sustainability reports concerning content, detail level and format. To increase the comparability of published sustainability-relevant information of different companies, the sustainability reports are henceforth to be prepared in accordance with unified EU standards and to be integrated into the (group) management report on a mandatory base.

Given this fact, on April 25, 2022, the Project Task Force on European Sustainability Reporting Standards (PTF-ESRS) adopted 13 exposure drafts for new European Sustainability Reporting Standards (ESRS) and submitted them to the European Financial Reporting Advisory Group (EFRAG).

A 100-day public consultation process ended on August 8, 2022, was launched by EFRAG releasing these draft standards on April 29, 2022. Said consultation took place by means of a standardized questionnaire. The feedback on around 1,200 individual questions (including drafts’ structure and content as well as appropriateness of reporting requirements) was requested online.

The proposed standard structure is based on the CSRD draft. In principle, the ESRS can be classified into three categories:

  • cross-cutting standards,
  • thematic standards,
  • sector-specific standards (drafts to follow in October 2023).

The current 13 draft standards contain aspects on general requirements and principles (ESRS 1 and 2) as well as on environment (ESRS E1 to ESRS E5), social (ESRS S1 to ESRS S4) and governance (ESRS G1 to G2) affairs. They cover a total of around 140 individual disclosure requirements, supplemented by additional application guidelines.

The following paragraph provides an overview of the individual draft standards:

Cross-cutting standards:

  • ESRS 1: general principles
  • ESRS 2: general, strategy, governance and materiality assessment desclosure requirements


  • ESRS E1: climate change
  • ESRS E2: pollution
  • ESRS E3: water and marine resources
  • ESRS E4: biodiversity and ecosystems
  • ESRS E5: resource use and circular economy


  • ESRS S1: own workforce
  • ESRS S2: workers in the value chain
  • ESRS S3: affected communities
  • ESRS S4: consumers and end-users


  • ESRS G1: governance, risk management and internal control
  • ESRS G2 business conduct

Within the draft standards, the concept of materiality plays a key role. These draft standards stipulate that companies must report their sustainability information in accordance with the principle of double materiality. Double materiality, according to the ESRS drafts, includes so-called impact materiality (environmental or social impact/influence of the company) and financial materiality (material financial impact of sustainability aspects on the company).

Following the public consultation, EFRAG will revise the ESRS and submit the final drafts to the European Commission, probably on November 15, 2022. Sector-specific standards and standards for small and medium-sized entities are to follow in 2023.