The European Sustainability Reporting Standards (ESRS) represent a crucial component of the European Union’s efforts to increase corporate accountability in sustainability. As part of the Corporate Sustainability Reporting Directive (CSRD), specific ESRS data points are introduced that businesses must report on to demonstrate their environmental, social, and governance (ESG) practices.
For companies subject to the CSRD, mastering these data points is not just about compliance—it’s about gaining stakeholder trust, enhancing corporate reputation, and contributing to the EU’s broader sustainability goals. This guide will walk you through the essentials of ESRS data points, how they impact businesses, and the key things you need to know to ensure you’re fully prepared for reporting.
The importance of ESRS data points
Why ESRS data points matter
In today’s business landscape, sustainability reporting is no longer optional—it’s essential. ESRS data points are the core of transparent and consistent sustainability disclosures. They provide a framework that enables businesses to report on their ESG performance in a clear, standardized way, allowing stakeholders—from regulators to investors—to compare companies across sectors.
For businesses, this goes beyond mere regulatory compliance. Accurate and transparent reporting on ESRS data points can:
- Enhance corporate reputation by showing a commitment to sustainable practices.
- Build investor confidence by providing clear, data-backed insights into ESG performance.
- Reduce risks by identifying potential areas of improvement, such as environmental impact or social responsibility practices.
- Ensure access to capital, as more investors prioritize ESG factors when making financial decisions.
The role of ESRS data points in creating standardized reporting ensures that businesses of all sizes and industries can contribute to a more sustainable economy while adhering to CSRD implementation guidelines.
Who Needs to Report on ESRS Data Points?
Under the CSRD, the scope of businesses required to report on ESRS data points has significantly expanded. Large companies—defined as those exceeding two of the following three criteria are required to comply:
- more than 250 employees,
- €50 million in turnover, or
- €25 million in total assets
Additionally, listed companies, including SMEs (small and medium-sized enterprises) and non-EU companies with significant operations in the EU, are also subject to the CSRD.
However, not every company will need to report on every ESRS data point. A key principle guiding ESRS reporting is materiality. This means that companies need to conduct a double materiality assessment to determine which sustainability issues are relevant (or “material”) to their business and it’s value chain. If a specific issue, like water management or biodiversity, does not have a material impact on the company or the company has no significant impact on that topic, then the corresponding ESRS data points may not need to be disclosed.
Materiality assessments help businesses focus on the data points that are most relevant to their strategy and operations, ensuring that reporting is both efficient and meaningful. The Materiality Master offers one of the best double materiality assessment software solutions, and definitely the most affordable option.
How to determine the material ESRS data points for your CSRD report
Step 1: Conduct a Materiality Assessment
The first and most critical step in determining which ESRS data points are relevant to your report is conducting a materiality assessment. This process involves evaluating both the impact your business has on sustainability factors and how sustainability issues impact your business.
Double materiality is a key principle in ESRS reporting. It emphasizes that companies must assess:
- Impact materiality: How your operations affect environmental, social, and governance factors (e.g., carbon emissions, labor practices, community impact).
- Financial materiality: How sustainability factors affect your business’s financial performance (e.g., climate risks, resource scarcity).
The ESRS AR 16 list provides guidance which topics need to be assessed. Organizations need to identify and rate IROs (impacts, risks, and opportunities). By analyzing both dimensions, businesses can prioritize the data points that have the most significance for their business and stakeholders. The outcome of the materiality analysis is a list of material topics, sub-topics, and sub-sub-topics. The material topics are often illustrated in a materiality matrix.
Step 2: Review and understand the EFRAG data points list
The European Financial Reporting Advisory Group (EFRAG) transposed the requirements of the European Sustainability Reporting Standards into an Excel spreadsheet listing all data points. The document indicates the following information:
- Corresponding ESRS paragraph
- Data type
- Voluntary or mandatory data point
- Phasing-in provisions
Step 3: Map the data points to the material topics
The next step is to map data points to the sub-(sub-)topics. Unfortunately, the EFRAG has not created a direct link in their Excel sheet between the topics and the data points. However, they have published a draft document about “Links between AR16 and Disclosure requirements”.
Important notes:
- There is also no one-to-one connection between data points and sub-(sub-)topics.
- The environmental standards (E1-E5) contain a few data points that are to be disclosed irrespective of the outcome of its materiality assessment.
- Some data points are subject to a phasing-in, meaning they might not be mandatory for the first reporting year or sometimes even the first three years.
- Some data points are considered conditional or alternative, meaning they are not mandatory for every company. These data points are typically linked to specific conditions, such as having a relevant policy or target.
Do you want to avoid manually mapping the data points for multiple days? Use our ESRS Data Points Mapper tool and get the relevant data points for your report with just one click. CSRD experts have validated our mapping algorithm.
Step 4: Benchmark against industry peers (optional)
To ensure your report is aligned with industry expectations, benchmark your ESRS data points against other companies in your sector. Industry best practices and peer reports can help you identify which data points are most commonly reported and which emerging issues you should be aware of.
Use tools like:
- Sustainability reporting platforms and materiality assessment tools (e.g., Materiality Master)
- Industry associations and their sustainability guidelines
- Competitor analysis of published ESG reports
- CSRD Benchmark studies
Benchmarking helps you stay competitive and ensures you are not overlooking key sustainability issues that stakeholders expect from your industry.
Upcoming changes and updates
As the ESRS framework evolves, businesses can expect several key updates and changes that will further shape sustainability reporting in the coming years:
- Expansion of Scope: Currently, the CSRD applies to large companies, but it’s expected that more SMEs and even non-EU companies operating within the EU will need to comply with ESRS over time. This will widen the pool of businesses subject to sustainability reporting, requiring them to address ESRS data points as part of their compliance efforts.
- Sector-Specific Standards: The European Commission is working on sector-specific ESRS standards, which will tailor data point requirements to industries with unique sustainability challenges. For example, industries like finance, manufacturing, and agriculture may have specialized data points addressing their specific ESG impacts.
- Tighter Integration with Global Reporting Standards: In an effort to streamline sustainability reporting globally, the EU is working on aligning ESRS with other major frameworks, such as the Global Reporting Initiative (GRI) and the Task Force on Climate-related Financial Disclosures (TCFD). This integration will allow businesses to meet multiple reporting obligations with a single, consistent report.
- Increased Emphasis on Digital Reporting: As the reporting process becomes more digitalized, businesses may need to submit their ESRS reports in machine-readable formats, such as XBRL (eXtensible Business Reporting Language). This shift will enable easier analysis and comparison of sustainability data across companies and sectors.
Preparing for what’s next
To stay ahead of upcoming changes and ensure your business is future-proof in its ESRS reporting, ensure to stay Informed. Regularly review updates from the European Commission and EFRAG to stay on top of changes to the ESRS framework. Subscribe to relevant industry newsletters (e.g., CSRD Kompass) and attend ESG reporting webinars and conferences.
By keeping an eye on future ESRS developments and making strategic adjustments now, businesses can ensure they remain compliant, competitive, and leaders in the evolving sustainability landscape.
