ESRS — European Sustainability Reporting Standards
ESRS = the 12 European Sustainability Reporting Standards used to comply with the EU CSRD. Revised Set 1 (May 2026 draft) cuts mandatory datapoints by >60%.
Definition
The European Sustainability Reporting Standards (ESRS) are the mandatory disclosure standards companies use to comply with the EU Corporate Sustainability Reporting Directive (CSRD). ESRS are developed by EFRAG (the European Financial Reporting Advisory Group) and adopted as delegated acts by the European Commission.
The first set — ESRS Set 1 — was adopted via Commission Delegated Regulation (EU) 2023/2772 on 22 December 2023. A simplified Revised ESRS Set 1 was published as an EC consultation draft on 6 May 2026 (consultation closed 3 June 2026), reducing mandatory datapoints by more than 60% and total datapoints by more than 70%. The revised standards apply for financial years beginning on or after 1 January 2027, with an opt-in available for FY 2026.
The 12 standards of ESRS Set 1
| Standard | Topic | Type |
|---|---|---|
| ESRS 1 | General requirements | Cross-cutting |
| ESRS 2 | General disclosures | Cross-cutting |
| ESRS E1 | Climate change | Environmental |
| ESRS E2 | Pollution | Environmental |
| ESRS E3 | Water and marine resources | Environmental |
| ESRS E4 | Biodiversity and ecosystems | Environmental |
| ESRS E5 | Resource use and circular economy | Environmental |
| ESRS S1 | Own workforce | Social |
| ESRS S2 | Workers in the value chain | Social |
| ESRS S3 | Affected communities | Social |
| ESRS S4 | Consumers and end-users | Social |
| ESRS G1 | Business conduct | Governance |
The revised set (May 2026 draft) retains the 12-standard architecture but materially reduces the number of mandatory datapoints inside each standard and simplifies the materiality assessment process.
Double materiality — the framework concept ESRS uses
ESRS requires entities to disclose a sustainability matter when it meets either of two materiality limbs:
- Impact materiality — the entity has actual or potential effects (positive or negative) on people or the environment over the short, medium, or long term
- Financial materiality — the matter could reasonably be expected to affect the entity’s cash flows, development, performance, position, cost of capital, or access to finance
Either limb is sufficient. This disjunctive “either-or” is the key distinction from IFRS S1 / IFRS S2 (which uses financial materiality only) and from SEBI BRSR (which uses entity-level materiality assessment with a SEBI-prescribed mandatory-attribute list overlay). See the dedicated double materiality entry for the full framework.
The ESRS family of standards
ESRS Set 1 is one of several related standard sets in the EU sustainability reporting framework:
| Standard set | Purpose | Status |
|---|---|---|
| ESRS Set 1 | Mandatory standards for CSRD-in-scope EU large undertakings + EU-listed entities | Adopted Dec 2023 (Delegated Reg 2023/2772); being replaced by Revised ESRS Set 1 |
| Revised ESRS Set 1 | Simplified mandatory standards | Consultation closed 3 Jun 2026; final EC delegated act expected Q3-Q4 2026 |
| NESRS (Non-EU Groups) | Standards for non-EU parent groups reporting at consolidated EU-operations level | EC adoption expected by 30 Jun 2026 (per CSRD Article 40a) |
| VSME (Voluntary SME) | Voluntary reporting for SMEs below CSRD threshold; also the regulatory ceiling on what CSRD filers can demand from value-chain partners with fewer than 1,000 employees | Adopted by EC Recommendation on 30 July 2025 |
| Sector-specific ESRS | Industry-specific standards (oil + gas, mining, etc.) | Deferred under Omnibus simplification; not currently being developed |
ESRS vs IFRS S2 (interoperability)
ESRS E1 (climate) and IFRS S2 (climate) cover substantially the same disclosure surface but differ on materiality basis and architectural details:
| Aspect | ESRS E1 | IFRS S2 |
|---|---|---|
| Issuer | EFRAG → EC delegated act | International Sustainability Standards Board (ISSB) |
| Materiality | Double (impact OR financial) | Financial only |
| Scope 1, 2, 3 | All mandatory | All mandatory (with transition relief for first-year Scope 3) |
| TCFD inheritance | Architecture inherited via the 4 pillars | Same 4 pillars — TCFD recommendations consolidated |
| Industry metrics | Voluntary (sector standards deferred) | Mandatory (SASB Industry Standards incorporated) |
| Application | Mandatory for CSRD-in-scope entities | Mandatory only in adopting jurisdictions |
The IFRS Foundation and EFRAG jointly published an interoperability guidance to help entities aligning with both regimes minimise duplication.
India relevance
ESRS becomes operationally relevant to Indian entities only through CSRD scope (see the CSRD glossary entry for the three cases — subsidiary in scope; group via NESRS; SME supplier under the value-chain cap). For Indian listed entities preparing for SEBI BRSR + BRSR Core assurance, ESRS is informative but not binding unless one of those three cases applies.
The data infrastructure that supports a robust BRSR Core engagement — documented GHG inventory boundary, evidence-tracked workforce data, water-and-waste registers, double-counting controls across operating entities — also supports a future ESRS-aligned report for an entity that becomes in scope.
Related terms
- CSRD Disclosure Framework — methodology page — full practical walkthrough including the 12 ESRS standards, double materiality, India-relevance cases
- CSRD — the EU directive that ESRS implements
- Double materiality — the dual-limb framework underpinning ESRS
- IFRS S2 — the investor-materiality climate standard that interoperates with ESRS E1
- TCFD — the four-pillar architecture inherited by both ESRS E1 and IFRS S2
- BRSR — India’s parallel mandatory listed-entity reporting framework
- CBAM — the parallel EU regime on embedded-emissions carbon pricing