Cleerit ESG has officially been approved as Friend of EFRAG – Sustainability Reporting

We are proud to announce that Cleerit ESG has officially been approved as Friend of EFRAG – Sustainability Reporting, demonstrating our commitment to sustainability reporting and supporting EFRAG’s mission.

Cleerit recognizes the importance of contributing to the development of the European Sustainability Reporting Standards (ESRS) and supporting EFRAG’s activities.

By joining as Friends of EFRAG – Sustainability Reporting, we are committed to providing our support to further EFRAG’s initiatives in this field.

We are convinced that the ESRS will help companies advance both corporate sustainability and performance, and future-proof their business.


EFRAG’s mission is to serve the European public interest in both financial and sustainability reporting by developing and promoting European views in the field of corporate reporting. EFRAG builds on and contributes to the progress in corporate reporting.

In its sustainability reporting activities, EFRAG provides technical advice to the European Commission in the form of draft European Sustainability Reporting Standards (ESRS) elaborated under a robust due process and supports the effective implementation of ESRS.


Cleerit’s mission is connecting people, planet and profit at the heart of business strategy and decisions – to reach higher goals.

We are committed to sustainability and passionate about closing the strategy to execution gap – with extensive experience and comprehensive research recognized by French Ministry for Higher Education, Research and Innovation.

The Cleerit ESG solution is at the core of our corporate strategy. The unique capabilities embedded in our holistic and inclusive governance model are a perfect fit to the IRO management model built in the ESRS framework, and make a real difference in advancing both corporate sustainability and performance.

It’s the beginning of a new era, and we are determined to being a key contributor in advancing sustainable corporate strategies, for our and future generations.

⭕ You are welcome to contact us if you need a solution and support to implement ESRS reporting in your organization >>>

Let us pave together the way for a successful implementation of the sustainability reporting standards and a green transition🌱🌍!

getCSRDready, CSRD, ESRS, CSDDD, ESG, Strategy, Governance, SustainabilityReporting, Digitalisation, Cleerit, EFRAG

CapEx available from ESRS disclosures will help monitor the flow of private capital

Your ESRS-reporting will help monitor the flow of private capital to fill the investment gap needed to achieve the objectives of the European Green Deal.

This requires investments in new technologies and business models.

Overall, the EU will need to scale up its investments by two-thirds (about EUR 620 billion more each year until 2030), relative to average levels over the 2011-2020 period, to pave the way for climate neutrality and a resilient economy by 2050.

The bulk of funding is to be mobilised by private entities.

When assessing the overall investment needs, albeit significant, they should be compared with the cost of inaction which is of much greater magnitude.

The EU Platform on Sustainable Finance (PSF), an advisory body to the European Commission, has been tasked with developing a methodological framework to monitor the flow of private capital into sustainable investments.

The Platform has recently released an intermediate report with a proposed methodology mainly resting on two types of capital flows:

✔ capital expenditures in real economy entities, which shed light on progress towards filling the investment gap;

✔ flows in and from financial markets, as this represents an important source of capital in support of real economy investments.

⭕Investments dedicated to companies in transition – and under CSRD scope – are at the heart of the monitoring framework.

ESRS indicators will be used to identify such companies.

Taxonomy eligible and aligned CapEx data will be complemented with other reported data on CapEx relevant for transition and reported under the ESRS.

CapEx allocated to a transition plan and available from ESRS disclosures is proposed to become the principal source of data.

Such data will be audited, thus increasing the reliability of the results.

The proposed architecture will provide a first bottom-up estimate of CapEx contributing to filling the Green Deal investment gap.

⭕Examples of ESRS CapEx datapoints:

➡ E1.16.c CapEx Financial resources allocated to action plan, E1-1 – Transition plan for climate change mitigation

➡ ESRS2.69.b CapEx Financial resources allocated to actions in relation to material sustainability matters (MDR-A)

Assessing Adequate Wages S1 & S2

Under ESRS S1 and S2, companies need to include Adequate Wages in their Double Materiality Assessment.

DP 69 in DR S1-10 requires companies to disclose whether all own workforce employees are paid an adequate wage, in line with applicable benchmarks.

If so, stating this is sufficient and no further information is needed. (Information regarding non-employees in own workforce is optional.)

If not, the company needs to disclose the countries where employees earn below the applicable adequate wage benchmark and the percentage of employees for each of these countries.

ESRS defines an Adequate wage as follows:

“A wage that provides for the satisfaction of the needs of the worker and his / her family in the light of national economic and social conditions” (based on a full-time employment relationship).

The lowest wage shall be considered separately for each country in which the company operates, except outside the EEA when the adequate wage is defined at a sub national level.

The adequate wage benchmark used for comparison with the lowest wage shall not be lower than:

In the EEA

The minimum wage set in accordance with Directive (EU) 2022/2041 of the European Parliament and of the Council on adequate minimum wages in the EU.

It references both indicative reference values commonly used at international level such as 60 % of the gross median wage and 50 % of the gross average wage, and/or indicative reference values used at national level.

Data can be obtained from the European Labour Force Survey.

Outside of the EEA (b.i)

The wage level established in any existing international, national or sub-national legislation, official norms or collective agreements, based on an assessment of a wage level needed for a decent standard of living.

Computing living wage estimates is data-intensive, requiring information on needs and prices that is timely and context-specific.

There are a number of international initiatives, such as the Fair Wage Network, the Global Living Wage Coalition and the WageIndicator Foundation, specialized in this.

Paying legal minimum wages, such as the SMIC in France, is not always a guarantee.

As an example, French tire-maker Michelin has recently established its own global living wage.

“The minimum wage in France is not sufficient in Michelin’s eyes to meet what we consider to be a decent wage,” Florent Ménégaux, president of the Michelin group, told Le Figaro.

Read more about Michelin here >>

⭕ You are welcome to contact us if you need a solution and support to implement ESRS reporting in your organization.

5 things to get right in your ESRS reporting

Your CSRD reporting will impact your credibility, financial rating, and preferred partner-supplier-employer status. It can also help to protect you against greenwashing accusations.

But for that, you need to follow the instructions. The ESRS standards contain detailed questions. There are over 2000 datapoints whereof more than 400 require a Yes or No answer.

As we are currently supporting our customers navigate towards CSRD excellence, we have picked out 5 things to get right from the start:

⭕ Assess all topics listed ESRS 1 AR 16 when conducting your double materiality assessment.

For example, S1 is divided into 17 granular topics, connected to different impacts, risks and opportunities (IROs).

These topics are also found in the European Social Charter, which is complementary to the European Convention on Human Rights, protecting civil and political rights.

⭕ Assess your specific impacts, risks and opportunities – not only the sustainability topic.

The method described in the ESRS (confirmed by the French CNCC) requires an assessment at the IRO level and not only at the topic level.

⭕ Don’t consider a topic not material just because you think you are managing the connected impacts and risks well.

Materiality is a user-driven concept. A sustainability topic (including omissions of information on such topics), is considered material if, individually or in the aggregate, it could reasonably be expected to influence decisions of intended users taken on the basis of your information.

By declaring a sustainability topic not material, you are telling your stakeholders, trust me, there is nothing important for you to see here, please move on. That’s an important responsibility and you need to be prepared to back it up if someone challenges you.

⭕ Don’t provide biased or manipulated information and leave out unfavorable aspects.

ESRS 1 specifically states that the information shall be complete, accurate and neutral.

Information is neutral if it is not slanted, weighted, emphasized, de-emphasized or otherwise manipulated to make it more likely that the users will receive that information favorably or unfavorably.

It shall be balanced and granular enough not to obscure material information.

⭕ Don’t confuse positive and negative impact, and risk mitigation with opportunities.

A positive impact is not just avoiding a negative impact – you do not have a positive impact simply because you avoid doing harm. Positive impact is about increasing positive outcomes for people and the environment based on evidence❗of actual outcomes.

An opportunity is not simply mitigating a risk. It requires a proactive❗stance leading to new business opportunities and positive stakeholder relations that you intend to pursue and that can be calculated in monetary value (ESRS2.48).

⭕ You are welcome to contact us to get CSRD-ready with Cleerit ESG.

Corrigendum to the ESRS

A corrigendum to the ESRS was published in the Official Journal of the European Union on Friday April 19.

The corrections do not call into question the requirements spelled out in the ESRS, mandatory under CSRD, but mainly rectify mistakes in paragraph numbers, misspellings and unclear wordings.

In some cases, the wording matters more. For example:

➡ The corrected wording in ESRS 1 Annex I now specifies anticipated, as opposed to potential, financial effects.

➡ The wording in ESRS S1 is now consistently own ‘workforce’ and not own ‘workers’.

➡ In ESRS 2, the DR IRO-1 covers the process to identify and assess material impacts, risks and opportunities – and not the ‘processes’.

➡ On page 96, in Annex I, ESRS E1 ‘Climate change’, Appendix A ‘Application requirements’, paragraph AR 34, table, first column, last row, the total energy consumption (MWh) is calculated as the sum of lines 6, 7 and 11 (and not 6 and 11).

➡ On page 178, in Annex I, ESRS S1 ‘Own workforce’, paragraph 100, it is now specified that the company shall disclose ‘any related fines’ and not only ‘material’ fines.

➡ On page 217, in Annex I, ESRS S3 ‘Affected communities’, table of contents, DR S3-4, the correction specifies that it is about ‘managing’ material risks as opposed to ‘mitigating’ material risks.

⭕ You can download the corrections in English, French and Swedish here:

Corrigendum to the ESRS (en) >>
Rectificatif aux ESRS 19-04-2024 (fr) >>
Rättelse till ESRS 2024-04-19 (sv) >>

⭕ You are welcome to contact us if you need a solution and support to implement CSRD and ESRS reporting in your organization.

How to drive stronger valuations with sustainability disclosures

Deloitte research: How to drive more cost-efficient access to capital, stronger valuations and earn investor trust with sustainability disclosures – an opportunity for corporate leaders.

Sustainable investing is the present, not the future.

Investors are increasingly incorporating sustainability factors into investment decisions:

⭕ 83% of surveyed investors incorporate sustainability information into fundamental analyses.

⭕ 79% of respondents have sustainability policies in place, compared to 20% five years ago.

⭕ Only 1% state they don’t have any plans to develop sustainable investing policies in the future – these results are consistent globally and across investor types.

Investors are seeking to minimize risks and capitalize on opportunity, with huge investments in global economic growth projected between 2021 and 2070 if the world economy transforms to achieve net-zero emissions.

They are looking for clear, consistent, evidence-based sustainability data and use ratings to gain a more comprehensive view of risk.

Despite growing demand for sustainability data, investors struggle with often inconsistent, unclear, and unreliable information:

❌ Unclear corporate sustainability strategies
❌ Incomparable data from ratings agencies
❌ Frequent lack of measurable outcomes from corporate reports

They believe regulations will ultimately clarify many of the data challenges investors face by bringing consistency and standardization to corporate sustainability disclosures.

Four actions that can help earn investor trust in corporate sustainability commitments:

➡ 1. STRATEGY & GOVERNANCE: Strengthen sustainable governance capabilities through greater coordination across the C-suite, to reliably execute on sustainability commitments.

➡ 2. SYSTEM SUPPORT: Invest in sustainability measurement, reporting systems, and compliance solutions to enable more robust, higher-quality disclosures.

➡ 3. ASSURANCE: Corroborate sustainability disclosures with third-party assurance. Investors trust assured disclosures as much as their own proprietary data.

➡ 4. ENGAGEMENT: Lead with investor engagement to address issues and foster transparency and accountability.

Deloitte and The Fletcher School at Tufts University embarked on a global study, executed between January and December 2023, to understand how companies can enhance investor trust in their sustainability disclosures.

The research was based on a survey of 1,000+ investors, including asset owners, asset managers, and investment advisers in North America, Europe, and Asia. The quantitative data was supplemented by 10 interviews with sustainability investors.

Source: How can the enterprise earn investor trust through sustainability disclosures?

CSRD, the north star of sustainability reporting – Harvard Law School Forum on Corporate Governance

⭕ Why does Harvard Law School Forum on Corporate Governance write that CSRD is the north star of sustainability reporting?

➡ As CSRD represents the most comprehensive sustainability reporting framework to date, ambitious organizations beyond its scope of applicability will see it as their north star.

➡ The comprehensive double materiality approach for the European standard will largely fulfill the materiality requirements of other regulations.

➡ The expanded scope of CSRD – designed for use by a wider group of stakeholders beyond investors – means that EU companies with business ties in jurisdictions covered by ISSB that are already making CRSD-compliant disclosures (according to the European Sustainability Reporting Standards, ESRS), including those related to climate change, should in principle satisfy any non-EU requirements.

With mounting regulations, there is a clear imperative for companies to prepare in advance for legal compliance and, in equal measure, stakeholder expectations.

⭕ Priorities: where to start?

Strengthen sustainability governance.

Disclosures around procedures, controls and practices for the oversight and management of sustainability matters are central elements of both ESRS and the ISSB’s standards.

⭕ How can proactive companies take advantage?

Design one operating model to comply with multiple regulations, especially for companies captured by several regulatory regimes, with different phase-in requirements.

Design robust governance, processes and controls to support implementation, particularly as the quality of these is likely to be scrutinized under the applicable assurance engagements.

⭕ No regrets actions: early adoption vs regulatory imperative

The regulatory direction of travel is clearly towards increasingly robust sustainability reporting requirements.

Companies that act now will benefit from early progress towards looming reporting deadlines, avoiding potential delays caused by operational constraints.

Early adopters will benefit from additional time to understand their material topics and develop the appropriate metrics, processes and controls to report on those topics, with future assurance requirements in mind.

Early adopters will find it easier to retain and attract talent.

⭕ Achieving CSRD excellence

You are welcome to contact us if you need a solution to achieve sustainability strategy, governance and reporting excellence – to protect and grow your business.


Source: A Global Baseline? How to Navigate Interoperability Across Sustainability Reporting Rules