Links between ESRS 1 AR 16 and Disclosure Requirements

EFRAG has prepared an early-stage paper on the link between the sustainability matters listed in ESRS 1 AR 16 and the Disclosure Requirements (DRs), including Application Requirements (ARs), in the topical standards.

It can be helpful to identify the DRs and datapoints (DPs) that are linked to the matters (topics, sub-topics and sub-sub-topics) assessed as being material.

The list of matters in ESRS 1 AR16 shall be considered during materiality assessment for completeness.

Judgment is required to determine the information to be included in the reporting. The general criteria applied for this judgment are relevance and decision usefulness.

⭕ AR 16 topics are often interrelated. Based on the facts and circumstances of an undertaking, the materiality of a specific AR 16 topic of a topical ESRS can trigger reporting requirements in other topical ESRS.

➡ Since the sub-topics of energy and climate change mitigation are closely linked, it is expected that if one of both is material, the other is as well.

➡ DR E1-9 Anticipated financial effects is not expected to be disclosed if the matter is assessed as material only due to its impacts (and not also due to its risks or opportunities).

➡ For S1, Own Workforce, a holistic view is important as some of the AR 16 topics interrelate. This is the case for instance for working conditions and equal treatment which are issues that often interrelate. A fragmented approach to selecting some disclosure requirements and not others should be avoided.

For metrics, there is no systematic “one-to-one” relationship between a sub-topic or sub-sub-topic, as captured by AR16 (AR16 topic), and a topical disclosure requirement.

⭕ This means that, in general, all DRs in a topical standard are applicable to all AR16 topics covered by the topical standards, with a few exceptions to this rule.

⭕ Some metrics are likely to be relevant when any of the related AR16 topics in a topical standard are assessed to be material.

This is the case when there is evidence of such a direct link when the AR topic is directly mentioned in a datapoint (and not in the title of the DR).

This is the case for instance for microplastics in ESRS E2, for water withdrawals and water discharges in ESRS E3 or for waste in ESRS E5.

⭕When this direct link does not exist, the general rule applies.

➡ An appendix in this paper links each AR16 topic to the relevant DRs:

Posted in CSRD, ESRS.