What you need to know about ESRS standards

Origin and objectives of standards

 

The European Sustainability Reporting Standards (ESRS) were developed to structure companies' communication on their sustainability commitments and results.
They aim to standardize the presentation of non-financial information in order to facilitate its reading and comparison at the European level.

These standards were developed byEFRAG (European Financial Reporting Advisory Group), an advisory body responsible for proposing accounting and non-financial reporting standards to the European Commission.
The initial objective was to respond to a growing need: to enable investors, economic partners, and the general public to access reliable and comparable ESG (environmental, social, and governance) information.

ESRSs are based on existing international frameworks such as the GRI (Global Reporting Initiative) and SASB (Sustainability Accounting Standards Board).
They are not intended to replace these tools, but rather to provide a common foundation adapted to the European context, where sustainability regulations have gradually been strengthened.

A structure derived from the CSRD directive

 

ESRS are closely linked to the CSRD directive, which aims to strengthen non-financial transparency within the European Union.
The objective of this framework is to give environmental, social, and governance issues a clearer place in corporate practices.

In concrete terms, the CSRD requires the organizations concerned —large companies, listed groups, and, in the long term, certain SMEs — to publish a report describing their impacts, policies, and results related to sustainable development.
The ESRS define the structure of these reports, serving as a common framework for presenting these elements in a comparable manner.

This approach aims to better link non-financial data to organizations' overall strategy in order to provide a more comprehensive view of their activities.
It is not a control tool, but rather a methodical framework for understanding how companies take environmental and social issues into account in their day-to-day management.

The main thematic areas

 

ESRS are organized around several major sections, each dealing with a specific aspect of sustainable development.
These sections enable environmental, social, and governance issues to be addressed in a structured manner, based on materiality: only topics that are truly significant for the company should be detailed in the report.

• Environmental component: this covers greenhouse gas emissions, natural resource management, and climate risks.
  It seeks to better quantify the contribution of human activities to global warming, while identifying possible levers for reduction.
• Social aspect: this concerns employees, workplace safety, diversity, training, and relations with external partners.
  It aims to provide a better understanding of the place of people in production and governance models.
• Governance: This focuses on decision-making structures, ethics, anti-corruption, and accountability in the supply chain.

Each company must therefore determine, based on its activity and size, the most relevant topics to develop.
This approach is based on the principle of dual materiality: it involves assessing both the company's impact on society and the effects of environmental or social issues on its economic activity.

An evolving definition of sustainability

 

ESRSs do not define sustainability in a rigid manner: they define it as a balance between environmental, social, and economic dimensions.
This definition is deliberately broad to allow different sectors of activity to adapt to it.
An industrial company, for example, will not deal with the same issues as a service company or a local SME.

Standards will continue to evolve over time to incorporate new aspects, including climate and biodiversity issues, as well as emerging social issues.
The idea is to build a system capable of supporting business development while tracking progress made in terms of ecological transition.

This is not a moral obligation, but rather a technical guideline that seeks to better align publication practices among economic actors.
The goal remains the same: to make data comparable, reliable, and accessible, without overly standardizing approaches.

A tool for understanding, not a constraint

 

ESRS does not aim to impose a single method.
Rather, it provides a framework for organizing companies' communication on sustainability issues, without determining their strategy.
Each organization remains free to interpret and present its results according to its specific characteristics.

For many stakeholders, particularly SMEs, applying these standards is a first step toward gaining a better understanding of their impacts and risks.
However, the approach is not intended to be uniform: it can be adapted to the maturity level, size, and resources of each organization.

Thus, the CSRD directive and ESRS are not an end in themselves, but rather a tool for interpreting sustainable development at the European level.
They reflect a desire to place transparency at the forefront, without making it an immediate compliance requirement.

The challenges and limitations of implementing new standards

 

A logic of measurement and consistency

 

One of the main objectives of these new rules is to improve the consistency of data published by companies on their environmental and social activities.
They seek to make disclosures more readable and comparable, without overly standardizing approaches.

This development is based on a simple idea: enabling economic actors to better understand their overall performance.
It is not just a matter of reporting, but also of more accurately tracking efforts to reduce emissions or improve quality of life at work.

The companies concerned are invited to collect precise, quantified, and verifiable indicators.
This requires better internal organization, particularly between the financial, environmental, and human resources departments.
Data reliability then becomes a key issue: a credible report depends above all on the accuracy of the elements measured.

The question of materiality

  A central concept of these obligations is that of materiality. It consists of identifying the most significant issues for a given company. In other words, it involves prioritizing issues according to their actual importance for the business. through the development of a clear and documented materiality matrix. Each organization must therefore determine the areas in which it has the most responsibility or influence: energy, resource management, working conditions, gender equality, relations with partners, etc. This principle avoids imposing a single model on everyone and allows the content of the report depending on the size, sector, and nature of the business. For large organizations, the materiality becomes an internal analysis tool. For SME, it is often a first structured approach to non-financial reporting. In both cases, it serves to better link available data to real development issues.

Limitations and challenges of implementation

 

While these new requirements provide greater visibility, they also raise several practical difficulties.
Some companies struggle to gather all the necessary data or to present it in the required formats.
Others lack the human resources to monitor the indicators on a regular basis.

The issue of costs is also present.
Setting up a reliable measurement system requires technical resources, time, and sometimes external support.
For SMEs, this constraint may seem burdensome, especially when the obligations are added to other existing regulatory requirements. The Omnibus Regulation of February 26, 2025, postponed their CSRD obligations by a few years, but there is nothing to prevent them from voluntarily addressing these issues now, in particular by adopting the simplified VSME framework.

Finally, the multiplicity of standards used worldwide continues to create confusion.
Even though these rules are becoming more uniform, each country retains its specific characteristics, and the interpretation of requirements may vary depending on the context.

The role of measurement and support tools

 

In this context, collecting reliable data becomes essential for all organizations, regardless of their size.
Carbon calculation and environmental performance monitoring tools help lighten this burden by automating part of the process.

It is with this in mind that Global Climate Initiatives (GCI) offers Decarbo’Solution®.
This tool helps organizations establish their greenhouse gas emissions balance sheet (BEGES), simulate reduction scenarios, and present results that are consistent with the expectations of public authorities. It is based on a clear and verifiable method that facilitates the production of a comprehensive and readable report.

The goal is not to comply with a directive, but to have an accurate measurement tool to guide environmental efforts over time.
This allows companies to anticipate regulatory changes, improve the quality of their data, and better understand the effects of their actions.

Rather than viewing these obligations as a constraint, they can see them as an opportunity to organize their development around concrete, measurable, and shared indicators.

Standards relating to non-financial reporting reflect a logical evolution in the economic world: a better understanding of the effects of human activities on the environment and society.
Their primary aim is to make corporate communications clearer, more comparable, and more credible, without standardizing approaches.

This transformation, which is gradual and still underway, highlights the importance of measurement.
Knowing how to quantify emissions, track progress, and share verifiable results is becoming essential for building a more responsible and transparent business model.

With this in mind, Global Climate Initiatives (GCI) supports organizations with Decarbo’Solution®, a method for ensuring the reliability of carbon calculations and managing reduction actions over time.
Beyond any regulatory requirements, it is a decision-making tool: a concrete means of moving towards a more balanced model based on rigor, measurement, and collective efficiency.