How to build your first ESRS report

The first wave of ESRS reporting is approaching. Having a robust foundation for your first sustainability statement in place is crucial for reaching CSRD compliance. In this webinar, our in-house ESRS Specialists, Bea and Julia, walk you through the building blocks of an ESRS report and share recommendations on tackling common challenges in ESRS reporting. 

The webinar in short:

Why do we need standardised sustainability reporting?

 

Key elements of an ESRS-aligned reporting structure

• The outcome of the double materiality assessment (DMA) lays the foundation for the sustainability report.
• The concept of “materiality of information” can be seen as a second “filtration” and should be applied after the DMA – it helps determine the final disclosures to be reported.  
• Include the sustainability statement in the management report, but clearly distinguish information required by the ESRS from other types of information. Structure your information into four sections: a) General Information, b) Environmental, c) Social and d) Governance information.
• The ESRS allows for some flexibility in the reporting structure by introducing the concept of “incorporation by reference”. This means that information –given that it meets certain conditions – may be placed in another section of the management report, or even in another document such as the financial statements.
• All reported information in the sustainability statement must be relevant, faithfully represented, comparable, verifiable, and understandable.
• All sustainability data must be digitally tagged using XBRL. This applies to all ESRS-mandated disclosures. However, due to a delay in the ESRS XBRL taxonomy, this requirement will not yet have to be applied for the first ESRS reports due 2025. 

Overcoming common challenges in ESRS reporting 

Our recommendations on how to tackle some of the most common challenges companies face in their reporting process:

1. Limited data availability. Companies are allowed to use estimates, industry averages, or proxies when exact data is not accessible. Being transparent about data limitations and the methods used to fill data gaps is essential.                                  
2. Setting baselines. Set clear baselines for tracking progress and provide a starting point for data comparison. 

3. Reporting on strategic alignments and forward-looking efforts. Forward-looking statements should be realistic and backed by data, with scenario analyses helping to outline potential outcomes. Policies, actions, and targets must be grounded, verifiable, measurable, and realistic, and include information about resources.

4. Entity-specific disclosures. Include entity-specific disclosures when material IROs are specific to the organisation. These disclosures should allow stakeholders to understand the nature and scope of unique impacts or risks.

5. Impactful communication. Tailor your sustainability statement to the target audience, such as investors, NGOs, and regulators. Visual aids and conceptualisations can help clarify complex data and make the report more understandable.  

Stay ahead of future ESRS challenges

In the upcoming years, we’re expecting some key changes to the ESRS framework: the introduction of sector-specific standards, updated guidance from EFRAG and more stringent assurance requirements. 

To prepare and adapt to the evolving demands, we recommend companies to:

 

Watch the full webinar to dive deeper into the foundations of ESRS reporting.

If you have more questions about building your first ESRS-aligned sustainability statement, you’re welcome to reach out to our ESRS Lead: 

Ditte Maria Olsen