With the adoption of the CSRD (Corporate Sustainability Reporting Directive) , the European Union is imposing new non-financial reporting requirements on companies. This directive strengthens sustainability reporting obligations. The goal is to improve the transparency and reliability of companies' ESG (Environmental, Social, and Governance) information. From now on, companies will have to provide standardized data on their impact, strategy, and sustainability risk management.
To support this approach, the European Sustainability Reporting Standards (ESRS) Establish a structured framework of standards. ESRS 1 Sets out the fundamental concepts and requirements for the preparation and presentation of sustainability data. ESRS 2 focuses on the general information to be published. This includes governance, strategy, business model, and the analysis of impacts, risks, and opportunities ( iROS ).
What does ESRS 1 aim for?
The main objective of ESRS 1 is to clarify the architecture of sustainability reporting standards. It establishes the basic principles and methodologies to be applied in the preparation and presentation of sustainability information. This standard thus ensures the reliability of the data and its comparability.
ESRS 1 provides a structured framework for companies to meet the requirements of the CSRD . It is designed to simplify the process while ensuring compliance. It allows companies to focus on the key elements of their reporting, ensuring that the published data is relevant and understandable.
What is the typical ESRS 1 information?
ESRS 1 defines the Fundamental concepts That anyone preparing for sustainability reporting must have in mind before starting:
- Concept of Double Materiality Analysis
- Value chain concept for CSRD
- Concept of Time Horizons
Thus, it is the ESRS 1 which determines the major concepts to prepare for the CSRD, and how companies must take them into account.
For dual materiality analysis, ESRS 1 explains what impact materiality and financial materiality are, and how companies should identify impacts, risks, and opportunities (IROs) and quantify their materiality. This document Contains the famous list of issues to consider when starting the analysis.
The Concept of the Extended Value Chain is specific to the CSRD, as it is one of the only environmental regulations that requires companies to consider the impacts and risks emanating from their direct (suppliers, customers, etc.) and indirect (activities and relationships related to the company's business and the external environment in which it operates) value chain. ESRS 1 specifies that companies must Include information from their value chain when relevant to the topic .
Finally, the concept of Time Horizons Is a key concept for the CSRD. On the one hand, it is essential for a company to correctly define the reporting period and to monitor the evolution of its performance with respect to a reference year, which must be clearly defined. On the other hand, the CSRD requires companies to link the present and the future by projecting their impacts, risks and opportunities at different time frames: short term (5 <1 year), medium term (1-5 years) and long term (> years) .
How does ESRS 1 facilitate reporting using qualitative characteristics?
ESRS 1 Defines drafting conventions for structuring sustainability reporting. This ensures the Relevance And Clarity of information. All published data must be faithful to the company's reality, without omissions or distortions.
The goal of these standards is to make data comparable across different companies and time periods. This approach allows stakeholders to conduct in-depth analyses and assess sustainability performance. These features strengthen confidence in companies' non-financial reporting.
Additionally, the information must be verifiable . This means it can be audited by third parties, ensuring Transparency and compliance. Finally, the presentation of the data must be clear and understandable. This allows stakeholders to make informed decisions based on solid information.
By combining these qualitative characteristics, ESRS 1 promotes more transparent and reliable extra-financial reporting. This framework is essential to ensure that companies meet the CSRD 's disclosure requirements in a consistent and consistent manner.
What general information is required by ESRS 2?
The information contained in ESRS 2 is mandatory, regardless of the results of the double materiality analysis. It covers four general themes, broken down into publication obligations, called “Disclosure Requirements” (DR). ESRS 2 Requires Companies to Provide Information on Their Governance , their Strategy , as well as their impacts , Risks And Opportunities .
This information is crucial for understanding the structure and commitments of companies to sustainability. It allows stakeholders to assess the actions taken to achieve sustainability objectives. The other objective is to understand the company's sustainability performance in a clear and measurable way.
The Basics of Preparation
At the Start, Companies Must Contextualize the Scope chosen for the sustainability report (subsidiaries included, similarity or not with the scope of financial consolidation, etc.), as well as the methodological choices made (deviation from the time horizons proposed by the CSRD, use of transitional provisions, use of transitional provisions, omission of information for professional secrecy, etc.).
Governance Information
The governance information required for all companies includes both a general presentation of the Composition and roles of the various management committees , and an explanation of How these committees manage sustainability issues : which committees are the decision-making bodies, how are they trained on sustainability issues, how are they informed of the company's performance on the issues...
Information on strategy and business model
Similar to governance disclosures, companies must provide a general description of their strategy and business model to provide insight into their business. Following This, They Must Explain How Sustainability issues are considered in defining the strategy and how the opinions of relevant stakeholders are incorporated into the definition process.
Information on the analysis of impacts, risks and opportunities
In the first part of their report (corresponding to the information requested in ESRS 2), companies must explain how they conducted their double materiality analysis. What methods and criteria were used to assess impacts and risks? What were the results of this analysis, justifying the information published in the report?
Why is ESRS 2 crucial for transparency?
ESRS 2 Enhances Transparency by requiring standardized information on companies' CSR practices. By imposing common criteria, it provides stakeholders with access to reliable data. This promotes a proper assessment of efforts made to achieve sustainability goals.
The ESRS 2 framework enhances the comparability of information between European companies. This allows for a better understanding of their respective sustainability performance. This level of standardization is essential for assessing companies' compliance with the CSRD Objectives .
Conclusion
In conclusion, ESRS 1 And 2 Form the basis for publication of the CSRD . These standards ensure clear and comparable information on sustainability. ESRS 1 offers a structured approach, integrating dual materiality principles and qualitative criteria.
ESRS 2 , for its part, sets uniform requirements, ensuring transparency and comparability of information. Together, these two standards facilitate companies' compliance with European requirements on extra-financial reporting.
Discover more articles
Dive into the heart of the subjects
CSRD: What training course to make the report?
.png)
Taxonomy and CSRD: The Ultimate Guide to Understanding Everything
CSRD: What indicators should be published?
FAQs
Find answers to common questions about CSRD and Kiosk
The CSRD or Corporate Sustainability Reporting Directive is the new European directive which aims to impose and better regulate corporate sustainability reports.
It makes companies more transparent, with standardized ESG reporting standards called ESRS (European Sustainability Reporting Standards)
The application of the Corporate Sustainability Reporting Directive is progressive. Here is a summary table.
| Effective year | Businesses impacted | Standard |
|---|---|---|
| 2025 (over the financial year 2024) | Listed companies with more than 500 employees | ESRS |
| 2026 (sur l’exercice 2025) | Autres grandes entreprises de plus de 1000 salariés | ESRS |
| 2026 (over the financial year 2025) | Businesses that meet two out of three criteria: | VSME |
| 2027 (over the year 2026) | SMEs listed on the stock exchange | VSME |
| 2029 (over the fiscal year 2028) | Non-European companies with at least €150M in turnover on the European market | ESRS |
Want to know when your business is impacted? Use our regulatory monitoring tool to find out.
The "omnibus" bill is a recent initiative by the European Commission aimed at reducing the scope of the CSRD directive. It proposes, in particular, to raise the application thresholds: only companies with more than 1,000 employees would be affected, compared to 250 previously.
It promotes the adoption of the VSME framework to reduce the reporting burden on SMEs and mid-cap companies.
The VSME (Voluntary Sustainability Reporting Standard) is a voluntary European standard designed to help unlisted small and medium-sized enterprises (SMEs) structure and communicate their sustainability initiatives. Developed by EFRAG, this standard offers a lighter framework compared to ESRS standards, covering ESG aspects. It allows in particular to:
- Harmonizing sustainable reporting practices in Europe
- Facilitate the response to the expectations of business partners
- Improving access to responsible financing
It aims to harmonize sustainable reporting practices, facilitate meeting the expectations of business partners, and improve access to responsible financing. Although not mandatory, adopting VSME allows SMEs to demonstrate their commitment to sustainability and anticipate future regulatory developments.
- Complete the preliminary steps for the CSRD
These steps are dual materiality analysis and gap analysis. They will help you understand the material issues, impacts, risks, and opportunities for your business. They will also allow you to create a roadmap based on what you have already achieved.
Check out our article on double materiality here.
- Compile your data and produce your indicators
Centralizing sustainability data is essential for your compliance, particularly to facilitate understanding and consistency when producing quantitative indicators.
- Produce your detailed report in XHTML format with XBRL tags
Thanks to its tagging and visualization technologies, Kiosk guarantees a very high level of consistency.
Find our article on XBRL tagging here .
- Audit your data
At the end of these steps, your sustainability report is ready to be audited by an Independent Third Party Organization (ITO).
Kiosk supports your compliance journey throughout this process. For more information on these steps, we invite you to contact our team.
CSRD compliance requires companies to:
- understanding the 12 ESRS and 82 disclosure requirements
- the collection of more than 1,000 data points
- the calculation of 50-147 quantitative indicators
- tagging 4,000 items in the final report
Kiosk is a software that allows companies to save 5 months on the preparation of their CSRD report by automating the most time-consuming steps.
- First of all, the security of your data is our priority.
- All data is stored in France, in Paris, via our French hosting provider.
- During transit, your data is encrypted in SSL/TLS from the user's browser to our servers guaranteeing the security of communications.
- Data is also encrypted at rest, both on the database and on file storage, protecting the data in the event of a leak or attempted theft.
- Kiosk's technical teams are the only ones who can access your data.
- Kiosk is in the process of ISO27001 certification.
- Our technical support is available 24/7.