Navigating ESRS: Key takeaways for US companies

Position Green, in collaboration with the Global Reporting Initiative (GRI), recently hosted a webinar: “Navigating New Horizons: A Comprehensive Guide to ESRS Compliance for US Companies.” This provided an in-depth look at the European Sustainability Reporting Standards (ESRS) and their implications for US companies. Continue reading to discover three key takeaways from the webinar:

1. Understanding ESRS and the double materiality assessment

The ESRS are the reporting standards mandated by the Corporate Sustainability Reporting Directive (CSRD). With 82 disclosure requirements across environmental, social, and governance (ESG) themes, ESRS ensures that companies provide a holistic view of their sustainability impacts and risks.

The double materiality assessment is foundational to the application of this framework, requiring companies to evaluate both their impact on society and the environment and how external sustainability factors impact the company financially. This dual approach aligns business operations with broader societal and environmental goals, making it essential for companies to understand and implement this assessment effectively.

2. Building a structured compliance roadmap

Developing a detailed compliance roadmap can help companies align with ESRS requirements and ensure timely compliance. The roadmap begins with a double materiality assessment to identify and evaluate the company’s material impacts, risks, and opportunities. Following this, companies should address mandatory disclosures, conduct a gap analysis, and develop a project roadmap to close any identified gaps.

This structured approach ensures that companies not only comply with ESRS but also enhance their sustainability performance by integrating findings during the double materiality assessment and gap analysis process into their sustainability strategy. The ultimate goal is to produce a CSRD compliant sustainability report with a detailed ESRS index mapping out reporting compliance.

Aligning sustainability reports with the ESRS structure and leveraging existing ESG data are crucial steps in this process. Organizing the data required to meet the ESRS disclosure requirements can be complex to navigate, but reporting solutions can help alleviate these obstacles.

3. Leveraging existing frameworks and tools

The interoperability between GRI Standards and the ESRS can significantly ease the transition for companies. Existing frameworks like the GRI Standards provide a robust foundation for ESRS compliance.

Tools and frameworks such as the Greenhouse Gas Protocol, Science-Based Targets, and the Task Force on Climate-related Financial Disclosures (TCFD) are recommended for aligning climate-related reporting.

For social and governance aspects, resources like the Norwegian Transparency Act and Canadian Modern Slavery Act offer valuable guidance. These tools not only facilitate compliance but also enhance the overall quality and transparency of sustainability reporting, making them indispensable for companies aiming to meet ESRS requirements efficiently.

For those who missed the live session or want to revisit the detailed discussions, access the recorded webinar here.