Glass-walled building reflecting trees. This is shoot with a composition to look up from a lower place.

EFRAG Publishes First Implementation Guidance Documents for CSRD Reporting

June 18, 2024
This guidance aims to support the preparation and analysis of reports using the European Sustainability Reporting Standards.

On 31 May 2024, EFRAG published the first three Implementation Guidance (IG) documents relating to the European Sustainability Reporting Standards (ESRS). The IG documents address the materiality assessment (IG 1), value chain (IG 2), and ESRS datapoints (IG 3), which EFRAG considers the “most challenging aspects” of ESRS implementation.For background information on the ESRS and details of the EFRAG consultation on the IG documents, refer to this Latham blog post.

EFRAG has also published feedback statements for each of the finalised IG documents, to demonstrate how the feedback from the public consultation has been reflected in the final version of the IG documents and summarise the key comments from the consultation process.

Through the publication of the IG documents, EFRAG aims to support both undertakings and stakeholders in implementing the ESRS through illustration of the reporting requirements and answers to frequently asked questions (FAQs). The ESRS set out the requirements for companies required to report under the Corporate Sustainability Reporting Directive (CSRD); hence these IG documents that address concepts in the ESRS will assist companies in-scope of the CSRD in compliance with the reporting obligations.

The IG documents are non-authoritative, meaning the ESRS take precedence over any information in the guidance which appears to contradict any requirement or explanation in the ESRS.

Summary of the IG Documents

IG 1: Materiality Assessment Implementation Guidance

IG 1 provids guidance on the ESRS approach to materiality, with detail on implementing the concept of double materiality. Notably the ESRS do not mandate a specific process to follow when performing the materiality assessment, leaving that to the judgement of the undertaking. However, IG 1 does provide an example of a materiality assessment process that would meet the requirements of the ESRS.

IG 1 also covers how other sources including the Global Reporting Initiative (GRI) and International Sustainability Standards Board (ISSB) standards can be leveraged, among other frameworks. Consideration of how the different materiality concepts in these frameworks can interact with the double materiality requirements per the ESRS is also provided.

A number of FAQs are addressed on topics including impact and financial materiality, stakeholder engagement, and reporting.

IG 2: Value Chain Implementation Guidance

IG 2 outlines the requirements for value chain considerations under the ESRS, including how the value chain is defined. It also outlines the relevant reporting requirements from the materiality assessments, as well as in relation to policies, actions, metrics, and targets.

The FAQs includes the question, “Where does the value chain begin and end?”, as well as detailed questions on the consideration of financial assets as business relationships. It also includes other questions covering key topics and calculations.

IG 2 also includes a “value chain coverage map” which maps the disclosure requirements in the sector-agnostic ESRS.The sector-agnostic ESRS cover the two cross-cutting ESRS (ESRS 1 General Requirements and ESRS 2 General Disclosures), and 10 topical ESRS (ESRS E1 Climate Change, ESRS E2 Pollution, ESRS E3 Water and Marine Resources, ESRS E4, Biodiversity and Ecosystems, ESRS E5 Resource Use and Circular Economy, ESRS S1 Own Workforce, ESRS S2 Workers in the Value Chain, ESRS S3 Affected Communities, ESRS S4 Consumer and End-Users, and ESRS G1 Business Conduct).

IG 3: List of ESRS Datapoints

IG 3 is provided in an Excel document summarising all datapoints included in the ESRS as well as details on whether these are voluntary or mandatory. It also covers the nature of the disclosure, such as whether a qualitative or quantitative response is required.

EFRAG notes that IG 3 is not intended to be a starting point for the materiality assessment. However the IG 3 can provide a basis for a gap analysis or data collection exercise.

For IG 3, EFRAG has also published an explanatory note providing further details on the relationship between the list of datapoints and the ESRS XBRL taxonomy, as well as guidance on how to use the Excel document.

Latham & Watkins will continue to monitor the development of ESG reporting standards in the EU and globally.


    This publication is produced by Latham & Watkins as a news reporting service to clients and other friends. The information contained in this publication should not be construed as legal advice. Should further analysis or explanation of the subject matter be required, please contact the lawyer with whom you normally consult. The invitation to contact is not a solicitation for legal work under the laws of any jurisdiction in which Latham lawyers are not authorized to practice. See our Attorney Advertising and Terms of Use.