Sustainability & non-financial reporting
Two major frameworks govern corporate sustainability disclosure. They differ fundamentally in their materiality lens, which is why a precedence policy is needed when an entity is subject to both.
- CSRD → ESRS (EU). The Corporate Sustainability Reporting Directive (CSRD), Directive (EU) 2022/2464, mandates sustainability reporting for in-scope EU undertakings. It is operationalised by the European Sustainability Reporting Standards (ESRS), drafted by EFRAG and adopted as Commission Delegated Regulation (EU) 2023/2772. ESRS use double materiality — both how sustainability matters affect the entity (financial materiality) and the entity's own impacts on people and environment (impact materiality).
- ISSB → IFRS S1/S2 (global). The International Sustainability Standards Board (ISSB), under the IFRS Foundation, issued IFRS S1 (general requirements) and IFRS S2 (climate) in June 2023, effective for annual periods beginning on or after 1 January 2024. They are investor-focused and use single (financial) materiality. IFRS S2 builds on TCFD and uses SASB-derived industry metrics.
The EU framework is mid-reform (state as of June 2026 — verify)
- "Stop-the-Clock" Directive (EU) 2025/794 (in force 16 Apr 2025) postponed by two years the CSRD application for wave-2 and wave-3 companies.
- Omnibus I simplification was adopted by the Council on 24 Feb 2026 and entered into force in March 2026, narrowing scope and obligations.
- Revised ("simplified") ESRS: EFRAG delivered drafts (Dec 2025); the Commission consulted on a draft delegated act (≈May–Jun 2026) targeting a large cut to mandatory datapoints. Final amendment expected mid-2026, applicable for FY beginning on/after 1 Jan 2027, with voluntary early application for FY 2026.
- Netherlands: CSRD was not transposed by the 6 Jul 2024 deadline (infringement procedure). Implementation is split into an Implementatiewet and an Implementatiebesluit; as of early 2026 neither was finalised, and the bill is being amended to reflect Omnibus.
Treat scope and timelines as provisional and confirm against EFRAG / EUR-Lex before relying on them.
ESRS — European Sustainability Reporting Standards
Source: Commission Delegated Regulation (EU) 2023/2772, Annex I. The 12-standard architecture (2 cross-cutting + 10 topical) is expected to survive the simplified revision; datapoints are being reduced.
| ESRS | Title | Pillar | Source |
|---|---|---|---|
| ESRS 1 | General requirements | Cross-cutting (architecture, double materiality) | EUR-Lex 2023/2772 |
| ESRS 2 | General disclosures | Cross-cutting (governance, strategy, IRO, metrics & targets) | EUR-Lex 2023/2772 |
| ESRS E1 | Climate change | Environmental | EUR-Lex 2023/2772 |
| ESRS E2 | Pollution | Environmental | EUR-Lex 2023/2772 |
| ESRS E3 | Water and marine resources | Environmental | EUR-Lex 2023/2772 |
| ESRS E4 | Biodiversity and ecosystems | Environmental | EUR-Lex 2023/2772 |
| ESRS E5 | Resource use and circular economy | Environmental | EUR-Lex 2023/2772 |
| ESRS S1 | Own workforce | Social | EUR-Lex 2023/2772 |
| ESRS S2 | Workers in the value chain | Social | EUR-Lex 2023/2772 |
| ESRS S3 | Affected communities | Social | EUR-Lex 2023/2772 |
| ESRS S4 | Consumers and end-users | Social | EUR-Lex 2023/2772 |
| ESRS G1 | Business conduct | Governance | EUR-Lex 2023/2772 |
IFRS Sustainability (ISSB)
Both effective for annual reporting periods beginning on or after 1 January 2024.
| Standard | Title | Scope | Source |
|---|---|---|---|
| IFRS S1 | General Requirements for Disclosure of Sustainability-related Financial Information | All sustainability risks & opportunities material to enterprise value; governance, strategy, risk management, metrics & targets | ifrs.org — S1 |
| IFRS S2 | Climate-related Disclosures | Climate-specific risks & opportunities; builds on TCFD + SASB industry metrics; used alongside S1 | ifrs.org — S2 |