Evaluation of CSRD ESRS E1 requirements
Various criteria must be assessed to verify the compliance of the report with the different requirements of ESRS E1. In the table in the appendix, each column represents a method/report and each row represents a criterion to be assessed. Below, the criteria are defined by theme and the overall expectations are given, for the reporting statement of the ESRS E1 standard of the CSRD (ESRS E1 data points being constantly evolving, for more information, we recommend referring to the bibliography).
On the Operational boundary
According to ESRS E1-6, the Organisation must report:
gross GHG emissions from Scope 1
gross GHG emissions from Scope 2
gross GHG emissions from Scope 3
total gross GHG emissions
The Organisation must include in its Reporting all GHG emissions (scope 1 and 2) over which it has operational control. It must also include scope 3 GHG emissions occurring in its value chain.
Gross GHG emissions from scope 2 must include:
gross GHG emissions on a "location based" basis (using information on the local energy mix)
and gross GHG emissions on a "market based" basis (using market-based information, depending on the electricity the Organisation chooses to purchase).
On energy consumption
According to ESRS E1-5, the Organisation must present its total energy consumption related to its own activities, from non-renewable sources and renewable sources, broken down by source. Where applicable, the Organisation must break down and present separately its non-renewable energy production and renewable energy production.
On avoided emissions and removals
According to ESRS E1-7, the Organisation must report the GHG removal and sequestration projects it has developed in its value chain, as well as the amount of reductions or removals of GHG emissions in the context of climate change mitigation projects outside its value chain and financed through the purchase of any type of carbon credits.
On risk identification
The Organisation must describe the process for identifying and assessing climate-related impacts, the analysis of climate-related Physical risks in its own operations and across its value chain, as well as climate-related transition risks and opportunities in its own operations and across its value chain.
On adaptation and mitigation policies
According to ESRS E1-2, the report must summarize the policies implemented by the Organisation (and how they are implemented) to manage its impacts, risks and opportunities related to:
mitigation and adaptation to climate change
energy efficiency
the deployment of renewable energies
On the Transition Plan
According to ESRS E1-1, the Organisation must report a Transition Plan (with one or more transition pathways, a quantified Action plan, the means enabling its implementation, an assessment of locked-in emissions...)
The report must indicate whether or not the company is excluded from the European benchmarks of the Paris Agreement. It must also provide an explanation of how the Transition Plan is integrated into the overall development strategy and the Organisation's financing plan. Also, this reporting must state whether this Transition Plan is approved by the Organisation's administrative, management and supervisory bodies; if the Organisation does not have a Transition Plan, this chapter must then detail whether and if so, when it will adopt one.
On the vision and objectives of the Transition Plan
According to ESRS E1-1, if applicable, an explanation of the objective pursued by the company to align its economic activities (revenue) with the Taxonomy Regulation (EU) 2020/852, including all delegated regulations related to climate change mitigation and adaptation and its future alignment plans with the taxonomy.
According to ESRS E1-4, the Organisation indicates whether and how it has set its emissions reduction targets or any other target allowing it to manage material climate-related impacts, risks and opportunities. GHG emissions reduction targets must be presented, for all three scopes, in absolute terms and, where relevant, in intensity terms. GHG emissions reduction targets must include target values at least for 2030 and, if available, for 2050. In addition, the Organisation indicates whether the GHG emissions reduction targets are science-based and compatible with limiting global warming to +1.5 °C.
On Transition Plan actions
According to ESRS E1-1, the Transition Plan must contain an action plan detailing all the actions the Organisation will take to achieve its decarbonization objective and thus comply with the previously defined emissions reduction trajectory. It must also provide details of the investments and financing enabling them to be implemented.
On the reduction trajectory
According to ESRS E1-1, the Transition Plan must contain one or more emissions reduction trajectories in line with the current carbon budgets
On Monitoring
According to ESRS E1-1, the report must present a snapshot of the Organisation's progress and advancement in implementing its Transition Plan. It must also present an assessment of "locked-in" emissions.
On neutralization and mitigation projects
According to ESRS E1-7, the Organisation must indicate the GHG removal and sequestration projects it has been able to develop from its own operations and across its upstream and downstream value chain, as well as the amount of reductions or removals of GHG emissions from climate change mitigation projects outside its value chain and financed through the purchase of any type of carbon credits.
On internal carbon pricing
According to ESRS E1-8, the Organisation must report whether it applies internal carbon pricing systems, and if so, how these support its decision-making and encourage the implementation of climate-related policies and targets. The information must specify:
the type of internal carbon pricing system
the specific scope of the carbon pricing arrangements (activities, geographies, entities, etc...)
the carbon prices applied depending on the type of arrangement and the critical assumptions used to determine the prices, including the source of the carbon prices applied and why these are considered relevant for the chosen application
for the current year, the approximate gross GHG emissions volumes for Scopes 1, 2 and 3 in metric tonnes of CO2 equivalent (tCO2e) covered by these arrangements.
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