Assessment of CSRD ESRS E1 requirements
Various criteria must be assessed to verify the conformity of the report with the different requirements of ESRS E1. In the table in the annex, each column represents a method/report and each row represents a criterion to be assessed. Below the criteria are defined by themes and the overall expectations are given, for the reporting assessment of the ESRS E1 standard of the CSRD (ESRS E1 data points are 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 Scope 2 GHG emissions must include:
gross GHG emissions on a "location based" basis (using local energy mix information)
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 GHG emission reductions or removals from climate 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 physical climate risks in its own operations and across its value chain, as well as 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 summarise the policies implemented by the organisation (and how they are implemented) to manage its climate-related 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 disclose a transition plan (with one or more transition pathways, a quantified action plan, the means for its implementation, an assessment of locked-in emissions...)
The report must indicate whether the company is or is not excluded from the European Paris-aligned benchmarks. It must also present an explanation of how the transition plan is integrated into the overall development strategy and financing timetable of the organisation. Also, this disclosure 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 (revenues) with Regulation (EU) 2020/852 on the taxonomy, including any delegated regulations related to mitigation and adaptation to climate change and its future alignment plans with the taxonomy.
According to ESRS E1-4 the organisation indicates whether and how it has set its emission reduction targets or any other targets to manage material impacts, risks and opportunities related to climate. GHG emission reduction targets must be presented, for all three scopes, in absolute values and, where relevant, in intensity values. GHG emission reduction targets must at least include target values for the year 2030 and, if available, for the year 2050. Furthermore the organisation indicates whether the GHG emission reduction targets are based on scientific data and consistent with limiting global warming to +1.5 °C.
On the actions of the transition plan
According to ESRS E1-1 The transition plan must contain an action plan detailing all the actions the organisation will take to achieve its decarbonisation objective and thus comply with the previously defined emission reduction pathway. It must also provide details of the investments and financing required to implement them.
On the reduction pathway
According to ESRS E1-1 The transition plan must contain one or more emission reduction pathways consistent with the applicable carbon budgets
On monitoring
According to ESRS E1-1 The report must present the state of progress of the organisation in implementing its transition plan. It must also present an assessment of "locked-in" emissions.
On neutralisation and mitigation projects
According to ESRS E1-7 The organisation must indicate the GHG removal and sequestration projects it may have developed from its own operations and within its upstream and downstream value chain, as well as the amount of GHG emission reductions or removals from climate mitigation projects outside its value chain and financed through the purchase of any type of carbon credits.
On the internal carbon price
According to ESRS E1-8 The organisation must disclose 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 objectives. The information should specify:
the type of internal carbon pricing system
the specific scope of application of the carbon pricing arrangements (activities, geographies, entities, etc...)
the carbon prices applied depending on the type of arrangement and the critical assumptions for determining 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 volumes of GHG emissions for Scopes 1, 2 and 3 in metric tonnes of CO2 equivalent (tCO2e) covered by these arrangements.
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