Get ready for European Sustainability Reporting StandardsUnderstanding the first set of ESRSsAugust 20232© 2023 KPMG IFRG Limited, a UK company limited by guarantee. All rights reserved.Get ready for European Sustainability Reporting StandardsWhat’s next?What’s the impact?What’s the issue?•Make yourself familiar with the reportingrequirements under the ESRSs.•Identify what you will be required to report.•Prepare: based on a phased timeline, adoptionwill start for the first tranche of companies foryears beginning on or after 1 January 2024.The ESRSs are ambitious and will have a significant impact on the scope, volume and granularity of sustainability-related information to be collected and disclosed by companies.They introduce the concept of double materiality (the multi-stakeholder approach) and expand a company’s reporting boundary to cover material information across its value chain.A company will need to report on how its activities and value chain affect the environment and people, as well as how sustainability-related matters affect its cash flows, financial position and financial performance.Under the CSRD, many more companies in the EU will need to prepare extensive sustainability reports as part of their management reports.ESRSs will be applied by:•all large and most listed EU companies;•large subsidiaries of non-EU parents (groupexemptions apply); and•non-EU companies with a turnover in the EU ofmore than EUR 150 million.In July 2023 the European Commission (EC) published the final text of its first set of ESRSs. For the first wave of companies, disclosures will be required as early as the 2024 reporting period1.Abbreviations and key termsThe EU Parliament and the EU Council now have a period of u...
