GetreadyforEuropeanSustainabilityReportingStandardsUnderstandingthefirstsetofESRSsAugust20232©2023KPMGIFRGLimited,aUKcompanylimitedbyguarantee.Allrightsreserved.GetreadyforEuropeanSustainabilityReportingStandardsWhat’snext?What’stheimpact?What’stheissue?•MakeyourselffamiliarwiththereportingrequirementsundertheESRSs.•Identifywhatyouwillberequiredtoreport.•Prepare:basedonaphasedtimeline,adoptionwillstartforthefirsttrancheofcompaniesforyearsbeginningonorafter1January2024.TheESRSsareambitiousandwillhaveasignificantimpactonthescope,volumeandgranularityofsustainability-relatedinformationtobecollectedanddisclosedbycompanies.Theyintroducetheconceptofdoublemateriality(themulti-stakeholderapproach)andexpandacompany’sreportingboundarytocovermaterialinformationacrossitsvaluechain.Acompanywillneedtoreportonhowitsactivitiesandvaluechainaffecttheenvironmentandpeople,aswellashowsustainability-relatedmattersaffectitscashflows,financialpositionandfinancialperformance.UndertheCSRD,manymorecompaniesintheEUwillneedtoprepareextensivesustainabilityreportsaspartoftheirmanagementreports.ESRSswillbeappliedby:•alllargeandmostlistedEUcompanies;•largesubsidiariesofnon-EUparents(groupexemptionsapply);and•non-EUcompanieswithaturnoverintheEUofmorethanEUR150million.InJuly2023theEuropeanCommission(EC)publishedthefinaltextofitsfirstsetofESRSs.Forthefirstwaveofcompanies,disclosureswillberequiredasearlyasthe2024reportingperiod1.AbbreviationsandkeytermsTheEUParliamentandtheEUCouncilnowhaveaperiodofuptopotentiallyfourmonthstoobject.IftheyraisenoobjectionsthenthisfirstsetofESRSswillapplyforthefirstcompaniesforFY2024.Whatdoyouneedtodonow?Whataboutassurance?Whatifyouhavealreadyadoptedotherframeworks?Whatreportingboundarydoyouneedtoconsider?Whatisdoublemateriality?Whatphase-inreliefswillapply?Whatwillcompaniesneedtodisclose?WhatareESRSsbasedon?WhenandtowhomwillESRSsapply?Whathasbeenreleased?13©2023KPMGIFRGLimited,aUKcompanylimitedbyguarantee.Allrightsreserved.10questionstostartgettingready01020304050607080910Whathasbeenreleased?WhenandtowhomwillESRSsapply?WhatareESRSsbasedon?Whatwillcompaniesneedtodisclose?Whatphase-inreliefswillapply?Whatisdoublemateriality?Whataboutassurance?Whatreportingboundarydoyouneedtoconsider?Whatifyouhavealreadyadoptedotherframeworks?Whatdoyouneedtodonow?Whatdoyouneedtodonow?Whataboutassurance?Whatifyouhavealreadyadoptedotherframeworks?Whatreportingboundarydoyouneedtoconsider?Whatisdoublemateriality?Whatphase-inreliefswillapply?Whatwillcompaniesneedtodisclose?WhatareESRSsbasedon?WhenandtowhomwillESRSsapply?Whathasbeenreleased?4©2023KPMGIFRGLimited,aUKcompanylimitedbyguarantee.Allrightsreserved.Tentopic-specificESRSs•Providetopic-specificdisclosurerequirementson:-governance;-strategy;and-impact,riskandopportunitymanagement.•Establishmetricsandexplainhowtodiscloserelatedtargetsforeachtopic.Twocross-cuttingESRSs•ExplainfundamentalconceptsfromtheCSRD.•Setcross-cuttingdisclosurerequirementsapplicabletoalltopicsfor:-governance;-strategy;-impact,riskandopportunitymanagement;and-metricsandtargets.•Provideprinciplesofdisclosureandpresentationstructure.•Establishtransitionoptions,includingphasing-in.Forfuturerelease:Sector-specificESRSs•Additionalstandardstoaddresssector-specificrequirementsareyettobedevelopedforlateradoption.Whathasbeenreleased?MetricsandtargetsImpact,riskand...