CSRD and ESRS will require many new companies to report on sustainability. We present reporting topics and explain how companies can comply with them and create value from them. Today, let's talk about industry specific sustainability topics.
ESRS brings a significant change from previous reporting. Previously, companies could choose which topics to report on based on their materiality analysis. ESRS now mandates certain sustainability issues that companies must report on depending on their industry.
1️⃣ What are industry sustainability issues?
Sustainability issues define sustainability reporting requirements depending on the company's industry. The basis is the industry classification. Every company belongs to an industry.
2️⃣ How are sectors defined and classified?
The European Union uses the NACE industry classification standard. The draft ESRS grouped NACE industries into 14 sector groups and 40 sectors, depending on similar sustainability aspects.
3️⃣ What are the sector-specific reporting requirements?
In ESRS, sector definitions have two effects: The sector determines sustainability aspects that a company must report on depending on the sector. And ESRS plans to disclose other sector-specific reporting requirements, such as sector specific indicators or measures that are currently under development.
4️⃣ How to do it?
In your strategy and materiality analysis, you need to include the sustainability topics predefined for your sector and assess their financial and impact materiality for the company. You need to comment in your reporting whether industry issues are material or not, and transparently justify whether certain issues are not material in your case. However, to be on the safe side, you should consider reporting on industry sustainability topics by default (and taking action in your strategy), as investors and stakeholders expect this.
👉 For medium-sized companies, the predefined industry topics are a help because they do not have to start the materiality analysis with a blank sheet of paper. Use them as the core for your sustainability measures and reporting and supplement them with other company-specific material topics.
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