ESRS Standard
ESRS Standard
36. The objective of this DR is to enable an understanding of the outcome of the materiality assessment, in terms of material impacts, risks and opportunities and material information reported in accordance with ESRS.
37. The undertaking shall disclose:
(a) a concise description of its actual and potential, positive and negative material impacts, including how they affect or are likely to affect people or the environment, and its material risks and opportunities, specifying the related topics and how and where impacts, risks and opportunities are connected to its own operations and its upstream and downstream value chain;
(b) the basis for concluding that climate change is not material, if the undertaking has reached this conclusion and therefore omits all DRs in ESRS E1 Climate Change;
(c) changes related to its material impacts, risks and opportunities compared to the previous reporting period;
(d) a list of the DRs complied with in preparing the sustainability statement, allowing users to identify where the related disclosures are located in the sustainability statement and giving a separate indication of those that are incorporated by reference (see ESRS 1 General Requirements, Chapter 9.3);
(e) a list of 'supplementary' information provided in accordance with ESRS 1 General Requirements, Chapter 8.2;
(f) its exposure to heightened risk of incidents related to forced or compulsory labour and child labour by type of operations (such as manufacturing plants), or by countries or geographies, if the undertaking is connected through its own operations or its upstream and downstream value chain to material negative impacts related to forced or compulsory labour or child labour; and
(g) a table of all the datapoints that derive from other EU legislation as listed in Appendix A of this Standard, indicating where they can be found in the sustainability statement or, for those that the undertaking has assessed as not material, that they are 'not material'.
Note on paragraph 37(f):
This information supports the information needs of financial market participants subject to Regulation (EU) 2019/2088 because it is derived from additional indicators related to principal adverse impacts as set out by indicator # 12 and 13 in Table 3 of Annex I of Commission Delegated Regulation (EU) 2022/1288 with regard to disclosure rules on sustainable investments ("Operations and suppliers at significant risk of incidents of forced or compulsory labour" and "Operations and suppliers at significant risk of child labour").
Application Requirements (AR)
Application Requirements (AR)
AR 27 for para. 37(a)
The description of material risks and opportunities also covers the related dependencies to the extent necessary for an understanding of those risks and opportunities.
Paragraph 49 of ESRS 1 General Requirements applies in presenting the disclosure prescribed by this DR.
AR 28 for para. 37(a)
The undertaking may present the description of its material impacts, risks or opportunities in the same location as its disclosures on the related policies, actions, metrics and targets through which it manages them, in order to avoid duplication and support a coherent narrative. If the undertaking exercises this option, it shall still present a concise description of its material impacts, risks and opportunities alongside its disclosures prepared in accordance with IRO-2.
AR 29 for para. 37(d)
The undertaking may present the disclosure as a content index, i.e. a tabular list of the DRs included in the sustainability statement, to support the identification of where they are located (page/paragraphs). It may present the list of information incorporated by reference in an appendix within its sustainability statement, or may present the necessary information in the list of reported DRs as required in paragraph 37(d).
The undertaking may directly reference the DR numbers within its sustainability statement (e.g. in section headings or paragraph titles).
The undertaking may present the ‘supplementary’ information provided under paragraph 37(e) by highlighting it in the section headings, paragraph titles, or the aforementioned content index, so that it is clearly distinguished as supplementary.
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