ESRS Standard
ESRS Standard
38. The objective of this DR is to enable an understanding of how material climate-related physical risks, climate-related transition risks and climate-related opportunities are expected to affect the undertaking's financial position and future performance. Paragraphs 39 and 42 of this Standard add topical specifications to ESRS 2 SBM 3. The information required for this DR is part of the information on current and anticipated financial effects required under ESRS 2 SBM-3.
39. The undertaking shall disclose the anticipated financial effects from material physical risks, including:
(a) the carrying amount of assets at material physical risk before considering climate change adaptation actions, including the relevant time horizons;
(b) the percentage of the carrying amount of assets at material physical risk addressed by adaptation actions at the reporting date; and
(c) the monetary amount of net revenue from its business activities at material physical risk, including the relevant time horizons.
40. The undertaking shall disclose the anticipated financial effects from material transition risks, including:
(a) the carrying amount of assets at material transition risk, including the relevant time horizons, and a range of estimated potential stranded assets from the reporting year until the mid-term and long-term time horizons based on a scenario aligned with limiting climate change to 1.5°C;
(b) the percentage of the carrying amount of assets at material transition risk addressed by mitigation actions;
(c) a breakdown of the carrying amount of its real estate assets that have been used as loan collaterals by energy-efficiency classes;
(d) the estimated potential liabilities related to climate transition that do not meet the accounting recognition criteria at the reporting date but that may have to be recognised in financial statements in future periods; and
(e) the monetary amount of net revenue from its business activities at material transition risk and, if applicable, the net revenue from its customers operating in coal-, oil- and gas-related activities, including the relevant time horizons.
41. The undertaking shall disclose the methodology applied to quantify the amounts specified in paragraphs 39 and 40, including the scope adopted in the calculation, critical assumptions, parameters and limitations, and whether the calculation leverages on the process (e.g. scenario analysis) used to identify and assess transition risks.
42. The undertaking shall disclose the amount of assets or revenue from its business activities related to the identified climate-related opportunities, including their associated time horizons.
Application Requirements (AR)
Application Requirements (AR)
AR 29 for paras. 39–42 (Calculation approaches)
When disclosing the information required under paragraphs 39 to 42, the undertaking shall adopt the following approaches:
(a) consider the time horizons (short-, medium- and long-term) over which the effects of climate-related risk and opportunities could reasonably be expected to occur;
(b) include all of the types of the undertaking's own physical assets, including, in the case of a financial lease, the asset underlying the right-of-use;
(c) present the monetary amounts (or percentages) as either a single amount or range;
(d) present the carrying amount of assets as of the reporting date and the net revenue related to the reporting period;
(e) for paragraph 40(c), present the energy efficiency class in terms of either ranges of energy consumption in kWh/m2 or the Energy Performance Certificate (EPC) label class. If the undertaking cannot obtain this information without undue cost and effort, it shall disclose the total carrying amount of the real estate assets for which the energy consumption is based on internal estimates; and
(f) disclose net revenue and the carrying amount of assets, making it consistent with the financial statements.
AR 30 for paras. 39(c), 40(a) and 40(e) (Gross vs net)
When disclosing the information required in paragraph 39(c), 40(a) and 40(e), the undertaking shall explain whether the amount is assessed before or after mitigation actions.
AR 31 for para. 40(d) (Estimated potential liabilities)
If the undertaking discloses the information prescribed in paragraph 40(d) in its financial statement, it shall refer to it.
AR 32 for para. 41 (Location of assets)
When disclosing the methodology applied to quantify the amounts disclosed under paragraphs 39 and 40, the undertaking shall include where relevant the location of its assets at material physical risks aggregated in a way that supports faithful representation of its risks.
This article has been machine translated. In case of errors, please contact [email protected].