1. the objective of the European Sustainability Reporting Standards (ESRS) is to set out the sustainability information that a company is required to disclose in accordance with Directive 2013/34/EU of the European Parliament and of the Council (1), as amended by Directive (EU) 2022/2464 of the European Parliament and of the Council(2). Reporting in accordance with the ESRS does not exempt companies from other obligations set out in Union law.

2 In particular, the ESRS set out the information that a company is required to disclose about its material impacts, risks and opportunities relating to environmental, social and governance aspects of sustainability . The ESRSs do not require an entity to disclose information on environmental, social and governance topics covered by the ESRSs if it has assessed the topics in question as not material (see the flowchart for determining the disclosures to be made in Appendix E of this standard). The information disclosed in accordance with the ESRS enables Users of the sustainability statement to understand the company's material impacts on people and the environment and the material effects of sustainability issues on the company's development, performance and position.

3. the objective of this standard (ESRS 1) is to provide an understanding of the structure of the ESRS, the drafting principles and underlying policies, and the general requirements for the preparation and presentation of sustainability information in accordance with Directive 2013/34/EU as amended by Directive (EU) 2022/2464.

4 There are three categories of ESRS:

5 General and thematic standards are sector-independent, i.e. they apply to all companies, regardless of the sector or sectors in which the company operates.

6 The general standards ESRS 1 General Requirements and ESRS 2 General Disclosures apply to the aspects of sustainability covered by topic-related and sector-specific standards.

7 This standard (ESRS 1) describes the structure of the ESRS, explains the formulation principles and underlying policies, and sets out general requirements for the preparation and presentation of sustainability-related information.

8. topic-related ESRSs cover a sustainability topic and are divided into topics and subtopics and, if necessary, sub-sub-topics. The table in Application Requirement (AR) 16 to this standard provides an overview of the sustainability-related topics, subtopics and sub-sub-topics (together "sustainability aspects") covered by topic-based ESRSs.

9 Topic-based ESRSs may contain specific requirements that supplement the general disclosure requirements of ESRS 2. ESRS 2 Installation C Disclosure requirements/application requirements in topic-based ESRSs that apply together with the general disclosure requirements of ESRS 2 contains a list of additional requirements in topic-based ESRSs that the company must fulfill together with the general disclosure requirements of ESRS 2.

10 Sector-specific standards apply to all entities within a sector. They address Impacts, Risks and Opportunities that are likely to be material to all entities in a particular sector and that are not covered, or not sufficiently covered, by topic-specific standards. Sector-specific standards are multi-thematic and cover the topics that are most important for the sector in question. A high degree of comparability is achieved with sector-specific standards.

11 If the company concludes that Impacts, Risks or Opportunities that are not covered by an ESRS or are covered with insufficient granularity are nevertheless material due to their specific facts and circumstances, it provides further company-specific disclosures in addition to the disclosures defined in the three ESRS categories to enable Users to understand the company's Sustainability-related impacts, Risks or Opportunities . The application requirements AR 1 to AR 5 contain further guidelines with regard to company-specific disclosures.

12 The disclosure requirements in ESRS 2, in topic-related ESRSs and in sector-specific ESRSs are divided into the following reporting areas:

13 ESRS 2 includes the following:

The company applies the Minimum Disclosure Requirements in relation to Policies, Actions, Metrics and Targets together with the corresponding disclosure requirements of the topic-specific and sector-specific ESRSs.

14 In all ESRSs, the term

These are collectively referred to as "Impacts, Risks and Opportunities" (IRO). They reflect the principle of Double materiality of ESRS described in section 3.

(15) In all ESRSs, terms defined in the Glossary of Definitions (Appendix II) are shown in bold italics unless a defined term is used more than once in the same paragraph.

16 The ESRSs set out the information to be disclosed under the disclosure requirements in a structured manner. Each disclosure requirement consists of one or more different data points. The term "data point" may also refer to a descriptive sub-element of a disclosure requirement.

17 In addition to the disclosure requirements, most ESRSs also include application requirements. Application requirements support the application of the disclosure requirements and have the same binding force as the other parts of an ESRS.

18 The ESRSs distinguish between the different levels of an entity's disclosure requirements as follows:

In addition, the ESRSs use the phrases "shall consider", "shall consider" or "shall consider" when referring to topics, resources or methods that the company is expected to consider or use, as appropriate, in preparing the relevant disclosures.

19 In preparing its sustainability statement , the company shall apply the following:

20 These qualitative characteristics of information are defined and described in Installation B of this standard.

21 The company reports on sustainability aspects on the basis of the principle of Double materiality defined and explained in this chapter.

22 Stakeholders are persons or groups that influence the company or can be influenced by it.

can be influenced by it. There are two main groups of stakeholders:

(23) Some, but not all, stakeholders may belong to both groups referred to in paragraph 22.

24. engagement with affected stakeholders is critical to the company's ongoing due diligence process (see chapter 4 Due diligence) and the analysis of sustainability-related Materiality . This includes the processes for identifying and assessing actual and potential negative impacts, which then feed into the assessment process to determine the material impacts for the purposes of sustainability reporting (see section 3.4 of this standard).

25 . conducting a materiality analysis(see sections 3.4 Impact materiality and 3.5 Financial materiality) is required to enable the company to identify reportable material impacts, risks and opportunities .

26 The materiality analysisis the starting point for sustainability reporting under ESRS. IRO-1 in section 4.1 of ESRS 2 contains general disclosure requirements regarding the process to be used by the company to identify Impacts, Risks and Opportunities and to analyze their Materiality. SBM-3 of ESRS 2 contains general disclosure requirements on the material impacts, risks and opportunities arising from the entity's materiality analysis.

27 The application requirements in Installation A of this standard contain a list of the sustainability aspects that are addressed in the topic-based ESRSs and categorized by topic, subtopic and sub-subtopic for use in the materiality analysis. Installation E Flowchart for determining the disclosures to be included in this standard illustrates the materiality analysis described in this section.

28 A sustainability aspect is "material" if it meets the criteria for Impact materiality (see section 3.4 of this standard) or Financial materiality (see section 3.5 of this standard), or both.

29 Regardless of the outcome of its materiality analysis, the entity must always provide the information required by ESRS 2 General Disclosures (i.e. all disclosure requirements and data points set out in ESRS 2) and the disclosure requirements (including their data points) in topic-based ESRSs in connection with the disclosure requirement IRO-1 Description of the processes for identifying and evaluating material Impacts, Risks and Opportunities in accordance with ESRS 2 Installation C Disclosure Requirements/Application Requirements in Topic-based ESRSs that apply together with the ESRS 2 General Disclosure Requirements .

30 If, based on a Materiality Analysis, the company concludes that a sustainability aspect for which disclosure requirements are set out in ESRS 2 IRO-1, IRO-2 and SBM-3 is material, it shall

31 Relevant information required by a disclosure requirement (including its data points) or an entity-specific disclosure shall be disclosed if the entity has assessed it as relevant from one or more of the following perspectives as part of its materiality analysis:

32 If the company concludes that climate change is not material and therefore omits the disclosures required by the disclosure requirements in ESRS E1 Climate Change , it shall disclose in detail the conclusions of its materiality analysisin relation to climate change (see ESRS 2 IRO-2 Disclosure Requirements Covered in the Company's Sustainability Communication), including a forward-looking analysis of conditions that may cause the company to consider climate change to be material in the future. If the company concludes that a topic other than climate change is not material and therefore omits all disclosures required by the disclosure requirements in a topic-based ESRS, it may briefly explain the conclusions of its materiality analysis for that topic.

33 When disclosing information on Policies, Actions and Targets related to a sustainability aspect that has been assessed as material, the company shall include the information required by all disclosure requirements and data points of the thematic and sector ESRSs on that aspect and the corresponding Minimum Disclosure Requirement on Policies, Actions and Targets under ESRS 2. If the entity is unable to disclose the information required by the disclosure requirements and data points of the thematic or sector-specific ESRS or by the Minimum Disclosure Requirement of ESRS 2 on Policies, Actions and Targets because it has not adopted the relevant Policies, implemented the relevant Actions or set the relevant Targets, it must disclose this and may disclose a timeframe within which it intends to do so

34. if the company discloses information on Metrics for a Material Aspect of sustainability in accordance with the Metrics and Targets section of the thematic current ESRS,

(35) If the entity omits information required by a data point that is required by other EU legislation listed in Installation B of ESRS 2, the entity explicitly states that the information is 'not material'.

36 The entity specifies how it applies criteria (including appropriate thresholds) to determine the following:

37 Double materiality has two dimensions: Impact materiality and Financial materiality. Unless otherwise stated, the terms 'material' and 'materiality' are used throughout the ESRS to refer to Double materiality.

38. the analyses of Impact materiality and Financial materiality are interrelated and the interactions between these two dimensions should be considered. In general, the impact assessment is the starting point, although there may be material risks and opportunities that are not related to the organization's impacts . A Sustainability-related impacts can be financially material from the outset or become financially material if it can reasonably be expected to affect the company's financial position, financial performance, cash flows, access to finance or cost of capital in the short, medium or long term. Impact materiality is recognized regardless of whether it is financially material.

39. in identifying and analyzing the impacts, risks and opportunities in the company's value chain to determine their materiality , the company focuses on areas where impacts, risks and opportunities are considered likely due to the nature of the respective activities, business relationships, geographical circumstances or other factors.

40. the company shall consider how it is affected by its dependence on the availability of natural, human and social resources at reasonable prices and of reasonable quality, regardless of its potential impacts on those resources.

41 . the company's most significant impacts, Risks and Opportunities are in line with the material ones therefore disclosed in its sustainability statement .

42 The company shall apply the criteria set out in sections 3.4 and 3.5 of this standard using appropriate quantitative and/or qualitative thresholds. Appropriate thresholds are required to determine which Impacts, Risks and Opportunities are material to the entity and are treated accordingly, and to determine which sustainability aspects are material for the purposes of reporting. In some existing standards and frameworks, the term "most material impact" is used when referring to the threshold used to determine the impacts that are described as "material impacts" in the ESRS.

43 A sustainability aspect is material in terms of impacts if it relates to the company's significant actual or potential, positive or negative impacts on people or the environment within short, medium or long-term time horizons. Impacts include those associated with the company's own operations and its upstream and downstream value chain, including through its products and services and through its business relationships. Business relationships include the company's upstream and downstream value chain and are not limited to direct contractual relationships.

44 In this context, impacts on people or the environment include impacts related to environmental, social and governance aspects.

45 The analysis of the materiality of negative impacts is based on the due diligence process set out in the international instruments of the United Nations Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises. For actual negative impacts, materiality is based on the severity of the impact; for potential negative impacts, materiality is based on the severity and likelihood of the impact. The severity is based on the following factors:

Incident of potential negative impacts on human rights, the severity of the impacts takes precedence over their likelihood.

46. with regard to positive impacts, materiality is based on

47 The scope of financial materiality for sustainability reporting is an extension of the scope of materiality used in determining the information that should be included in the company's financial statements.

48 The process for analyzing Financial materiality is the same as identifying information that is considered material to the primary users of general purpose financial reporting when making decisions about resources to be allocated to an entity. In particular, information is considered material to the primary users of general purpose financial reporting if it is reasonable to expect that an omission, misstatement or concealment of that information may impact decisions they make based on the entity's sustainability statement .

49 A sustainability aspect is material from a financial point of view if it has significant financial effects on the company or if these are reasonably expected. This is the case if a sustainability aspect gives rise to risks or opportunities that have a material impact on the company's development, financial position, results of operations, cash flows, access to funds or cost of capital in the short, medium or long term (or if such an impact can reasonably be expected). Risks and Opportunities may arise from past or future events. Financial materiality of a sustainability aspect is not limited to aspects that fall under the control of the company, but also includes information on material risks and opportunities that are attributable to business relationships outside the scope of consolidation used in the preparation of the financial statements.

50. dependencies on natural, human and social resources can be causes of financial Risks or Opportunities . Dependencies can impact in two different ways:

51. the materiality of risks and opportunities is assessed on the basis of a combination of the probability of occurrence and the potential extent of the financial effects .

52 The company's materiality analysismay lead to the identification of situations in which its actions to manage certain impacts or risks or to take advantage of certain opportunities related to one sustainability aspect could have material negative impacts or material risks related to one or more other sustainability aspects . Examples:

53 In such situations, the entity does the following:

54 Where necessary for a fair understanding of its material impacts, risks and opportunities , the company disaggregates the material adverse

the company disaggregates the reported information as follows:

55 In determining the appropriate level of disaggregation for reporting, the entity shall consider the disaggregation used in its materiality analysis. Depending on the facts and circumstances of the entity, a breakdown by subsidiary may be required.

56 When aggregating data from different levels or from multiple sites within a level, the entity shall ensure that the aggregation does not obscure the specificity and context necessary to interpret the information. The entity shall not aggregate material elements that have different characteristics.

57. where the undertaking provides information broken down by sector, it shall use the ESRS sector classification to be specified in a delegated act adopted by the Commission in accordance with point (ii) of the third subparagraph of Article 29b(1) of Directive 2013/34/EU. Where a thematic or sectoral ESRS requires a certain level of disaggregation to be applied in the compilation of a particular element of information, the requirement in the thematic or sectoral ESRS shall take precedence.

58 The results of the sustainability due diligence process (referred to as "due diligence" in the international instruments referred to below) are included in the company's assessment of Material Impacts, Risks and Opportunities . The ESRS do not contain a code of conduct in relation to sustainability due diligence, nor do they extend or change the role of the company's Administrative, management and supervisory bodies in relation to the exercise of due diligence.

59 Due diligence is the process by which companies identify, prevent, mitigate and account for the actual and potential negative impacts on the environment and people associated with their business activities. These negative impacts include those associated with the company's own business activities and its upstream and downstream value chain, including through its products or services and through its business relationships. Due diligence is a continuous process of responding to changes in the company's strategy, business model, operations, business relationships, operating, sourcing and sales context, and may trigger such changes. This process is described in the international instruments of the United Nations Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises.

60 These international instruments set out a number of steps in the due diligence process, including the identification and assessment of adverse impacts associated with the company's operations and upstream and downstream value chain, including through its products or services and through its business relationships. If the company cannot address all impacts at the same time, the due diligence process allows for prioritization of actions based on the severity and likelihood of impacts. This aspect of the due diligence process feeds into the assessment of Impact materiality (see section 3.4 of this standard). Identifying material impacts also helps to identify material risks and opportunities related to sustainability, which are often a product of such impacts.

61 The core elements of due diligence are directly reflected in the disclosure requirements set out in ESRS 2 and the thematic ESRS as shown below:

62 The sustainability statement applies to the same reporting company as the financial statements. For example, if the reporting company is a parent company that is required to prepare consolidated financial statements, the sustainability statement applies to the group of companies. This requirement does not apply if the reporting entity is not required to prepare financial statements or if the reporting entity prepares consolidated sustainability reporting in accordance with Article 48i of Directive 2013/34/EU.

63 The information on the reporting company contained in the sustainability statement is supplemented by information on the material impacts, risks and opportunities associated with the company through its direct and indirect business relationships in the upstream and/or downstream value chain (hereinafter "value chain information"). In supplementing the Reporting Entity Information, the Reporting Entity considers material Impacts, Risks and Opportunities associated with its upstream and downstream value chain:

64 Paragraph 63 does not require information on each individual actor in the value chain, but only the disclosure of material information on the upstream and downstream value chain. Different aspects of sustainability may be material in relation to different parts of the company's upstream and downstream value chain. Only information related to the parts of the value chain for which the aspect is material shall be included.

65 The company shall consider material value chain information when necessary to

66 When determining at which level (within its own operations and its upstream and downstream value chain) a material sustainability aspect exists, the company shall base its assessment of Impacts, Risks and Opportunities on the principle of Double materiality (see Chapter 3 of this Standard).

67 If associates or joint ventures accounted for using the equity method or proportionately consolidated in the financial statements are part of the entity's value chain (for example, as suppliers), the entity shall provide information about those associates or joint ventures in accordance with paragraph 63, consistent with the approach for other relationships in the value chain. In this case, the data of the associate or joint venture is not limited to the shares held when determining impact metrics, but is based on the impacts associated with the entity's business relationships with its products and services.

68 Whether the entity is able to obtain the necessary information about the upstream and downstream value chain may depend on various factors, such as the entity's contractual arrangements, the degree of control it exercises over the transactions outside the scope of consolidation and its buying power. If the entity is not able to control the activities in its upstream and downstream value chain and in its business relationships, it may be more difficult to obtain value chain information.

69 In some circumstances, the entity may not be able to obtain the information about its upstream and downstream value chain (even after reasonable efforts) in accordance with paragraph 63. Incidentally, the entity estimates the reportable information about its upstream and downstream value chain using all reasonable and supportable information, such as sector averages and other approximations.

70. obtaining value chain information could be challenging for SMEs and other companies in the upstream and/or downstream value chain that are not within the scope of sustainability reporting required under Articles 19a and 29a of Directive 2013/34/EU (see ESRS 2 BP-2 Disclosures related to specific circumstances).

71 With regard to Policies, Actions and Targets , the company's reporting includes information on the upstream and/or downstream value chain to the extent that these Policies, Actions and Targets relate to value chain actors . With regard to Metrics , in many cases - especially for environmental matters where approximations are available - the company can fulfill the reporting requirements without collecting data from its upstream and downstream value chain actors (especially SMEs), e.g. when calculating the company's Scope 3 greenhouse gas emissions.

72 The inclusion of estimates using sector average data or other approximations shall not result in information that does not meet the qualitative characteristics of information (see Chapter 2 and Section 7.2 Sources of estimates and uncertainty of results of this standard).

73 The reporting period for the company's sustainability statement is the same as the reporting period for the company's financial statements.

74 Where appropriate, the company makes appropriate links between retrospective and forward-looking information in its sustainability statement to provide a clear understanding of how historical information relates to forward-looking information.

75 A base year is the historical reference date or period for which information is available and against which subsequent information can be compared over time.

subsequent information can be compared over time.

76. the entity presents comparative information for the base year on amounts reported in the current period when reporting developments and progress towards a target, unless the relevant disclosure requirement already specifies how progress is to be reported. In addition, the company may provide historical information on milestones achieved between the base year and the reporting period if this is relevant information.

77 When preparing its sustainability statement , the company defines the following intervals at the end of the reporting period

time intervals:

78 . the company uses an additional breakdown for the long-term time horizon if Impacts or Actions are expected to occur over a period of more than five years, if this is necessary to provide relevant information to Users of sustainability statements .

79 Where different definitions for medium or long-term time horizons are required in relation to specific elements of the disclosure in other ESRSs, the definitions in those ESRSs take precedence.

80. there may be circumstances in which medium- or long-term time horizons referred to in paragraph 77 do not result in relevant information if the entity uses different definitions (i) for its processes for identifying and managing Material Impacts, Risks and Opportunities or (ii) for setting its Actions and Targets . These circumstances may be due to industry-specific characteristics, such as cash flows and business cycles, the expected duration of capital investments, the time horizons over which Users of sustainability statements perform their assessments, or the planning horizons commonly used for decision-making in the company's industry. In these circumstances, the entity may use a different definition for medium and/or long-term time horizons (see ESRS 2 BP-2 paragraph 9).

81 The terms 'short-term', 'medium-term' and 'long-term' in ESRS refer to the time horizon determined by the entity in accordance with the provisions of paragraphs 77 to 80.

82 This chapter contains general requirements to be observed when preparing and presenting sustainability information.

information.

83 The company shall present comparative information for the previous reporting period for all quantitative Metrics and monetary amounts reported in the current period. If relevant to an understanding of the current period's sustainability statement , the company also provides comparative information for descriptive disclosures.

84 If the company reports comparative information that differs from the information reported in the previous period, it shall disclose the following:

85 The restatement of comparative information for one or more prior periods to achieve comparability with the current period may not be practicable in certain circumstances. For example, data in the prior reporting period(s) may not have been collected in a manner that permits retrospective application of a new definition of a Metrics or Targets or retrospective restatement to correct an error from the prior period, and it may not be practicable to restate the information (see ESRS 2 BP-2). If restatement of comparative information for one or more prior periods is impracticable, the entity discloses that fact.

86 If an ESRS requires the entity to present more than one comparative period for a Metrics or data point, the requirements of that ESRS apply.

87 If quantitative Metrics and monetary amounts, including information about the upstream and downstream value chain (see Chapter 5 of this standard), cannot be measured directly and can only be estimated, measurement uncertainty may arise.

88 A company provides information that enables Users to understand the key uncertainties that impact the quantitative Metrics and monetary amounts disclosed in its sustainability statement.

89. the use of reasonable assumptions and estimates, including Scenario or sensitivity analyses, is an essential element in the preparation of sustainability-related information and does not affect the usefulness of this information, provided that the assumptions and estimates are described and explained in detail. Even a high degree of measurement uncertainty would not necessarily mean that such assumptions or estimates would not provide useful information or meet the qualitative characteristics of the information (see Installation B of this standard).

90. data and assumptions used in preparing the sustainability statement shall be consistent, as far as possible, with the corresponding financial data and assumptions used in the entity's financial statements.

91 Some ESRSs require the disclosure of certain information, such as explanations of possible future events with an uncertain outcome. In assessing whether information about such possible future events is material, the entity relies on the criteria set out in Chapter 3 of this Standard and considers the following:

92. in assessing the possible consequences, the entity shall consider all relevant facts and circumstances, including information about low probability outcomes and significant outcomes that could become material when considered together. For example, the entity might be exposed to multiple Impacts or Risks that could all cause the same type of disruption, such as disruptions in the entity's supply chain . Information about a single source of risk may not be material if disruptions from that source are very unlikely. However, information about the overall risk of disruption to the Supply chain from all sources could be material (see ESRS 2 BP-2).

93 The entity may receive information after the end of the reporting period but before the management report is authorized for issue. If that information provides evidence or understanding of conditions that existed at the end of the reporting period, the company updates the sustainability estimates and disclosures to reflect the new information, if appropriate.

94. if this information provides evidence or understanding of material transactions, other events and conditions that occur after the end of the reporting period, the company provides explanatory information, if appropriate, indicating the existence, nature and possible consequences of these events.

95 The definition and calculation of Metrics, including those used to set Targets and monitor progress towards achieving those Targets, shall be consistent over time. The entity shall present restated comparatives, unless impracticable (see ESRS 2 BP-2), in the following cases

96 The entity shall correct material errors from previous reporting periods by disclosing the comparative amounts for the period(s) unless it is impracticable to do so. This requirement does not apply to periods prior to the entity's first year of applying ESRS.

97 Omissions and misstatements in the company's sustainability statement for one or more prior periods constitute errors in prior reporting periods. Such errors result from the non-use or incorrect use of reliable information,

98. these errors include: the impacts of mathematical errors, errors in the application of definitions of Metrics or Targets, overlooking or misinterpreting facts, and fraud.

99 Potential errors in the current reporting period that are identified during this period should be corrected before the management report is authorized for issue. Occasionally, however, material errors are not detected until later reporting periods.

100. if it is not practicable to determine the impacts of an error on all prior periods, the entity shall restate the comparative information to correct the error from the earliest date practicable. When correcting disclosures for a prior period, the entity does not make retrospective assumptions about what management's intentions were in a prior period or estimate the amounts disclosed in a prior period. This requirement applies to the correction of both retrospective and prospective information.

101 Corrections of errors should be distinguished from revisions to accounting estimates. Estimates may need to be revised if additional information becomes available (see ESRS 2 BP-2).

102 When reporting on a consolidated basis, the entity makes an assessment of the material impacts, risks and opportunities for the entire consolidated group, regardless of the legal structure of the group. It ensures that all subsidiaries are considered in such a way that material impacts, risks and opportunities can be identified without bias. The criteria and thresholds for assessing Impacts, Risks or Opportunities as material shall be determined on the basis of Chapter 3 of this Standard.

(103) If the entity identifies material differences between the material impacts, risks or opportunities at group level and the material impacts, risks or opportunities of one or more of its subsidiaries, the entity provides an appropriate description of the impacts, risks and opportunities of the subsidiary(ies) concerned.

104 When assessing whether the differences between the material impacts, risks or opportunities at group level and the material impacts, risks or opportunities of one or more of its subsidiaries are material, the entity may consider various circumstances, such as whether the subsidiary or subsidiaries operate in a different industry to the rest of the group or whether the circumstances set out in section 3.7 Level of disaggregation should be considered.

105 The company is not required to disclose Classified information or Confidential information , even if it is considered Materiality.

106. when disclosing information about its strategies, plans and actions , if a particular piece of information relating to intellectual property, know-how or the results of innovation is relevant to achieving the Targets of a disclosure obligation, the company may nevertheless omit the information in question if

107 . if the company omits Classified information or confidential information or a specific piece of information relating to intellectual property, know-how or the results of innovation because it meets the criteria set out in the preceding paragraph, the company shall comply with the relevant disclosure obligation by disclosing all other information.

108 The company shall make all reasonable efforts to ensure that, beyond the omission of Classified information or confidential information or the specific information relating to intellectual property, know-how or the results of innovation, the overall relevance of the relevant disclosures is not impaired.

109 When reporting on opportunities , the disclosure should consist of descriptive information that enables the reader to understand the opportunities for the company or the sector as a whole. When reporting on opportunities, the company must consider the Materiality of the information to be disclosed. In this context, it must consider, among other things,

110 This chapter describes the basis for presenting the information on sustainability aspects (i.e. the sustainability statement) that is prepared in accordance with Articles 19a and 29a of Directive 2013/34/EU and as part of the company's management report. This information is presented in a separate section of the management report entitled "Sustainability statement". Installation F Example of the structure of the ESRS sustainability statement of this standard contains an illustrative example of a sustainability statement structured in accordance with the requirements of this chapter.

111 The following must be observed when presenting sustainability information:

112 With the exception of the option to incorporate information by reference in accordance with section 9.1 Incorporation of information by reference of this standard, the company shall include all disclosures required by the ESRS in accordance with Chapter 1 of this standard in a separate section of the management report.

113 The company shall include in its sustainability statement the disclosures required by Article 8 of Regulation (EU) 2020/852 of the European Parliament and of the Council (8) and the Commission Delegated Regulations specifying the content and other terms of those disclosures. The company shall ensure that these disclosures are separately identifiable in the sustainability statement. The information on each of the environmental objectives set out in the Taxonomy Regulation shall be presented together in a clearly identifiable section of the environmental part of the sustainability statement. These disclosures are not subject to the provisions of the ESRS, with the exception of this paragraph and the first sentence of paragraph 115 of this Standard.

114. if the company includes additional disclosures in its sustainability statement that are required by (i) other legislation that requires the company to disclose sustainability information, or (ii) generally accepted sustainability reporting standards and frameworks, including non-binding guidance and industry-specific guidance published by other standard-setting bodies (e.g. technical material from the International Sustainability Standards Board or the Global Reporting Initiative), these disclosures shall be subject to the following:

115 The company shall organize its sustainability statement into four parts in the following order: general information, environmental information (including information in accordance with Article 8 of Regulation (EU) 2020/852), social information and governance information. Subject to the provisions contained in Section 3.6 Material Impacts or Risks Arising from Actions to Address Sustainability Aspects of this Standard, if the information disclosed in one part includes information required to be disclosed in another part, the company may refer in one part to the information contained in another part to avoid duplication. The entity may use the structure set out in detail in Installation F of this Standard.

116 The disclosures required by sector-specific ESRSs are grouped by reporting area and, where appropriate, by sustainability topic. They are presented together with the disclosures required by ESRS 2 and the relevant topic-specific ESRSs.

117 If the company prepares material company-specific disclosures in accordance with paragraph 11, it shall provide these disclosures together with the most relevant non-sector-specific and sector-specific disclosures.

118 The company shall provide information that enables Users of its sustainability statement to understand the links between the different pieces of information in the statement and between the information in the sustainability statement and other information that the company provides in other parts of its corporate reporting.

119 Provided that the conditions set out in paragraph 120 are met, information required by a disclosure requirement of an ESRS, including a specific data point required by a disclosure requirement, may be incorporated into the sustainability statement by reference to the following:

120 The company may incorporate information by reference to the documents listed in paragraph 119 or parts of those documents, provided that the information incorporated by reference

121 Where the conditions set out in paragraph 120 are met, information required by a disclosure requirement of an ESRS (including a specific data point required by a disclosure requirement) may be included in the sustainability statement by reference to the company's report prepared in accordance with Regulation (EU) No 1221/2009 on the European Eco-Management and Audit Scheme (EMAS) (12). In this case, the company shall ensure that the information incorporated by reference is prepared on the same basis for the preparation of the ESRS information, including the scope of consolidation and the treatment of value chain information.

122 When preparing its sustainability statement using incorporation by reference, the company shall pay attention to the consistency of the reported information and ensure that the incorporation by reference does not impair the readability of the sustainability statement. Installation G Example of incorporating information by reference of this standard contains an illustrative example of incorporation by reference (see ESRS 2 BP-2).

123 The entity describes the relationships between different pieces of information. This may require linking explanatory information about governance, strategies and risk management to related Metrics and Targets . For example, to provide related information, the entity may need to explain the impacts or likely impacts of its strategy on its financial statements or financial plans, or how its strategy relates to the Metrics and Targets used in measuring progress against performance. In addition, the company may need to explain how its use of natural resources and changes within its supply chain could increase, change or decrease its material impacts, risks and opportunities . It may need to link this information to information on the current or anticipated financial effects on its production costs, its strategic response to mitigate such impacts or Risks and its related investments in new assets. In addition, the entity may need to link descriptive information to the relevant Metrics and Targets and the information in the financial statements. Information describing linkages must be clear and concise.

124. if the sustainability statement contains monetary amounts or other quantitative data points that are above a materiality threshold and are presented in the financial statements (direct link between the information disclosed in the sustainability statement and the information disclosed in the financial statements), the entity shall include a reference to the relevant paragraph of its financial statements where the relevant information can be found.

125 The sustainability statement may include monetary amounts or other quantitative data points that are above a materiality threshold and that are either an aggregation or a subset of monetary amounts or quantitative data presented in the company's financial statements (indirect link between the information disclosed in the sustainability statement and the information disclosed in the financial statements). In this case, the company explains how these monetary amounts or data points in the sustainability statement relate to the most relevant amounts disclosed in the financial statements. This disclosure shall include a reference to the line item and/or relevant paragraphs of its financial statements where the relevant information can be found. Where appropriate, a reconciliation may be provided, which may be presented in tabular form.

126 For information not covered by paragraphs 124 and 125, the company explains, on the basis of a materiality threshold, the extent to which the significant data, assumptions and qualitative information included in its sustainability statement are consistent with the corresponding data, assumptions and qualitative information in the financial statements. This may be the case if the sustainability statement contains the following:

127. the consistency required by paragraph 126 shall be at the level of an individual data point and a reference shall be made to the relevant line item or paragraph in the notes to the financial statements. If material data, assumptions and qualitative information are inconsistent, the entity shall disclose that fact and explain why.

128 An explanation in accordance with paragraph 126 is required, for example,

129 Topic-specific and sector-specific ESRSs may include requirements to include reconciliations or to illustrate the consistency of data and assumptions for certain disclosure requirements. In such cases, the requirements of these ESRSs take precedence.

130 It is expected that the extent to which sustainability aspects are covered by ESRS will expand with the formulation of further disclosure requirements. Therefore, the need for entity-specific disclosures is likely to decrease over time, particularly if sector-specific standards are adopted in the future.

131. in determining its entity-specific disclosures, the company may take transitional measures in the first three annual sustainability statements in relation to the preparation of these disclosures, with a focus on the following:

132 If, in the first three years of the company's sustainability reporting under the ESRS, not all required information on its upstream and downstream value chain is available, the company shall explain the efforts made to obtain the required information on its upstream and downstream value chain, the reasons why this information could not be obtained, and the company's plans to obtain this information in the future.

133 To address the difficulties that companies may encounter in obtaining information from stakeholders throughout their value chain and to limit the burden on SMEs in the value chain, the following applies in the first three years of sustainability reporting under the ESRS:

134 Paragraphs 132 and 133 apply regardless of whether the relevant actor in the value chain is an SME.

135 From the fourth year of reporting under the ESRS, the company shall include information on the upstream and/or downstream value chain in accordance with paragraph 63. In this context, the information required under the ESRS to be obtained from SMEs in the company's upstream and/or downstream value chain does not go beyond the content of the future ESRS for listed SMEs.

136 In order to facilitate the first-time application of this standard, the company is not required to provide the comparative information required under section 7.1 Presentation of comparative information in the first year of preparing the sustainability statement under the ESRS. For the disclosure requirements listed in Installation C List of phased-in disclosure requirements , this transitional provision applies in relation to the first year of mandatory application of the phased-in disclosure requirement.

137 Installation C List of ph ased-in disclosure requirements of this standard contains provisions for phased-in disclosure requirements or data points of the disclosure requirements in ESRS that may be omitted or are not applicable in the first year(s) of preparation of the sustainability statement under ESRS.

(1) Directive 2013/34/EU of the European Parliament and of the Council of June 26, 2013 on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, amending Directive 2006/43/EC of the European Parliament and of the Council and repealing Council Directives 78/660/EEC and 83/349/EEC (OJ L 182, 29.6.2013, p. 19).

(2) Directive (EU) 2022/2464 of the European Parliament and of the Council of 14 December 2022 amending Regulation (EU) No 537/2014 and Directives 2004/109/EC, 2006/43/EC and 2013/34/EU as regards corporate sustainability reporting (OJ L 322, 16.12.2022, p. 15).

(3) 16th United Nations Guiding Principle and related Commentary, United Nations Interpretative Guidance, Questions 21 and 25, and OECD Guidelines Chapter II on General Policy (Section A.10) and Chapter IV on Human Rights (Section 4 and paragraph 44 of the Commentary) and OECD Due Diligence Guidance, Section II (1.1 and 1.2) and Questions 14 and 15 in the Annex.

(4) 18th United Nations Guiding Principle and related Commentary, 20th United Nations Guiding Principle, Commentary to the 21st and 29th United Nations Guiding Principles and 31st United Nations Guiding Principle (h) and related Commentary, United Nations Interpretative Guidance, Questions 30, 33, 42 and 76, and OECD Guidelines Chapter II on General Policy (Section A.14 and paragraph 25 of the Commentary) and OECD Due Diligence Guidance, Section II (2.1.c, 2.3, 2.4.a, 3.1.b and 3.1.f) and questions 8-11 in the Annex.

(5) United Nations 17th, 18th and 24th Guiding Principles and related commentaries and commentary to the United Nations 29th Guiding Principle, the United Nations Interpretative Guide, questions 9, 12, 13, 27, 28, 36-42 and 85-89, and OECD Guidelines Chapter II on General Policy (sections A.10 and A.11 and paragraph 14 of the Commentary) and Chapter IV on Human Rights (Sections 1 and 2 and paragraphs 41-43 of the Commentary) and OECD Due Diligence Guidance, Section II (2.1-2.4) and questions 3-5 and 19-31 in the Annex).

(6) 19th, 22nd and 23rd United Nations Guiding Principles and related Commentaries and the United Nations Interpretative Guidance, questions 11, 32, 46, 47, 64-68, 82 and 83, and OECD Guidelines Chapter II on General Policy (Section A.12 and paragraphs 18-22 of the Commentary) and Chapter IV on Human Rights (Section 3 and paragraphs 42 and 43 of the Commentary), and OECD Due Diligence Guidance, Section II (3.1 and 3.2), and questions 32-40 in the Annex.

(7) 20th United Nations Guiding Principle and 31st United Nations Guiding Principle (g) and related United Nations Commentaries and Interpretative Guidance, questions 49-53 and 80, and OECD Due Diligence Guidance, Section II (4.1 and 5.1), and questions 41-47 in the Annex.

(8) Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment and amending Regulation (EU) 2019/2088 (OJ L 198, 22.6.2020, p. 13).

(9) Directive 2007/36/EC of the European Parliament and of the Council of 11 July 2007 on the exercise of certain rights of shareholders in listed companies (OJ L 184, 14.7.2007, p. 17).

(10) Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market and repealing Directive 2003/71/EC (OJ L 168, 30.6.2017, p. 12).

(11) Regulation (EU) No 575/2013 of the European Parliament and of the Council of June 26, 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (OJ L 176, 27.6.2013, p. 1).

(12) Regulation (EC) No 1221/2009 of the European Parliament and of the Council of 25 November 2009 on the voluntary participation by organizations in a Community eco-management and audit scheme (EMAS), repealing Regulation (EC) No 761/2001 and Commission Decisions 2001/681/EC and 2006/193/EC (OJ L 342, 22.12.2009, p. 1).