Skip to main content

S1-5 - Targets related to Impacts, Risks and Opportunities

Updated over 5 months ago

ESRS Standard

44. the entity shall disclose the time-bound and outcome-oriented Targets it may have set in relation to the following:

  • (a) Reducing negative impacts on the entity's workforce; and/or

  • b) Promoting positive impacts on the organization's workforce; and/or

  • c) Managing Material risks and opportunities related to the organization's workforce.

45. the objective of this disclosure requirement is to provide an understanding of the extent to which the company uses results-oriented Targets to drive and measure its progress in addressing its material negative impacts and/or in driving positive impacts on the company's workforce and/or in managing material risks and opportunities related to the company's workforce.

46 The summary description of the Targets for managing the organization' s Material Impacts, Risks and Opportunities for the organization' s workforce includes the information requirements set out in ESRS 2 MDR-T.

See also application requirement AR 50

47 The company discloses the process for setting Targets, including information on whether and how the company has engaged directly with the company's workforce or Workers' representatives in the following areas:

  • (a) Establishing these Targets,

  • (b) tracking the company's performance in relation to the achievement of those Targets; and

  • c) identifying lessons learned or opportunities for improvement arising from the company's performance.

Application Requirements (AR)

AR 49. when disclosing information about Targets in accordance with paragraph 44, the entity may disclose the following:

  • (a) The intended outcomes to be achieved in the lives of a specified number of individuals in the entity's workforce.

  • b) The long-term stability of Targets in terms of definitions and methods to enable comparability over time.

  • c) The standards or commitments on which the Targets are based (e.g. codes of conduct, procurement policies, global frameworks or industry codes).

AR 50 Targets related to Risks and Opportunities may be the same as or different from Targets related to Impacts. For example, an objective to achieve Adequate wages for Non-employees could reduce both Impacts on these individuals and the associated business Risks related to the quality and reliability of their production.

AR 51 The entity may also distinguish between short-, medium- and long-term Targets for the same commitment made under the Policy. For example, the company may have a long-term target to reduce health and safety Incidents affecting its delivery staff by 80% by 2030 and a short-term target to reduce delivery staff Overtime by x% by 2024 while maintaining their income.

AR 52 When amending or replacing a Targets during the reporting period, the entity may clarify this by cross-referencing to significant changes in the business model or broader changes in the accepted standard or regulatory framework from which the Targets are derived to provide background information in accordance with ESRS 2 BP-2 Disclosures in the context of specific circumstances.

Examples from Installation A.4

Application requirements for ESRS S1-5 - Targets related to addressing material adverse impacts, promoting positive impacts and managing material risks and opportunities

This Installation is an integral part of the ESRS S1 Workforce of the company and has the same binding force as the other parts of this standard. It supports the application of the ESRS S1-5 disclosure requirements on social and human rights issues with examples of disclosures:

Social and human rights issues

  • Safe employment
    Increase in the proportion of workers with employment contracts (especially permanent contracts) and social protection

  • Working hours
    Increase the proportion of workers with flexible working time arrangements

  • Adequate wages
    Ensure that all own employees receive an adequate wage

  • Social dialogue/existence of works councils/workers' rights to information, consultation and co-determination
    Expansion of social dialogue to other companies and/or countries

  • Freedom of association/Collective bargaining including the proportion of workers covered by collective agreements
    Increase in the proportion of the company's workforce covered by collective agreements, negotiation of collective agreements taking into account sustainability aspects

  • Work-life balance
    Extend Work-life balance actions to a larger proportion of the company's workforce

  • Health and safety
    Reducing the number of injuries and lost working time due to injuries

  • Gender equality and equal Wage for equal work
    Increasing the proportion of women in the company's workforce and in management positions, reducing the pay gap between women and men

  • Further training and skills development
    Increase the proportion of employees receiving training and regularly review skills development

  • Employment and inclusion of Persons with disabilities
    Increasing the proportion of Persons with disabilities in the company's workforce

  • Actions against violence and Harassment in the workplace
    Extending Actions to all workplaces

  • Diversity
    Increase the proportion of underrepresented groups in the company's workforce and top management

  • Child labour
    Expand actions to prevent young people from being exposed to hazardous work to a higher percentage of jobs

  • Forced labour
    Extending actions to prevent Forced labour to a higher percentage of activities

Examples from previous practice

Examples serve only as an indication of how a disclosure requirement has been reported by other companies to date. Audited ESRS reports are not yet available. There is no guarantee of accuracy and completeness.

S1-5 - Targets Employee:s

Respectful treatment and Equal treatment within the company

As a global company, we are committed to creating a supportive working environment based on the promotion of human rights, diversity and the well-being of our employees. We raise awareness of Discrimination and Equal treatment through awareness training. In the reporting year, 75% of employees completed such training. Our aim is to increase this proportion to 85% in the coming reporting year. At the same time, we promote a balanced representation of women in positions of responsibility and have set ourselves the target of increasing the proportion of women in management positions from 20% to 30% by 2026.

This article has been machine translated. In case of errors, please contact [email protected].

Related Articles
ESRS S1 - Targets
S1-4 - Actions taken to address material impacts and approaches to managing material risks and exploiting material opportunities
S1.SBM-3 - Material impacts, risks and opportunities and their interaction with strategy and business model
S2.SBM-3 - Impacts, Risks and Opportunities and their Interaction with Strategy and Business Model
S2-5 - Targets related to addressing significant negative impacts, enhancing positive impacts and managing material risks and opportunities
Did this answer your question?