EFRAG IG 3: Overview of ESRS Data Points

The EFRAG IG 3 List of ESRS Data Points (DPs) is an essential tool designed to aid organizations in complying with the European Sustainability Reporting Standards (ESRS). This detailed guidance helps companies identify and manage the extensive data requirements necessary for transparent and comprehensive sustainability reporting.

Overview of ESRS Data Points

The ESRS Data Points provided in EFRAG IG 3 are meticulously categorized into several sections, each corresponding to specific ESRS requirements. These sections cover a wide range of sustainability topics, ensuring that organizations can address all necessary aspects of their sustainability performance.

The categories include:

• Mandatory Disclosures: These data points must be disclosed by all organizations, regardless of the materiality assessment outcomes. They form the core requirements that provide a baseline of transparency and consistency across all reports.

• Environmental Data Points: These cover topics such as climate change mitigation, pollution prevention, water and marine resources management, biodiversity and ecosystems protection, and the promotion of a circular economy. Each environmental data point is designed to capture specific impacts and performance metrics, ensuring comprehensive environmental reporting.

• Social Data Points: These include information on labor practices, diversity and inclusion, human rights within the value chain, community impacts, and consumer protection. These data points help organizations report on their social responsibilities and the broader societal impacts of their operations.

• Governance Data Points: Governance data points focus on the organizational structures, policies, and practices that ensure ethical behavior and compliance with legal and regulatory requirements. They include disclosures related to board composition, governance structures, anti-corruption measures, and ethical conduct policies.

Each section of ESRS data points is tailored to capture detailed and specific information, ensuring that organizations can provide a holistic view of their sustainability performance. The structured approach helps in identifying and managing impacts, risks, and opportunities across various dimensions of sustainability, facilitating comprehensive and transparent reporting.

Key Components of EFRAG IG 3

The EFRAG IG 3 is structured to provide a comprehensive list of data points, along with instructions and guidelines on how to interpret and implement these requirements.

1. General Instructions

The general instructions provide a framework for understanding how to use the data points list effectively:

• Mandatory Disclosures: Data points that must be disclosed regardless of the materiality assessment.

• Employee Thresholds: Organizations with fewer than 750 employees may omit certain data points, as outlined in the instructions.

• Phased Implementation: Certain data points are subject to phased implementation, allowing organizations to gradually comply with the full requirements.

2. Detailed Data Points for ESRS 2

The sheet for ESRS 2 includes several key columns to help organizations navigate the data requirements:

• ID: A unique identifier for each data point.

• ESRS: The specific ESRS document the data point relates to.

• DR (Disclosure Requirement): The disclosure requirement that mandates the data point.

• Paragraph: The specific paragraph in the ESRS document that details the requirement.

• Related AR (Application Requirement): Additional application requirements related to the data point.

• Name: The name of the data point.

• Data Type: The type of data required (e.g., narrative, semi-narrative).

• Conditional or Alternative DP: Whether the data point is conditional or has alternatives.

• Additional Notes: Any additional notes or references to other documents.

Example Data Points from ESRS 2:

• BP-1_01: Basis for preparation of sustainability statement (semi-narrative)

• BP-1_02: Scope of consolidation of consolidated sustainability statement (narrative)

• BP-1_03: Indication of subsidiary undertakings included in the sustainability statement (narrative)

3. Environmental (ESRS E1 - E5)

Each environmental section (E1 to E5) includes data points specific to environmental impacts and initiatives. These sections cover:

• Climate Change Mitigation (E1): Data points related to greenhouse gas emissions, energy consumption, and climate change strategies.

• Pollution Prevention (E2): Data points on pollutants released, waste management, and pollution prevention measures.

• Water and Marine Resources (E3): Data points on water usage, marine resource management, and related environmental impacts.

• Biodiversity and Ecosystems (E4): Data points on biodiversity conservation, ecosystem management, and impacts on natural habitats.

• Circular Economy (E5): Data points related to recycling, waste reduction, and circular economy practices.

Example Data Points from ESRS E1:

• E1-1_01: Total greenhouse gas emissions (quantitative)

• E1-1_02: Energy consumption by source (quantitative)

• E1-1_03: Description of climate change strategy (narrative)

4. Social (ESRS S1 - S4)

The social sections cover data points related to social impacts, including labor practices, community engagement, and human rights.

• Own Workforce (S1): Data points on employment practices, diversity, and labor conditions.

• Workers in the Value Chain (S2): Data points on labor conditions and human rights in the supply chain.

• Affected Communities (S3): Data points on community engagement, impact assessments, and social investment.

• Consumers and End-users (S4): Data points on product safety, customer satisfaction, and consumer rights.

Example Data Points from ESRS S1:

• S1-1_01: Total number of employees (quantitative)

• S1-1_02: Gender diversity in the workforce (quantitative)

• S1-1_03: Description of labor practices and policies (narrative)

5. Governance (ESRS G1)

The governance section includes data points related to governance structures, policies, and practices.

• G1-1_01: Description of governance structure (narrative)

• G1-1_02: Board diversity statistics (quantitative)

• G1-1_03: Policies on ethical conduct and anti-corruption (narrative)

Transitional Provisions

The IG 3 guidance provides a robust framework to help organizations transition into full compliance with ESRS data points. Recognizing that achieving full compliance immediately may be challenging for many organizations, EFRAG has outlined a phased approach to implementation. This phased approach allows organizations to gradually meet the extensive data requirements over a specified period, ensuring a smoother transition while maintaining the integrity of sustainability reporting.

Phased Implementation Schedules:

• Initial Phase: During the initial phase, organizations are encouraged to begin reporting on the most critical data points that are readily available. This phase focuses on establishing the fundamental aspects of sustainability reporting, such as mandatory disclosures and key environmental, social, and governance data points.

• Intermediate Phase: In the intermediate phase, organizations expand their reporting to include additional data points that require more extensive data collection efforts. This phase may involve developing new data collection processes, enhancing existing ones, and engaging with upstream and downstream value chain actors to gather necessary information.

• Full Implementation Phase: By the final phase, organizations should aim to achieve full compliance with all ESRS data points. This phase ensures that all relevant data points are reported, providing a comprehensive view of the organization's sustainability performance.

Use of Estimates and Proxies

To support organizations during the transition, the IG 3 guidance allows for the use of estimates and proxies when direct data is unavailable. This approach acknowledges that obtaining precise data for all data points may not be immediately feasible.

Key aspects include:

• Estimates: Organizations can use reasonable and supportable estimates based on available information. These estimates should be transparent and justifiable, providing stakeholders with an understanding of the basis for the reported data.

• Proxies: When direct data collection is not possible, organizations may use proxies. Proxies are alternative data points or indicators that can reasonably approximate the required information. For instance, industry averages, regional data, or other relevant benchmarks can serve as proxies to fulfill reporting requirements.

Continuous Improvement

The transitional provisions emphasize the importance of continuous improvement in data collection and reporting processes. Organizations are encouraged to enhance their data accuracy and completeness over time, moving from estimates and proxies towards direct data collection. This iterative process ensures that sustainability reporting becomes more precise and reliable with each reporting cycle.

Practical Steps for Implementing ESRS Data Points

Implementing the ESRS Data Points as outlined in EFRAG IG 3 requires a structured approach to ensure compliance and enhance the quality of sustainability reporting.

Here are the detailed steps:

Step 1: Understanding the Requirements

Organizations should begin by thoroughly reviewing the general instructions and the specific data points relevant to their operations.

This involves several key activities:

• Review General Instructions: Start with a detailed review of the general instructions provided in IG 3. These instructions offer an overview of the mandatory disclosures and specific guidelines on how to approach the data collection and reporting process.

• Identify Relevant Data Points: Go through the list of data points and identify those that are applicable to your organization based on your industry, operational activities, and value chain. Pay special attention to mandatory disclosures that must be reported regardless of materiality assessments.

• Understand Disclosure Requirements: For each identified data point, understand the specific disclosure requirements, including the type of data needed (narrative, quantitative, or semi-narrative), the level of detail required, and any conditional or alternative data points.

Step 2: Data Collection and Management

Establishing robust data collection processes is crucial for gathering the required information accurately and efficiently.

This step includes:

• Develop Data Collection Framework: Create a comprehensive data collection framework that outlines the sources of data, methods of data collection, and responsible parties. This framework should cover all relevant departments, such as environmental management, human resources, and finance.

• Engage with Stakeholders: Engage with various internal and external stakeholders, including suppliers, customers, and other value chain partners, to gather necessary data. Effective communication and collaboration with these stakeholders are essential for obtaining accurate and complete data.

• Implement Data Management Systems: Use data management systems and tools to collect, store, and manage the data. These systems should support data integrity, accuracy, and ease of access. Consider using software solutions that can handle large datasets and integrate with existing reporting systems.

• Training and Capacity Building: Train staff involved in data collection and reporting on the requirements of ESRS and the specific data points. Capacity building ensures that all team members understand their roles and responsibilities in the data collection process.

• Regular Data Audits: Conduct regular audits and reviews of the collected data to ensure its accuracy and completeness. This includes cross-checking data from different sources and verifying the consistency of information.

Step 3: Reporting and Disclosures

Once the data is collected and managed, the next step is to accurately report this information in your sustainability statements.

This involves:

• Prepare Comprehensive Reports: Compile the collected data into comprehensive sustainability reports. Ensure that all mandatory disclosures are included and that the reports provide a balanced view of the organization's sustainability performance.

• Provide Detailed Narratives: Alongside quantitative data, provide detailed narratives that explain the context, significance, and implications of the data. This helps stakeholders understand the broader impact of the reported information.

• Use of Estimates and Proxies: Where direct data collection is not feasible, clearly explain the use of estimates and proxies. Detail the methodologies used to derive these estimates and the rationale behind their use. Transparency in the use of proxies ensures that stakeholders have confidence in the reported data.

• Ensure Compliance with ESRS: Verify that all reported data complies with ESRS requirements. This includes cross-referencing the reported data with the specific requirements outlined in IG 3 and ensuring that all necessary disclosures are made.

• Continuous Improvement: Finally, adopt a continuous improvement approach to your reporting process. Use feedback from stakeholders and insights from the reporting process to refine data collection methods and enhance the quality of future reports.

By following these practical steps, organizations can effectively implement the ESRS Data Points and ensure comprehensive and transparent sustainability reporting. This structured approach not only helps in achieving compliance with ESRS standards but also enhances the credibility and reliability of sustainability statements.

The Importance of Implementing EFRAG IG 3 List of ESRS Data Points

Implementing the EFRAG IG 3 List of ESRS Data Points is crucial for comprehensive and transparent sustainability reporting. By providing detailed guidance on the extensive data requirements, EFRAG ensures that organizations can produce sustainability statements that reflect their full range of impacts, risks, and opportunities. This approach promotes accountability and helps stakeholders understand the broader implications of business activities.

You can find EFRAG's IG 3 List of ESRS Data Points Implementation Guidance here.

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