ESRS FAQs include GHG Emissions clarification

EFRAG has published a summary of Q&As related to the ESRS standards used for CSRD reporting, which is a great resource for any company who is preparing their ESRS disclosure for 2024.

The ESRS Q&A platform now contains the first set of 12 Explanations, including clarifications for companies that need to disclose GHG emissions for several subsidiaries within the same group - see page 19, which deals with the question "Should all the subsidiaries and the parent company in a consolidated sustainability statement use the same criteria and methodology for GHG emissions?" The full answer can be read in the summary document, but the key points from EFRAG's response were that:

  • All subsidiaries and their parent company must adhere to ESRS requirements, including qualitative characteristics outlined in ESRS 1 Appendix B.
  • GHG Protocol serves as the reference for calculating GHG emissions under ESRS E1.
  • Sustainability statements should clearly outline the methodology and significant assumptions about GHG emissions as per ESRS E1 paragraph AR 39.
  • ESRS allows flexibility in methodologies within the same group, but adherence to qualitative characteristics is essential. Yet, a standardised approach is recommended.
  • Deviations from a common methodology are acceptable but must be disclosed with rationale to meet ESRS transparency requirements.
  • Using different methodologies for similar situations may lead to non-compliance with ESRS qualitative characteristics (ESRS 1, Appendix B).

In conclusion, while ESRS encourages flexibility in methodologies within corporate groups, a standardised approach remains advantageous for maintaining consistency, comparability, and overall transparency in reporting GHG emissions.

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GRI-ISSB interoperability guidance

The ISSB and GRI have also published  a new analysis and mapping resource: GRI-ISSB interoperability guidance for GHG emissions reporting. While this document is not a comprehensive assessment of all requirements, it illustrates the areas of interoperability a company should consider when measuring and disclosing Scope 1, 2, and 3 greenhouse gas (GHG) emissions in accordance with both GRI 305: Emissions and IFRS S2 Climate-related Disclosures. The requirements in GRI 305 and IFRS S2 demonstrate a high degree of alignment, which means companies that already disclose Scope 1, 2 and 3 GHG emissions using the GRI Standards will be well positioned to report information about GHG emissions in accordance with IFRS S2.

Published 8 February, 2024