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European Sustainability Reporting Standards (ESRS)

The first set of 12 ESRS issued by the European Financial Reporting Advisory Group (EFRAG) were adopted as final standards by the European Commission in June 2023 and with no objection from the European Parliament and European Council in October 2023.

ESRS now forms the basis for businesses’ sustainability reporting in accordance with the Corporate Sustainability Reporting Directive (CSRD).

Who's impacted?

The companies* that will be required to apply ESRS under the European Union (EU)’s CSRD are:

  • All companies with securities listed on an EU-regulated market
  • “Large” EU companies that are not listed, with “large” defined as exceeding two of the three following metrics for two consecutive balance sheet dates:
    • Total assets of €25 million
    • Net turnover (revenue) of €50 million
    • Average of 250 employees
  • EU companies of a “Large group” and not listed, with “Large group” defined the same as above, but for the consolidated group

* The criteria listed here are guidelines only and should not be considered a substitute to professional/legal advice

What's the latest?

EFRAG is currently developing additional sector-specific sustainability standards which are expected to be issued in the coming years.

What do Canadian CPAs need to know?

While the CSRD and therefore the ESRS do not directly apply to Canadian companies, Canadian companies with EU operations that meet the size requirements may be required to report sustainability information for their EU subsidiary(ies); or if on a consolidated basis the criteria for a large group is met, consolidated sustainability reporting would be required, inclusive of non-EU operations.

The extra-territorial impacts of the CSRD should not be understated and Canadian CPAs should be aware of the potential reporting requirements which could extend beyond EU subsidiaries.

Where can I learn more?

For more information, please refer to our At a Glance: Sustainability Reporting Standards and Regulations and related FAQs.

You can also refer to: