ESG, Reporting, and European Standards: The Time for ESRS Has Arrived

ESG, Reporting, and European Standards: The Time for ESRS Has Arrived

May 07, 2026

In July 2023, the European Union officially published the first ESRS (European Sustainability Reporting Standards), defining a new regulatory framework for ESG reporting that will progressively apply to all businesses, including SMEs and startups.

The transition is crucial: from voluntary communication often tainted by so-called “greenwashing”, we move to a regulated, comparable, and traceable system. ESG reports will no longer be mere marketing or public relations tools, but an integral part of financial reporting and long-term corporate strategy.

What are the ESRS?

The ESRS are a set of standards developed by EFRAG (the technical advisory group of the European Commission) and form the operational pillar of the CSRD (Corporate Sustainability Reporting Directive).

They establish specific reporting requirements for companies on environmental (E), social (S), and governance (G) matters, structured into 12 standards split between cross-cutting and topical requirements.

Concrete Examples:

  • ESRS E1 (Climate Change): mandates declaring Scope 1, 2, and 3 emissions, the climate transition plan, and climate-related financial metrics.
  • ESRS E4 (Biodiversity): requires reporting on impacts on ecosystems, soil, land use, and protected species.
  • ESRS S3/S4: require mapping vulnerable stakeholders and the overall value chain (value chain).
  • ESRS 1 (General Requirements): introduces the concept of “double materiality” and the obligation to transparently explain why certain information is included or excluded.

Whom do the ESRS standards apply to?

In 2024, the ESRS are already mandatory for large European public-interest entities, but they will be progressively extended according to this timeline:

  • All large non-listed companies (meeting at least two of the following criteria: 250 employees, €40M turnover, €20M balance sheet total).
  • Listed SMEs, starting from 2026.
  • Other companies on a voluntary basis, including innovative startups wishing to prepare in advance or attract qualified investments.

Why is this relevant for startups and impact-driven projects?

Even companies not yet legally obligated can benefit greatly from integrating the ESRS standards to:

  • Build from day one a serious, scalable, and traceable impact operational model.
  • Successfully secure grants, public funding, and venture capital (VC, business angels), as investors increasingly require ESG data as a prerequisite.
  • Stand out in a competitive market, where the transparency and credibility of ESG metrics translate into a real competitive advantage.

ESG reporting is no longer just a narrative option or a choice: it is a European standard of accountability. Those working in climate, circular economy, or territorial regeneration have every interest in understanding and adopting it starting today.

Sources and Further Reading

#ESG #ESRS #CSRD #Sustainability #GreenTech #Accountability