{"id":3514079,"date":"2025-08-13T10:28:22","date_gmt":"2025-08-13T09:28:22","guid":{"rendered":"https:\/\/www.globalfactor.com\/?p=3514079"},"modified":"2025-08-13T10:28:22","modified_gmt":"2025-08-13T09:28:22","slug":"esrs-e1-how-climate-reporting-changes-in-efrags-new-drafts","status":"publish","type":"post","link":"https:\/\/www.globalfactor.com\/en\/esrs-e1-how-climate-reporting-changes-in-efrags-new-drafts\/","title":{"rendered":"ESRS E1: How Climate Reporting Changes in EFRAG\u2019s New Drafts"},"content":{"rendered":"

The ESRS E1 \u2013 Climate Change standard is one of the pillars of reporting under the CSRD and a central element of the European Green Deal. With the revision published by EFRAG in July 2025, this standard has been simplified by reducing the reporting burden, while strengthening its ambition and alignment with other international frameworks.<\/p>\n

This represents a maturing of the regulatory framework, prioritizing quality over quantity and focusing on disclosures that truly allow an assessment of a company\u2019s climate alignment. The non-essential is streamlined, and the essential is reinforced.<\/p>\n

\"\"<\/p>\n

Why was this revision necessary?<\/b><\/p>\n

The E1 standard (climate change) is the most material and cross-cutting of all ESRS. EFRAG received over 800 responses during the analysis and consultation phases, many of them pointing to the complexity and overlaps of this standard. The review aimed to maintain climate ambition but with a clearer, more efficient, and more applicable approach. Ambiguity has been reduced, methodologies clarified, and common minimum criteria established.<\/p>\n

Some of the criticisms of the original standard from many stakeholders, including investors, were that climate plans were too vague or difficult to assess.<\/p>\n

The standard still contains 11 Disclosure Requirements (E1.1\u2013E1.11), but the number of mandatory datapoints has increased from 64 to 81. This is due to greater legal and methodological clarity, which results in more granularity in disclosure. However, information must only be reported if the topic or subtopic is material.<\/p>\n

In order to provide clarity for both reporting entities and assurance providers, many disclosures previously marked as \u201cif applicable\u201d or \u201cwhere relevant\u201d have been removed\u2014some of them becoming mandatory.<\/p>\n

Key changes in ESRS E1<\/b><\/p>\n

1. Explicit alignment with the 1.5 \u00b0C target<\/b><\/p>\n

    \n
  • The plan must be aligned with decarbonization pathways compatible with 1.5 \u00b0C.<\/li>\n
  • If not, the reasons and implications must be clearly explained.<\/li>\n
  • The use of recognized sectoral pathways is encouraged (e.g., IEA, SBTi sectoral pathways).<\/li>\n<\/ul>\n

    2. More rigorous timeframes
    \n<\/b>
    \n<\/b>The plan must include:<\/span><\/p>\n

      \n
    • Absolute GHG emissions reduction targets aligned with the Paris Agreement and the 1.5 \u00b0C temperature limit.<\/span><\/li>\n
    • A recent baseline year (maximum 3 years prior to the reporting year) for new targets and a minimum outlook to 2030.<\/span><\/li>\n<\/ul>\n

      3. Financing and governance<\/b><\/p>\n

      The plan must explain:<\/p>\n

        \n
      • Estimated and allocated financial resources to achieve climate goals (CapEx and OpEx for short-, medium-, and long-term periods).<\/li>\n
      • Critical dependencies (technology, market, regulation, renewable energy access).<\/li>\n
      • The role of leadership and how climate transition is integrated into corporate strategy.<\/li>\n<\/ul>\n

        4. Climate risks<\/b><\/p>\n

        Climate scenario analysis (explicit requirement to use at least one pathway aligned with 1.5 \u00b0C) and disclosure of how scenarios impact revenues, operating costs, assets, liabilities, and the value chain.<\/p>\n

        Disclosure of current and future financial effects of physical and transition risks (mitigation\/adaptation costs, changes in CapEx and OpEx, stranded assets), with key KPIs aligned with IFRS S2.<\/p>\n

        5. Alignment with international standards<\/b><\/p>\n

        The new E1 is more explicitly aligned with international standards, particularly IFRS S2 (ISSB): financial focus, scenarios, targets, and governance.<\/p>\n

        This aims to make European reports internationally recognizable and comparable, avoiding duplication for multinational groups and facilitating access to sustainable finance.<\/p>\n

        What does this mean for companies?<\/b><\/p>\n

        The standard remains ambitious, but it is now simpler, more flexible, and more proportionate.<\/p>\n

        Climate transition plans must be strengthened so they stop being just a narrative and become an auditable strategic tool.<\/p>\n

        There is less room for greenwashing, as greater clarity and specificity leave less space to omit relevant information.<\/p>\n

        Companies without a climate strategy will have to reflect this clearly in their reports\u2014leaving them exposed to scrutiny from investors, media, or regulators.<\/p>\n

        Participate in the consultation: <\/b>The public consultation is open until 29 September 2025. This is a key opportunity to influence the final version of the standard. Access the full draft here: Amended ESRS | EFRAG<\/span><\/p>\n

        \ud83e\udd1d Need support adapting to changes in climate-related reporting?<\/b><\/p>\n

        At Global Factor, we specialize in guiding companies through the evolution of climate reporting under the ESRS E1 \u2013 Climate Change standard.<\/p>\n

        From aligning your reports with the latest GHG Protocol requirements to prioritizing material climate metrics, we provide tailored support to ensure your sustainability report is accurate, compliant, and strategic.<\/p>\n

        \ud83d\udc49 Contact us today and let us help you turn climate challenges into business opportunities.<\/p>\n<\/div><\/div><\/div><\/div><\/div>\n","protected":false},"excerpt":{"rendered":"","protected":false},"author":1,"featured_media":3514071,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","inline_featured_image":false,"footnotes":""},"categories":[73],"tags":[],"class_list":["post-3514079","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-key-topics"],"yoast_head":"\nESRS E1: How Climate Reporting Changes in EFRAG\u2019s New Drafts - Global Factor<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.globalfactor.com\/en\/esrs-e1-how-climate-reporting-changes-in-efrags-new-drafts\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"ESRS E1: How Climate Reporting Changes in EFRAG\u2019s New Drafts - 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