Positive Impacts (Positive Impacts) according to ESRS

The revised drafts of the European Sustainability Reporting Standards (ESRS), published in July 2025, provide the first binding definition of what constitutes a positive impact. This puts an end to the previous gray area in which many companies relied on their own interpretations.

Key points of the new ESRS definition (ESRS 1, §36)

1. Positive impacts should be assessed on their own merits, not as a deduction from negative effects.
2. No offsetting: Negative effects may not be offset against positive effects.
3. Measures taken to comply with laws or to mitigate one’s own negative impacts are not considered a positive impact.
4. Positive effects arise when a company prevents or reduces the negative impacts of third parties caused by its products, services, or business models.

Quality requirements

The assessment must take into account decision-making utility and relevance (QC1 & QC2, ESRS 1 Annex B)—that is, it must provide value to stakeholders and the financial markets, not merely document internal compliance.

Examples

No longer valid (apparent positive effects):

• A strong safety culture ➜ is considered to mitigate one's own risk; no impact.
• Payment of fair wages ➜ mere compliance.
• Employee training programs ➜ Mandatory, no external impact.
• Anti-corruption programs ➜ Preventing internal risks.
• Transparent tax reporting ➜ regulatory requirement.
  

Still valid (genuine positive impacts):

• Contributions to the green transition (e.g., decarbonization technologies).
• Disaster and emergency relief that protects communities.
• Innovations to reduce chronic diseases.

Implications for corporate non-financial reporting

• Many of the “positive impacts” reported to date will no longer be recognized in future reporting cycles.
• Starting in FY2027 (according to the Delegated Act), the new definition will become mandatory, but companies should already be reviewing their materiality analysis (DWA).
• The goal is to focus on substantive, measurable contributions —not on compliance or PR effects.

This new clarity thus helps prevent greenwashing, improves comparability, and compels companies to identify genuine social or environmental value contributions. For investors and rating agencies, this increases the relevance and reliability of the reported “positive impacts.”