In our ongoing series exploring the European Sustainability Reporting Standards (ESRS), today we turn our attention to ESRS E2, which deals with the topic of environmental pollution. This standard is part of a broader initiative to increase the transparency and accountability of companies in relation to their environmental impacts and is managed by the European Financial Reporting Advisory Group (EFRAG) under the Corporate Sustainability Reporting Directive (CSRD).

What is ESRS E2?

The ESRS E2 focuses on the disclosure of information on air, water and soil pollution and on the handling of substances of very high concern. Companies must not only document their direct and indirect impacts on the environment, but also the measures they take to minimize these impacts. This includes both preventive approaches and measures to minimize and remedy damage. The various disclosure requirements of ESRS E2 are listed in the table below to provide an overview.

‍Importantaspects of the ESRS E2

• Policies and procedures: Companies are required to set out their procedures for identifying, assessing and managing pollution risks.
• Measures and resources: ESRS E2 requires companies to describe the specific measures they take to combat pollution, including the resources they make available for this purpose.
• Targets: Companies must disclose their specific pollution reduction targets and how these targets are to be achieved.
• Direct and indirect impacts: The standard requires detailed reporting on a company's direct and indirect environmental impacts, including impacts on biodiversity and the local ecosystem.

Synergies with other ESRS topics

ESRS E2 overlaps with several other standards under the ESRS, which illustrates the complexity of sustainability reporting:

• Climate change (ESRS E1): Covers specifically seven greenhouse gases, while ESRS E2 covers more general air pollution.‍
• Water and marine resources (ESRS E3): Water pollution, including pollution from microplastics, is covered under ESRS E2.‍
• Biodiversity and ecosystems (ESRS E4): The direct impacts of pollution on biodiversity loss are part of the reporting under ESRS E2.‍
• Circular economy and resource use (ESRS E5): Deals with pollution from waste that is already covered by ESRS E2.‍
• Social aspects (ESRS S3): Addresses the impacts of pollution on communities, particularly negative social impacts.

Concluding thoughts

The ESRS E2 is an essential pillar in comprehensive environmental reporting, encouraging companies to evaluate and disclose both the negative and positive impacts of their business activities on the environment. By reporting transparently on their environmental impact, companies are making a vital contribution to the global effort to tackle the environmental challenges of our time.

In our next posts, we will explore more ESRS standards and highlight how organizations can not only meet regulatory requirements but also increase their long-term value by implementing these guidelines. Stay tuned for ongoing in-depth insights and practical guides.