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The ESRS explains: ESRS G1 - Company policy

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DATE

5.9.2024

AUTHORS

Luka Marie Sauer

Kevin Möller

TOPICS

Governance & regulation

In our blog series on the European Sustainability Reporting Standards (ESRS), today we are looking at ESRS G1, the standard for corporate governance. This standard defines how companies must report on their corporate governance practices, corporate culture, anti-corruption and bribery practices, supplier management, political influence and lobbying activities.

What is ESRS G1?

ESRS G1 was developed to improve transparency in corporate governance and ensure that companies disclose their commitments to ethical business conduct, integrity and responsibility. The standard covers three key areas:

‍Business ethicsand corporate culture: measures to prevent corruption, protect whistleblowers and promote a corporate culture of integrity.‍

Management of supplier relationships: Focus on fair payment practices and compliance with social and environmental standards in the supply chain.

Political influence and lobbying activities: Disclosure of financial contributions to political activities and their influence on corporate strategies.

By reporting in accordance with ESRS G1, companies can strengthen the confidence of investors, regulatory authorities and the public and at the same time optimize their internal governance processes.

Disclosure requirements in accordance with ESRS G1

Under ESRS G1, companies are obliged to report comprehensively on their corporate policy. An overview of the main disclosure requirements can be found here:

ESRS G1 Corporate policy Disclosure requirements

Duty of disclosure	Description
G1-1	Strategies relating to corporate policy and corporate culture.
G1-2	Management of relationships with suppliers.
G1-3	Prevention and detection of corruption and bribery.
G1-4	Confirmed cases of corruption or bribery.
G1-5	Political influence and lobbying activities.
G1-6	Payment practices, especially delays in SME payments.

Objective of ESRS G1

ESRS G1 is intended to ensure that companies make their corporate governance practices transparent. Recurring economic scandals in particular have highlighted the need for companies to improve and disclose their internal control mechanisms.

The main objectives of the standard are:

Promoting integrity and ethical behavior in companies
Ensuring fair business practices along the value chain
Transparent presentation of political influence
Combating corruption and bribery through better control mechanisms

Synergies with other ESRS standards:

ESRS G1 overlaps with other ESG standards, in particular:‍

‍ESRSS1 & S2: Corporate governance in relation to social responsibility and labor standards‍
ESRS E5: Responsibility in the supply chain and sustainable procurement‍
ESRS 2 (GOV-1 & IRO-1): General governance principles and risk management

Challenges during implementation

Implementing ESRS G1 can be challenging for companies as it requires comprehensive data on business ethics, payment practices and corruption prevention. SMEs in particular need to prepare to better document and disclose their internal policies and processes.

Another critical issue is political influence. Companies must provide detailed information on the financial resources used for lobbying, including the recipients and the main issues involved.

How does the new ESRS draft affect Topic Standard G1—Corporate Policy?

The recently published draft of Amended ESRS G1 (Exposure Draft July 2025) requires companies to report on their policies and measures in a clearer three-part structure: policies, measures, and targets. This will clarify, among other things, which governance principles apply (e.g., regarding the handling of corruption or bribery), how whistleblower systems are structured, what sanctions exist for violations, and how political lobbying is made transparent.

In addition, the number of mandatory data points under G1 has been reduced by approximately 50%, which represents a significant relief, particularly for companies with limited reporting resources. At the same time, the obligation to disclose confirmed cases of corruption or bribery remains in place—here, only the level of detail required in reporting has been clarified.

Companies included in the first reporting wave (“Wave 1”) will also benefit from transitional provisions under the Quick Fix, such as those regarding reporting requirements for the financial impact of governance risks. The final version is expected to take effect in 2026/2027.

Latest Updates – ESRS G1 Corporate Policy

As of July 2025 – Draft, Consultation & Exemptions for Wave 1

Exposure Draft G1 (July 31, 2025): New structure: Policy → Measures → Goals; clear subtopics such as corruption, whistleblowing, political influence, etc. [oai_citation:4‡iasplus.com](https://iasplus.com/api/v1/client/publications/95861/document?utm_source=chatgpt.com)
Reduced data points: approximately 50% fewer required fields compared to the original G1 standard. [oai_citation:5‡iasplus.com](https://iasplus.com/api/v1/client/publications/95861/document?utm_source=chatgpt.com)
Quick Fix Amendments: Relief regarding the financial impact of governance risks; certain requirements for Wave 1 companies are being relaxed. [oai_citation:6‡Finance](https://finance.ec.europa.eu/publications/commission-adopts-quick-fix-companies-already-conducting-corporate-sustainability-reporting_en?utm_source=chatgpt.com)
Consultation & Timeline: Drafts open for public comment through September 29, 2025; the final standard is expected to be issued for the 2026/2027 fiscal years. [oai_citation:7‡Germany - Grant Thornton](https://www.grantthornton.de/themen/2025/efrag-ueberarbeitet-esrs-set-1-das-muessen-unternehmen-jetzt-wissen/?utm_source=chatgpt.com)

Conclusion & Outlook: The Significance of ESRS G1

ESRS G1 is a key standard for sustainable corporate governance. It helps companies to protect themselves against reputational risks, strengthen investor confidence and improve their corporate governance processes. In upcoming articles, we will take a closer look at the practical implementation of ESRS G1 and present best practices for companies. Stay tuned for deeper insights into governance reporting and the challenges of sustainability reporting.

FAQs on ESRS G1 Corporate Governance & Audit Draft

What are the new structural elements in the G1 draft?

The final draft of G1 proposes a clearer three-part structure: Policy, Actions & Goals. This framework is intended to promote transparency, ensuring that not only the existence of a corporate policy is evident, but also how it is implemented and what measurable outcomes are sought. Subtopics such as corruption, bribery, whistleblowing, and political influence are incorporated into this framework. [oai_citation:8‡iasplus.com](https://iasplus.com/api/v1/client/publications/95861/document?utm_source=chatgpt.com)

Which data points were reduced, and what does that mean in practice?

The draft proposes a reduction of approximately 50% in the number of mandatory data points compared to the original G1 standard. In practice, this means that companies will be required to provide less narrative information, disclose fewer details where they are not material, and have greater flexibility in terms of presentation and scope. It is expected that fewer resources will be needed to collect marginal data. [oai_citation:9‡iasplus.com](https://iasplus.com/api/v1/client/publications/95861/document?utm_source=chatgpt.com)

What transitional rules apply to Wave 1 companies?

Companies reporting in the first reporting wave under CSRD/ESRS (Wave 1) are subject to special relief measures under the “Quick Fix”: certain obligations regarding the financial impacts of governance risks are deferred; transitional provisions apply in some cases for 2025 and 2026. Those participating in Wave 1 should clearly indicate in their reports which relief measures are being utilized. [oai_citation:10‡Finance](https://finance.ec.europa.eu/publications/commission-adopts-quick-fix-companies-already-conducting-corporate-sustainability-reporting_en?utm_source=chatgpt.com)

Does G1 still have to disclose every confirmed case of corruption?

Yes. Confirmed cases of corruption or bribery must also be disclosed in the new draft, including the nature of the incident and the number of cases. However, the level of detail required in the reporting has been clarified—specifically, whether measures were taken and how management is addressing the issue. [oai_citation:11‡EFRAG](https://www.efrag.org/sites/default/files/media/document/2025-07/FINAL%20FAQ%20EFRAG.pdf?utm_source=chatgpt.com)

When is the final ESRS G1 expected to take effect?

The draft was published in July 2025, and the consultation period ends on September 29, 2025. The final standard is expected to take effect in the 2026 or 2027 fiscal year, depending on the legislative and implementation timelines at the EU and national levels. Companies should begin reporting according to the proposed structure now to minimize compliance costs. [oai_citation:12‡EY](https://www.ey.com/content/dam/ey-unified-site/ey-com/en-gl/technical/ifrs-technical-resources/documents/ey-gl-eu-sustainability-developments-v4-08-2025.pdf?utm_source=chatgpt.com)

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Last updated: September 3, 2025