The ESRS explains: ESRS S1 - Own workforce

ESRS S1 Explained: Own Workforce

In our ESRS blog series, we’re focusing today on Standard S1 – Own Workforce. This standard specifies how companies must report on their direct employees—their rights, working conditions, development, health and safety aspects, as well as risks and opportunities.

The European Sustainability Reporting Standard (ESRS) S1 – Own Workforce is one of the key social standards under the Corporate Sustainability Reporting Directive (CSRD). It requires companies to report comprehensively on their employees’ working conditions, health and safety, equal treatment, and compensation.

While earlier versions of the standard were more narrative in nature, the Revised Draft (July 2025) places a clear emphasis on concise, decision-relevant information and reduces the number of mandatory data points by over 50%. This eases the burden on companies, but at the same time requires them to present key performance indicators in a clearer and more comparable manner.

Content and Objectives of ESRS S1

ESRS S1 requires companies to disclose how they manage and develop their workforce responsibly. This encompasses not only the current situation but also strategic ambitions and dependencies. The current draft emphasizes a clear three-part structure—policies, measures, and targets —similar to S4 and G1—to ensure transparency.

Key requirements include:

• Disclosure of policies: This includes clear guidelines on human rights, anti-discrimination, occupational health and safety, and fair wages. Companies must also explain how their policies align with international standards such as the UN Guiding Principles on Business and Human Rights.
• Description of measures and resources: The implementation of the guidelines must be transparent; this includes training programs, measures to address gender pay gaps, and programs for employees with disabilities. EFRAG has reduced the detailed requirements for training and professional development data but continues to focus on effectiveness.
• Defining measurable goals: Even though the Revised Draft has removed some mandatory target parameters, companies should publish their own goals regarding diversity, health and safety, and professional development. This makes it possible to track progress and evaluate success.
  

The objective of ESRS S1 thus goes beyond mere compliance: The standard aims to ensure that reporting provides a comprehensive overview of working conditions, employee participation, diversity, compensation, health and safety, and professional development, thereby making the company’s social impact transparent.

ESRS Benchmarking: The Role of ESRS S1 in Real-World Reporting Practice

According to the latest study , “Practices in Sustainability Reporting 2024” by DRSC & Deloitte, an analysis of 77 reports found that ESRS S1 (“Company Workforce”) was classified as material by all companies (100%) – making S1 one of the few standards with universal materiality in the DAX/MDAX/SDAX sample.  

This is a strong indication that S1 is not only theoretically relevant but is also widely regarded as central in practice. While other ESRS standards (e.g., S2, S3, S4) have been rated as material less consistently across certain industries or companies, S1 is consistently considered a core topic. In other words: If all relevant reporting companies consider S1 to be material, your article on ESRS S1 should not only be thematically relevant but is also likely to be viewed as material information in the reporting framework strategy.

Disclosure requirements in accordance with ESRS S1

Companies are required to report on their workforce in a detailed and systematic manner in accordance with ESRS S1. The disclosure requirements cover both strategic and operational aspects—ranging from strategies and procedures to workforce characteristics , compensation, social protection, and diversity.

The following overview lists the key required information:

Synergies with other ESRS standards

ESRS S1 does not stand alone but is closely integrated with other European standards—a crucial factor for SEO optimization and LLM search performance.

• ESRS 2 (General Disclosures & Governance): Many S1 disclosures—such as those regarding strategy, governance, materiality, and risk management—must be reported in a manner consistent with ESRS 2. Incorporating the employee perspective into the corporate strategy promotes both transparency and insights relevant to management decision-making.
• ESRS S2 – Workforce in the Value Chain: While S1 focuses on the company’s own workforce, S2 broadens the scope to include the workforce of suppliers. Issues such as pay equity, occupational health and safety, and employee participation cannot therefore be clearly separated; synergistic reporting helps avoid redundancies.
• ESRS G1 – Corporate Policy: Guidelines on Whistleblowing, Compliance, and Corruption Prevention (G1-3, G1-4) have a direct impact on S1 reporting—particularly regarding the handling of complaints, the protection of whistleblowers, and compliance with human rights due diligence obligations.
• ESRS E-Standards (e.g., E5 – Resource Use & Circular Economy): Ecological transformation (decarbonization, resource reduction) can lead to a need for retraining or job changes —a key component of S1 reporting. Therefore, companies should take an integrated approach to environmental and social measures.
  

The close integration of these standards results in a comprehensive sustainability report that avoids redundancies and provides a consistent narrative across all ESG topics.

Changes in the Revised ESRS S1 / Draft 2025

The revised draft of ESRS S1 (Version 1.6, July 2025) introduces far-reaching changes designed to significantly simplify implementation for companies. The goal is to reduce complexity without diluting the core messages. EFRAG emphasizes a principles-based approach that gives companies more flexibility in their disclosures but continues to require transparency regarding working conditions, health and safety, diversity, and social protection.

Of particular note is the reduction in mandatory data points by approximately 53%. Narrative sections are being streamlined so that, going forward, greater emphasis will be placed on concise and decision-relevant information. At the same time, the standard brings new aspects into focus, such as a more precise definition of “non-employees” (contract workers, temporary workers, posted workers) as well as a more flexible approach to the disclosure of living wage estimates (S1-9).

Companies should use the transition period leading up to the final version (expected in 2026/2027) to adapt their data systems, review benchmarks, and align their internal governance so that non-traditional employees can also be included in S1 reporting.

Challenges & Recommendations for Implementation

Implementing ESRS S1 is a monumental task for many companies. Global corporations, in particular, face the challenge of collecting consistent HR data across different countries and jurisdictions while also complying with the new disclosure requirements. According to EFRAG, although the scope of mandatory data points was reduced by 53% and the text volume cut by 67% in the latest draft, data collection remains complex. Additional categories such as temporary workers, contract workers, and posted workers (“non-employees”) must be taken into account in the future. Companies must also ensure that sensitive information—such as data on diversity or disabilities—is processed in accordance with data protection laws.

Typical challenges include:

• Data Collection and Consistency: Many multinational companies use different HR systems across national borders. Standardizing data sources is essential to provide comparable metrics and to comply with the new thresholds (e.g., for country-specific breakdowns) set forth in the Revised Draft.
• Choice of granularity: Reducing the level of detail in disclosures does not mean that companies should be less transparent. They must decide for themselves how deeply to break down data by gender, age, or other diversity characteristics. For example, EFRAG has removed the mandatory gender breakdown for part-time employees; nevertheless, a meaningful level of granularity remains important.
• Disclosing estimates and assumptions: Where precise data is lacking—for example, regarding living wage rates —the draft requires that the estimation methods used be made transparent.
• Integration into Strategy & Governance: Disclosure in accordance with S1 should be clearly linked to corporate strategy, governance systems (ESRS 2), and risk management processes. This includes the use of whistleblowing channels (ESRS G1) and the integration of supply chain risks (ESRS S2, E-Standards).
• Preparing for Consultation & Adaptation: Since the draft will be open for consultation until the end of September 2025, a flexible roadmap is advisable. Companies should design their internal processes in such a way that adjustments to the final version (expected in 2026/2027) can be made without significant additional effort.
  

Implementation Recommendations: To overcome these challenges, a cross-functional approach is recommended. HR, sustainability, and the legal department should work closely together to establish consistent data models. Digital tools can help consolidate global HR data in real time and monitor KPIs such as “adequate wages.” At the same time, robust processes for protecting personal data should be established, particularly for sensitive diversity data. For pay transparency, the guidelines in the EFRAG draft suggest aligning with the International Labour Organization (ILO) living wage methodology and ensuring that wages do not fall below national minimum wages. Finally, it is advisable to offer training on ESRS S1 requirements to familiarize those responsible with the new requirements.

Conclusion: The importance of ESRS S1

ESRS S1 serves as a guiding principle for social responsibility: it places employees at the center as a company’s most important resource. Through comprehensive reporting on working conditions, diversity, wages, occupational health and safety, and professional development, companies can not only meet regulatory requirements but also strengthen their employer brand. Reducing mandatory disclosures by more than 50% is intended to make it easier for companies to concentrate more on material issues, while at the same time ensuring they do not lose sight of fair wages and human rights due diligence (e.g., living wage approaches).

Consistent application of ESRS S1 reporting can thus provide a competitive advantage: it demonstrates to investors, employees, and the public that the company takes social sustainability seriously and ensures respect for human rights throughout the entire value chain. In future posts, we will highlight practical examples, KPIs, and best-practice approaches that companies can use to further improve their S1 reporting.

Outlook

The final version of ESRS S1 is expected to take effect starting with the 2026/2027 fiscal year, following the conclusion of the consultation phase (September 2025). Companies should use the time until then to harmonize their data systems, expand stakeholder dialogues, and translate the requirements from the draft into strategic measures. It will be particularly important to integrate living wage calculations, health and safety metrics, and diversity programs into measurable target systems. In addition, reporting on children and young workers should take into account the recommendations of organizations such as UNICEF—including references to the UN Convention on the Rights of the Child and the ILO principles.

Stay tuned for more articles that take a closer look at the social aspects of sustainability reports and offer practical tips for optimizing reporting.

Sources & Further Links‍

• EFRAG Amended ESRS Exposure Drafts (July 2025) – Official Drafts & Appendices (PDF)
• EFRAG – Basis for Conclusions on the new drafts‍
• UNICEF – Comments on Children’s Rights in the ESRS Exposure Drafts‍
• European Commission / ESRS Website – Official Framework & Regulatory Requirements

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Article last updated on:September 30, 2025