In this post of our blog series on the European Sustainability Reporting Standards (ESRS), we focus on the ESRS S4 standard, which addresses social impacts on consumers and end users. The standard requires transparency about how companies interact with these groups and how their products or services affect the health, safety and rights of consumers. It also considers how dependence on consumers and end users shapes a company's strategy and business model.

What is ESRS S4?

ESRS S4 deals with the social impacts, risks and opportunities associated with the products and services offered by the company for consumers and end users. In particular, it deals with:

• Information: Protection of customer data, freedom of expression, access to information.
• Safety: Health and safety of consumers, including children.
• Social inclusion: freedom from discrimination and access to products and services.

The aim of the standard is to understand how companies prevent or mitigate potentially negative impacts on consumers and end users and what measures are taken to promote positive social impacts.

Disclosure requirements in accordance with ESRS S4

Under ESRS S4, companies are obliged to report on their strategies and measures in relation to consumers and end users. An overview of the main disclosure requirements can be found here:

Objective of ESRS S4

ESRS S4 aims to require companies to disclose the impacts of their products and services on consumers and end users. The standard addresses how companies identify and address potential negative impacts and what measures they take to promote positive change. The standard is strongly aligned with the UN Guiding Principles on Business and Human Rights to ensure comprehensive reporting.

Synergies with other ESRS standards

ESRS S4 is closely related to other social standards, in particular ESRS S2, which deals with labor in the value chain, and ESRS S3, which focuses on the affected communities. ESRS S4 also overlaps with ESRS G1, which relates to governance, particularly in relation to the protection of consumer rights.

Challenges during implementation

It can be challenging for companies to collect and evaluate comprehensive data on the impact on consumers and end users. Companies must also ensure that they provide appropriate channels and procedures for consumers to voice their concerns. The protection of customer data and compliance with data protection guidelines are also critical issues that companies need to keep under constant review.

Conclusion: The importance of ESRS S4

ESRS S4 is a central standard for companies that have direct contact with end consumers and customers. By reporting on social impacts, health and safety aspects and the protection of consumer rights, companies contribute to responsible and transparent business practices. These standards not only strengthen consumer confidence, but also minimize legal and reputational risks.

Outlook

In upcoming posts, we will dive deeper into the practical implementation of ESRS S4 and how companies can meet these reporting requirements efficiently and effectively. Stay tuned for more insights and practical recommendations.