The ESRS explains: ESRS S4 - Consumers & end users

In our ESRS blog series, today we’re focusing on ESRS S4, the standard for reporting on social aspects related to consumers and end users. This standard requires companies to transparently describe how their products and services affect people—for example, in terms of health, safety, data protection, inclusion, and potential dependencies.

Recent drafts (e.g., the Amended ESRS S4 (July 2025)) confirm that, going forward, disclosures should align even more closely with the three-part framework of policies → actions → goals. In addition, the requirements for data points have been clarified and, in some cases, streamlined, particularly with a view to practical implementability.  

What is ESRS S4? - Core Principles and Objectives of ESRS S4

ESRS S4 requires companies to disclose information on the following aspects, provided they are material:

1. Policies regarding interactions with consumers and end users, particularly with regard to identifying, assessing, and managing both negative and positive impacts.
2. Measures and resources for prevention, mitigation, remediation, or promotion of positive effects, as well as monitoring of effectiveness.
3. Targets for monitoring and controlling performance over time (if available).
   

In addition, the standard requires disclosure of the risks and opportunities arising from dependencies on consumers or end users, as well as the financial impact of these risks and opportunities on the company.  

Thematically, ESRS S4 focuses on three key categories of impact:

• Information & Data Protection (e.g., privacy, access to information)  
• Health & Safety (e.g., product safety, child protection)  
• Social Inclusion & Non-Discrimination (e.g., equitable access, fair marketing practices)  

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

The ESRS S4 standard aims to provide users of sustainability statements with a clear and consistent picture of,

• how a company shapes its relationship with its consumers and end users,
• what negative or positive effects products or services have on these groups,
• what risks and opportunities this presents for the company (e.g., reputational damage, regulation, dependencies),
• and *how these aspects are integrated into strategy, governance, and control.
  

The standard explicitly requires that organizations consider not only past impacts but also dependencies—such as the extent to which a business model relies on recurring use by end users—and how these relationships are incorporated into risk assessment and strategic direction.

Synergies with other ESRS standards

ESRS S4 should not be viewed in isolation: There are close links to several other ESRS standards:

• ESRS 2 (Strategy, Governance, Materiality Assessment): The entire S4 section must be consistent with the company’s strategy, governance structures, and materiality analysis. The user perspective influences how the strategy and business model are assessed. (See ED S4; references to SBM-2 and SBM-3 in the Appendix)  
• ESRS S1 and S2 (own workforce and workers in the value chain): Many aspects—such as human rights, fair treatment, and external stakeholders—overlap, particularly when consumers are also employees or members of communities.
• ESRS G1 (Corporate Policy/Governance): Policies, compliance mechanisms, codes of conduct, and whistleblowing systems that form part of a company’s corporate policy have a direct impact on how a company interacts with consumers (e.g., in data protection or corruption prevention).
• ESRS E-Standards (e.g., E2 Environmental Pollution, E5 Resource Use): A product’s environmental impacts (e.g., emissions, waste) affect consumers and their trust in products; product lifespan and repairability also link environmental and social aspects.
  

These overlaps require companies to structure their reports across sectors—avoiding redundancies and using consistent narratives.

Challenges during implementation

Companies face specific challenges when implementing ESRS S4:

1. Identification of affected user groups

Consumers and end users are a diverse group—factors such as age, vulnerability, and usage context must be taken into account in order to accurately assess their impact.

2. Dialogue & Feedback Mechanisms

Establishing reliable channels (e.g., hotlines, platforms, consumer advocacy groups) and ensuring that they are actually used and evaluated is a technically and organizationally challenging task.

3. Measurability and indicators of effectiveness

Measures are only effective if their impact can be measured. Companies must define appropriate KPIs and monitoring processes.

4. Data Sources and Dependencies

Some information—such as that regarding data protection, usage patterns, or health effects—is based on data provided by users or third parties. The reliability and availability of such data are often limited.

5. Integration into the business model and strategy

Disclosures must be consistent with ESRS 2—that is, the influence of consumers on strategy, business model, and risks must be evident.

Changes in the current EFRAG draft (July 2025) + Info box

The Amended ESRS S4 Exposure Draft from July 2025 introduces significant clarifications and adjustments that companies should take seriously. Some of the key changes:

• Introduction of a clear three-part structure: Policy → Measures → Goals (instead of a mixed format) to increase transparency and structure.  
• A significant reduction in mandatory data points as part of the overall simplification initiative—across the entire package, more than 50% of the “shall” data points are being eliminated or modified for many standards.  
• Greater emphasis on effectiveness: Companies should not only describe measures but also disclose indicators or criteria for assessing their impact. (§S4-4)  
• Enhanced requirements for feedback channels and complaint mechanisms (S4-3), with a focus on transparency, trustworthiness, and protection against retaliation.  
• Greater emphasis on identifying dependencies and financial impacts than in previous versions (e.g., such as a decline in user numbers, liability risks in the event of data breaches).  

Conclusion & Outlook

ESRS S4 is a critical standard for customer-centric business models—it brings transparency to the relationships between companies and consumers. The latest draft expands on the requirements in terms of effectiveness, consultation, and performance management.

Companies should start early to establish reliable feedback channels, define KPIs for measuring impact, and ensure that disclosures are consistent with their strategy and risk management (ESRS 2).

In light of the planned release of the final ESRS version (expected in 2026/2027) and the ongoing consultation phase, which runs through September 29, 2025 (quick-fix periods), it is advisable to plan the implementation step by step.  

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Last updated on: September 5, 2025