These reporting standards are here to create uniform and consistent standards that can be analyzed within and across industries. Sectoral standards are being developed as we speak to deal with the different necessities and address the specific impact these industries have on the environment. However, there is a general outline for all standards that correspond to the following structure:
1. TRANSVERSAL STANDARDS
A) General Conditions
B) General Information
2. THEMATIC STANDARDS
i. Climate Change
iii. Water and maritime resources
iv. Biodiversity and ecosystems
v. Resource use and circular economy
i. Own workforce
ii. Workers in the value chain
iii. Affected communities
iv. Consumers and end-users
For those who have been following these subjects for a while might have identified a pattern here, and this is not a casual coincidence. These standards follow the EU Taxonomy categories and look into the same categories that the GRI reporting standards address in their methodology. This is because the ESRS, and the CSRD, is here to unify the international reporting standards and align them with the Sustainable Finance Disclosure Regulation.
Why, you might ask?
We must not forget the context in which all of these regulations are designed. The EU Action Plan aims to redirect capital flows into sustainable, circular, and transparent investments. In order to do so, the financial sector requires information regarding the assets in which they would invest in, to analyze their environmental and social impact, and understand the climate-related risks of the business model. It is then that the ESRS steps up to the challenge by providing a reporting framework to create comparable and uniform standards that can be used by financial institutions to finance companies with sustainable and circular business practices.
We invite the reader to look into the first drafts of ESRS, following this link, where you will find several explanatory videos that address each category and set of standards. We will also keep you posted on the upcoming sectoral standards that will impact the textile and fashion industry.