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When it comes to corporate sustainability reporting, including ESRS S1 Own Workforce, there are many different factors at play. The rules and regulations are ever-evolving, even as I type this sentence.
📚 Enter: The European Sustainability Reporting Standards (ESRS).
So, what are the standards? How do they relate to the EU Corporate Social Responsibility Directive (CSRD)? How many other abbreviations do you need to master in order to be compliant? The latter is up to you. So, keep reading to find out more about ESRS, S1 Own Workforce, and why HR leaders need to pay attention.
The EU Corporate Social Reporting Directive (CSRD) is a new directive that promotes transparency in the business world. Introduced by the European Union, it’s a significant evolution in the realm of Environment, Social, and Governance (ESG) and corporate sustainability reporting.
The CSRD will replace the Non-Financial Reporting Directive (NFRD) which has been in place since 2018. Many large and publicly traded organizations will need to comply with the CSRD with data starting from 2024.
Learn more about which companies need to comply with the CSRD and the timeline.
This new directive aims to enhance the consistency and comparability of sustainability information in an era where consumers and investors are increasingly concerned about ethical business practices. What’s more, the CSRD requires organizations to disclose both quantitative and qualitative information. This will show not only how organizations are measuring success, but the steps they are taking to improve over time.
The European Sustainability Reporting Standards (ESRS or “the standards”) are a set of 12 guidelines, developed by EFRAG, that outline clear principles and methodologies for the organizations required to report on their Environmental, Social, and Governance (ESG) efforts and comply with the CSRD. As of this writing, that includes nearly 49,000 companies globally.
So, while they are interconnected, the ESRS and the CSRD serve distinct functions. The CSRD sets the legal framework and reporting obligations; while the ESRS outlines the methodologies for compliance.
Out of the 12 ESRS, the one People Analytics and HR Leaders need to pay attention to is ESRS S1 Own Workforce. S1 (Own Workforce) falls under the Social Standards category, along with S2 (Workers in the value chain), S3 (Affected communities, and S4 (Consumers and end-users).
ESRS S1 Own Workforce requires companies to report on HR metrics including policies for managing impacts on their workforce, such as risks and opportunities. There are more than 50 quantitative metrics as well as qualitative insights which require deep explanations in order to be compliant.
Among other things, HR professionals should be prepared to disclose whether there are company policies aimed at promoting work-life balance, diversity and inclusion, improving health and safety measures, and providing adequate pay. On top of that, you’ll need the metrics to prove whether or not these policies are making an impact.
We cannot stress this enough—CSRD reporting is mandatory—and there are serious consequences to consider if you’re not prepared. By getting ahead of your ESRS S1 reporting now, you’ll not only be in the clear compliance-wise, but you’ll gain valuable insights to help drive change. These insights will also clearly show if your efforts are positively affecting both your employees and the planet. 🌍
For more on how to kickstart your ESRS S1 Own Workforce reporting, get our comprehensive guide. ⬇️