As environmental concerns grow, the importance of climate-related disclosures has never been more evident. Companies worldwide are under increasing pressure to provide transparent and comprehensive reports on their environmental impact, particularly regarding climate change. This shift is largely driven by the European Sustainability Reporting Standards (ESRS), which have revolutionized how businesses disclose climate-related information. ESRS requirements, particularly in the context of climate disclosure, are transforming reporting practices and making environmental transparency an integral part of corporate accountability.
One of the central goals of the Corporate Sustainability Reporting Directive (CSRD) is to provide more accurate and standardized environmental disclosures, with climate change being a major focal point. As a result, businesses are required to disclose not only their climate risks but also their efforts to mitigate these risks. Tools like refinq, a platform that helps companies manage environmental risks through advanced climate assessments, are increasingly important in helping organizations navigate the complexity of these requirements. Learn more about how refinq aids in climate reporting here.
The European Sustainability Reporting Standards (ESRS) were introduced to harmonize environmental disclosures across the European Union. These standards, part of the CSRD, make it mandatory for companies to disclose detailed information regarding their environmental, social, and governance (ESG) impacts. ESRS E1, in particular, focuses on climate change and requires businesses to report on the impacts of climate change on their operations, their contributions to climate change, and the actions they are taking to mitigate risks.
ESRS establishes a framework for companies to disclose information such as:
For more on how these standards are shaping reporting practices, check out this insight into the ESRS E1 requirements.
The ESRS mandates require companies to include detailed climate risk disclosures in their annual reports. These disclosures help stakeholders understand how companies are managing climate-related risks and opportunities. With climate disclosure becoming a key part of ESG reporting, companies are now expected to demonstrate how they are aligning their operations with international climate agreements like the Paris Agreement.
ESRS aligns closely with frameworks like the Taskforce on Climate-related Financial Disclosures (TCFD), encouraging companies to structure their reports around key themes such as transition plans, greenhouse gas (GHG) emissions, and energy consumption. This alignment makes it easier for investors, regulators, and consumers to assess a company’s environmental impact and its efforts to mitigate climate risks.
The ESRS E1 standard for climate disclosures focuses on several key areas that companies must address:
For more insights into the specifics of ESRS E1, check out this resource on climate disclosure.
With the growing complexity of climate reporting under the ESRS framework, businesses need robust tools to ensure they are meeting the disclosure requirements effectively. This is where refinq plays a critical role. refinq offers a suite of features designed to help businesses assess their climate risks and meet regulatory compliance standards.
By integrating machine learning and geospatial analysis, refinq enables businesses to conduct real-time climate risk assessments and forecast future environmental impacts based on climate scenarios. These insights are essential for companies to comply with ESRS E1’s disclosure requirements on emissions, energy usage, and transition plans.
refinq’s platform processes over 2.5 billion data points, providing businesses with granular data that can be used to create accurate, audit-ready reports on their climate risks and mitigation strategies. Whether a company needs to assess its exposure to physical climate risks or evaluate the effectiveness of its carbon offset projects, refinq delivers the data and insights necessary for comprehensive climate reporting.
Learn more about how refinq can help companies meet ESRS E1 requirements here.
One of the challenges companies face in adhering to ESRS standards is providing accurate data on their climate risks and opportunities. refinq solves this challenge by offering real-time risk evaluations and forecasts of future climate impacts. Companies can use these insights to not only comply with ESRS E1 but also make informed decisions about their climate strategies and investments.
For example, businesses can assess how different climate scenarios will impact their operations in the coming decades and adjust their transition plans accordingly. This ability to forecast environmental impacts is invaluable for investors and stakeholders, who are increasingly demanding more transparency around climate risks.
As part of ESRS E1, businesses are required to disclose their GHG emissions across all three scopes (Scope 1, Scope 2, and Scope 3). This requires a comprehensive understanding of emissions across the entire value chain, from direct emissions to those arising from supply chain activities.
refinq simplifies this process by providing businesses with the tools needed to measure, track, and report emissions accurately. The platform can also help companies identify areas where emissions reductions can be made, supporting efforts to meet science-based targets and achieve net-zero goals.
Under ESRS E1, companies must outline clear transition plans for reducing their carbon footprint. This includes specifying how they will decarbonize their operations, switch to renewable energy, and implement energy-efficient technologies. refinq supports these efforts by providing data-driven insights that can help companies identify the most effective decarbonization levers and track their progress over time.
Additionally, refinq helps businesses assess the financial impacts of their climate strategies, allowing them to better understand the potential risks and opportunities associated with climate-related investments. By integrating this data into their transition plans, companies can ensure that they are making strategic decisions that align with ESRS disclosure requirements and long-term sustainability goals.
For more on how refinq supports transition planning, visit this blog on ESRS and climate change.
As the ESRS continues to evolve, climate disclosure will become an even more integral part of corporate reporting. By embracing the standards set out in ESRS E1, companies can not only enhance transparency but also demonstrate their commitment to sustainability and climate action. The role of refinq in this transformation cannot be overstated, as its advanced risk assessments and data-driven insights provide businesses with the tools they need to comply with the ESRS and create meaningful, long-term climate strategies.
In conclusion, businesses that leverage platforms like refinq will be better positioned to meet regulatory demands, manage climate risks, and drive sustainable growth. As we move forward into 2025 and beyond, the transformation of climate disclosure via ESRS will continue to reshape how companies report on and act upon their climate impacts.
For more resources on climate disclosure under the CSRD and ESRS, check out the following links: