ESRS E1 Climate Change
ESRS E1 is the topical EU reporting standard that requires companies under the CSRD to disclose their climate change mitigation, a transition plan towards climate neutrality, emission targets, and their Scope 1, 2 and 3 greenhouse gas emissions.
ESRS E1 Climate Change is one of the ten topical European Sustainability Reporting Standards (ESRS) adopted under the Corporate Sustainability Reporting Directive (CSRD) through Delegated Regulation (EU) 2023/2772. The standard governs which climate-related information a company must disclose in its sustainability statement. It addresses both the company's contribution to combating climate change (mitigation and adaptation) and the financial effects of climate-related risks and opportunities. ESRS E1 is regarded as the most demanding environmental standard, and it is material for nearly all reporting companies, since climate can rarely be classified as non-material in the materiality assessment.
At the heart of ESRS E1 are several disclosure requirements. E1-1 calls for a transition plan for climate change mitigation setting out how the business model is compatible with limiting global warming to 1.5 degrees Celsius and with climate neutrality by 2050. E1-4 requires concrete, ideally science-based emission reduction targets (for example aligned with the Science Based Targets initiative). E1-5 concerns energy consumption and energy mix, while E1-6 mandates disclosure of absolute gross greenhouse gas emissions by Scope 1 (direct emissions), Scope 2 (indirect emissions from purchased energy) and Scope 3 (the upstream and downstream value chain) in line with the GHG Protocol. In addition, E1-7 captures GHG removals and carbon credits, and E1-9 covers the anticipated financial effects.
Like all ESRS, E1 follows the principle of double materiality: companies report both on the impact of their activities on the climate (impact materiality) and on the effects of climate change on their financial position (financial materiality). If E1 is identified as material in the materiality assessment, the associated data points must be reported; if it is exceptionally deemed non-material, this conclusion must be justified in detail. The disclosures are integrated into the management report, tagged in the ESEF/XBRL format, and subject to external assurance with limited assurance. The European Commission's 2025 Omnibus package proposes adjustments to the scope and level of detail of the ESRS, so companies should keep monitoring the final design.
Legal Basis
ESRS E1 (Annex I of Delegated Regulation (EU) 2023/2772 under the CSRD/Directive (EU) 2022/2464); transposed into German law via Sections 289b et seq. and 315b et seq. HGB
Practical Example
A reporting machinery manufacturer classifies climate change as material in its materiality assessment. The sustainability officer first prepares a complete greenhouse gas inventory under the GHG Protocol: Scope 1 from the natural gas used in production, Scope 2 from purchased electricity, and Scope 3 mainly from purchased steel components and the use of the machines sold. On this basis the company sets a science-based reduction target of 42 percent by 2030 and describes the measures in its E1-1 transition plan, such as switching to renewable electricity and supplier programmes. All disclosures are integrated into the management report, tagged in the ESEF format, and reviewed by the auditor with limited assurance.