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The „G“ of ESG in the ESRS (Updated)

The “G” for “Governance” stands for controlled and transparent corporate management and includes topics that support sustainable corporate management, such as corporate values or management and control processes. The ESRS (European Sustainability Reporting Standards) Exposure Drafts define on a very detailed level the future reporting requirements of the CSRD. Below you find an overview of the topics included in the Standards for Governance-topics. In November 2022 the Exposure Drafts have been updated in a version that has been sent to the EU-Commission. In this updated version the datapoints to report have been reduced and topics have been summarized. 

Table of contents

The respective standards can be found here. This Article has been Updated in February 2023

DRAFTS TO EU-COMMISSION

G1: Governance, risk management and internal control

ESRS 2 General disclosures

Impact, risk and opportunity management

  • Disclosure Requirement G1-1– Corporate culture and business conduct policies
  • Disclosure Requirement G1-2 – Management of relationships with suppliers
  • Disclosure Requirement G1-3 – Prevention and detection of corruption/bribery

Metrics and targets 6

  • Disclosure Requirement G1-4 – Confirmed incidents of corruption or bribery
  • Disclosure Requirement G1-5 – Political influence and lobbying activities
  • Disclosure Requirement G1-6 – Payment practices

EXPOSURE DRAFTS

G1: Governance, risk management and internal control

Strategy and business model, governance and organisation, Impacts, risks and opportunities

  • Disclosure Requirement G1-1 – Governance structure and composition

Policies, targets, action plans and resources

  • Disclosure Requirement G1-2 – Corporate governance code or policy
  • Disclosure Requirement G1-3 – Nomination process
  • Disclosure Requirement G1-4 – Diversity policy
  • Disclosure Requirement G1-5 – Evaluation process
  • Disclosure Requirement G1-6 – Remuneration policy
  • Disclosure Requirement G1-7 – Risk management processes
  • Disclosure Requirement G1-8 – Internal control processes

Performance measurement

  • Disclosure Requirement G1-9 – Composition of the administrative, management and supervisory bodies
  • Disclosure Requirement G1-10 – Meetings and attendance rate

G2: Business conduct

Strategy and business model, governance and organisation, impacts, risks and opportunities

  • Disclosure Requirement G2-1– Business conduct culture

Policies and targets

  • Disclosure Requirement G2-2 – Policies and targets on business conduct

Action plans and dedicated resources

  • Disclosure Requirement G2-3 – Prevention and detection of corruption and bribery
  • Disclosure Requirement G2-4 – Anti-competitive behaviour prevention and detection

Performance measures

  • Disclosure Requirement G2-5 – Anti-corruption and anti-bribery training
  • Disclosure Requirement G2-6 – Corruption or bribery events
  • Disclosure Requirement G2-7 – Anti-competitive behaviour events
  • Disclosure Requirement G2-8 – Beneficial ownership
  • Disclosure Requirement G2-9 – Political engagement and lobbying activities
  • Disclosure Requirement G2-10 – Payment practices

Next Steps

As shown above the ESRS (European sustainability reporting standards) are a comprehensive regulation that must be prepared in due time. If you want to start the preparation for the CSRD. Contact us, now.

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Georg Tichy

Georg Tichy

Georg Tichy is a management consultant in Europe, focusing on top-management consultancy, projectmanagement, corporate reporting and fundingsupport. Dr. Georg Tichy is also trainer, lecturer at university and advisor on current economic issues. Contact me or Book a MeetingView Author posts