Quick Answer — ESRS and UK Impact
What are ESRS?
ESRS Set 1 comprises 12 standards developed by EFRAG and adopted by the European Commission3 on 31 July 20231:
Cross-cutting standards
- ESRS 1: General requirements for disclosure of sustainability-related financial information
- ESRS 2: General disclosures (mandatory for all companies)
Environmental standards (E1-E5)
- ESRS E1: Climate change
- ESRS E2: Pollution
- ESRS E3: Water and marine resources
- ESRS E4: Biodiversity and ecosystems
- ESRS E5: Resource use and circular economy
Social standards (S1-S4)
- ESRS S1: Own workforce
- ESRS S2: Workers in the value chain
- ESRS S3: Affected communities
- ESRS S4: Consumers and end-users
Governance standard
- ESRS G1: Business conduct
All standards except ESRS 2 are subject to materiality assessment3. ESRS is built on double materiality principle — considering both financial materiality and impact materiality.
CSRD Timeline Post-Omnibus
Original CSRD adopted: December 2022
ESRS Set 1 adopted: 31 July 20231
FY2024 first reporting: Large public-interest entities (>500 employees) under original thresholds
Omnibus proposals: February 2025
Omnibus adoption: 26 February 20262
Revised thresholds effective: Financial years beginning 1 January 20272
What the CSRD Omnibus Changed
Scope reduction (~90% fewer companies)
New thresholds for EU companies:
- 1,000+ full-time equivalent employees (up from 250)
- €450 million+ annual net turnover (up from €20 million)
- Either threshold triggers CSRD scope (not both required)
Third-country (non-EU) companies:
- Parent: €450 million+ net turnover
- EU subsidiary/branch: €200 million+ generated turnover
What was preserved
- Double materiality principle
- Limited assurance requirement
- Digital reporting format (ESEF)
- 12 ESRS standards framework
Additional reliefs
- Listed SMEs fully exempt
- Certain financial holding companies exempt from consolidated reporting
- Reduced mandatory datapoints by 60%+
- Member State transitional exemptions for 2025-2026
ESRS vs UK SRS Comparison
| Aspect | ESRS / CSRD | UK SRS |
|---|---|---|
| Authority | European Commission / EFRAG | DBT (UK) / FCA |
| Standards count | 12 (Set 1) | 2 (S1, S2) |
| Scope basis | Size + EU presence | UK listing status |
| Companies affected | ~10,000 EU (post-Omnibus) | ~515 UK |
| Materiality | Double (financial + impact) | Single (enterprise value) |
| Baseline | Independent ESRS framework | IFRS S1/S2 with 6 UK amendments |
| Assurance | Limited assurance (mandatory) | ISSA (UK) 5000 (proposed) |
| Status | In force (phased FY2024+) | UK SRS S2 proposed 2027 |
| UK applicability | EU operations only | UK listed companies |
Do UK Companies Need to Comply with ESRS?
Direct scope: Only via EU operations meeting post-Omnibus CSRD thresholds (1,000+ employees and €450 million+ turnover)2.
Indirect scope: Large UK groups with substantial EU subsidiaries meeting the revised thresholds may need CSRD reporting at EU subsidiary level.
Voluntary adoption: Any UK company can adopt ESRS voluntarily, though UK SRS thresholds apply for UK-listed companies under FCA CP26/54.
Dual-listed considerations: UK companies with US/EU dual listings may face multiple frameworks depending on jurisdiction-specific requirements.
UK SRS vs ESRS for Global Groups
Large UK groups operating across multiple jurisdictions face complex reporting boundary decisions:
UK parent company: Subject to UK SRS if premium-listed (~515 companies from 20274)
EU subsidiaries: Subject to CSRD if meeting post-Omnibus thresholds (1,000+ employees, €450 million+ turnover2)
Disclosure equivalence: No automatic mutual recognition between UK SRS and ESRS frameworks — separate compliance required for each jurisdiction
Practical guidance: Groups often adopt common methodology and data systems while preparing jurisdiction-specific disclosures to meet both UK SRS and ESRS requirements
What are European Sustainability Reporting Standards?
ESRS are 12 disclosure standards adopted by the European Commission on 31 July 2023 under the Corporate Sustainability Reporting Directive (CSRD). They cover environmental (E1-E5), social (S1-S4), and governance (G1) topics, plus cross-cutting requirements (ESRS 1 and 2).
What is CSRD?
The Corporate Sustainability Reporting Directive (CSRD) is EU legislation requiring large companies to report sustainability information using ESRS standards. Post-Omnibus (2026), scope is reduced to companies with 1,000+ employees and €450 million+ turnover.
Do UK companies need to comply with CSRD?
Not directly post-Brexit. UK companies are only subject to CSRD if they have EU operations (subsidiaries or branches) meeting the post-Omnibus thresholds. UK-listed companies follow UK SRS under FCA CP26/5 instead.
How is CSRD different from UK SRS?
CSRD uses double materiality and applies to EU companies above size thresholds. UK SRS uses single materiality (enterprise value) and applies to UK premium-listed companies (~515) regardless of size. Different authorities: European Commission vs UK DBT/FCA.
What did the CSRD Omnibus change?
The Omnibus (February 2026) raised thresholds from 250 to 1,000 employees and increased turnover threshold to €450 million, reducing scope by ~90%. Listed SMEs are now fully exempt, and mandatory datapoints reduced by 60%+.
When does ESRS apply from?
ESRS applies from FY2024 for large public-interest entities under original thresholds, with revised Omnibus thresholds effective from financial years beginning 1 January 2027. First reports published in 2025.