Comparative analysis of ESRS and IFRS sustainability reporting standards: the materiality issue

In the interests of greater transparency and environmental responsibility, the Institut de la Finance Durable has published a note comparing the European sustainability reporting standards ESRS with the international standards of the ISSB (IFRS S1 and S2), particularly in terms of the issue of materiality. This comparative analysis leads to a number of conclusions:

• The materiality approach: the ESRS apply a principle of double materiality, requiring companies to report the financial and socio-environmental impacts of their activities. In contrast, IFRS focuses mainly on the financial implications.
• Disclosure requirements: European companies must comply with ESRS standards from January 2025 for the 2024 financial year, introducing greater reporting requirements, notably in terms of the number of ESG themes covered.
• Interoperability and global alignment: companies will need to be vigilant about the differences in requirements between the two sets of standards, but strong interoperability has been ensured with regard to climate-related reporting.
• Adoption of these standards requires strategic adjustments to align corporate practices with global sustainability objectives, directly influencing future planning and allocation of financial resources.

To find out more about the impact of these standards on your business, and how you can best prepare, read our full analysis, as well as the interoperability guide produced jointly by EFRAG and ISSB.