European Union - Corporate Sustainability Reporting Directive (CSRD)
Date of Adoption: 5 Jan 2023
Date of Enforcement: 1 Jan 2024

This new EU legislation replaces the EU’s Non-Financial Reporting Directive (NFRD). It requires companies to report through the European Sustainability Reporting Standards (ESRS) annually, with electronically readable and searchable reports.

The Directive will apply (timeline amended by EU Omnibus in Feb 2026):

  • 1 January 2027: to EU entities within Companies in Scope
  • 1 January 2028: to non-EU entities within Companies in Scope

The PSCI is not a certification or compliance body but it offers tools to members that can used as part of your company’s due diligence processes.

Please note that this summary was drafted by the PSCI Secretariat. PSCI members and suppliers are advised to read the legislation in its entirety.

Animal Welfare

Legislative provisions

The following legislative provisions are included:
 
The disclosures shall cover, "where applicable, whether the undertaking has in place policies with respect to animal welfare".
For detailed requirements, see the Delegated Regulation, ESRS G1

PSCI Principles

The following PSCI Sub-Principles are relevant to this issue:
Ethics Animal Welfare
Animals shall be treated humanely with pain and stress minimized. Animal testing should be performed after consideration to replace animals, to reduce the numbers of animals used, or to refine procedures to minimize distress. Alternatives should be used wherever these are scientifically valid and acceptable to regulators.

Resources

You may find the following PSCI Resources useful as part of your company’s due diligence process on this issue:
Anti-Corruption and Bribery

Legislative provisions

The main required disclosures related to corruption and bribery are:
  • The functions within the undertaking that are most at risk in respect of corruption and bribery
  • Information about the undertaking's system to prevent and detect, investigate, and respond to allegations or incidents relating to corruption and bribery including the related training, including:
    • A description of the procedures in place to prevent, detect, and address allegations or incidents of corruption and bribery
    • Whether the investigators or investigating committee are separate from the chain of management involved in the matter
    • The process, if any, to report outcomes to the administrative, management and supervisory bodies
  • Where the undertaking has no such procedures in place, it shall disclose this fact and, where applicable, its plans to adopt them
  • Information about how the undertaking communicates its policies to those for whom they are relevant to ensure that the policy is accessible and that they understand its implications
  • Information about the following with respect to training: the nature, scope and depth of anti-corruption and anti-bribery training programme; offered or required by the undertaking; the percentage of functions-at-risk covered by training programmes; and the extent to which training is given to members of the administrative, management and supervisory bodies
In addition,
  • The undertaking shall disclose: the number of convictions and the amount of fines for violation of anti-corruption and anti-bribery laws; any actions taken to address breaches in procedures and standards of anti-corruption and anti-bribery
  • The undertaking may disclose: the total number and nature of confirmed incidents of corruption or bribery; the number of confirmed incidents in which own workers were dismissed or disciplined for corruption or bribery-related incidents; the number of confirmed incidents relating to contracts with business partners that were terminated or not renewed due to violations related to corruption or bribery; and details of public legal cases regarding corruption or bribery brought against the undertaking and its own workers during the reporting period and the outcomes of such cases. This includes cases that were initiated in previous years where the outcome was only established in the current reporting period.
For detailed requirements, see the Delegated Regulation, ESRS G1-2, G1-3, G1-4

PSCI Principles

The following PSCI Sub-Principles are relevant to this issue:
Ethics Anti-bribery & corruption
All forms of corruption, including bribery, extortion and embezzlement, are prohibited. Suppliers shall not pay or accept bribes, or participate in other corrupt inducements in business or government relationships, or through the use of intermediaries to secure an unfair advantage. Suppliers shall ensure they have adequate systems in place to prevent corruption and comply with applicable laws.
Ethics Conflicts of interest
Suppliers shall take reasonable care to identify, avoid, and manage conflicts of interest. Suppliers are expected to notify all affected parties if an actual or potential conflict of interest arises.

SAQ & Audit template

The PSCI SAQ & Audit Template collects responses relevant to this issue:

Management Systems Section:
Question 3: Are there any regulatory compliance issues with regards to Health and Safety, Ethics, Environment or Labor? (including anti-bribery and corruption)

Ethics Section:
Question 14: Does the facility or company have formal ethics policies, Codes of Conduct, tools or processes that govern company and employee business practices? (including anti-bribery and corruption)

Resources

You may find the following PSCI Resources useful as part of your company’s due diligence process on this issue:
Impact on Consumers and Patients

Legislative provisions

The following legislative provisions are included:
 

Information-related impacts for consumers and/or end-users: "The undertaking shall describe its policies adopted to manage the material impacts of its products and/or services on consumers and end-users, as well as associated material risks and opportunities."

Areas covered are:

Information-related impacts for consumers and / or end-users:

  • Privacy
  • Freedom of expression
  • Access to (quality) information

Personal safety of consumers and / or endusers:

  • Health and safety
  • Security of a person
  • Protection of children

Social inclusion of consumers and / or endusers:

  • Non-discrimination
  • Access to products and services
  • Responsible marketing practices

This sustainability matter is broad, so please see detailed disclosure requirements in the Delegated Regulation, ESRS S4

PSCI Principles

The following PSCI Sub-Principles are relevant to this issue:
Ethics Patient safety & access to information
Suppliers shall ensure that adequate management systems are in place to minimize the risk of adversely impacting on the rights of patients, subjects and donors, including their rights to health and to access information directly.

Resources

There are currently no PSCI resources on this topic.
Privacy

Legislative provisions

The following legislative provisions are included:

The main required disclosures related to privacy are:

"An explanation of the general approach the undertaking takes to identify and manage any material actual and potential impacts on its own workforce [, in its value chain, and on the consumers and / or end-users related to its products and / or services] in relation to the following social, including human rights, factors or matters: [...] privacy"

For detailed requirements, see the Delegated Regulation, ESRS S1, S2, S3

PSCI Principles

The following PSCI Sub-Principles are relevant to this issue:
Ethics Data privacy & security
Suppliers shall safeguard and make only proper use of confidential information to ensure that company, worker, patient, subject and donor privacy rights are protected. Suppliers shall comply with applicable privacy and data protection laws and ensure the protection, security and lawful use of personal data.

SAQ & Audit template

The PSCI SAQ & Audit Template collects responses relevant to this issue:

Management Systems Section:
Question 6: Does the facility and/or company have policies and/or practices in place to risk assess their programs and potential impacts on responsible business conduct principles? (including data privacy and security)

Ethics Section:
Question 15: Does the facility or company ensure confidentiality and privacy of information concerning companies, individuals, workers, patient rights and intellectual property? Data Privacy / General Data Protection Regulation (GDPR) / Other (please explain)

Resources

You may find the following PSCI Resources useful as part of your company’s due diligence process on this issue:
Child Labor

Legislative provisions

The following legislative provisions are included:
The main required disclosures related to child labor are:
  • "An explanation of the general approach the undertaking takes to identify and manage any material actual and potential impacts on its own workforce [and in its value chain] in relation to the following social, including human rights, factors or matters: [...] child labour"
  • "The undertaking shall state whether its policies in relation to its own workforce explicitly address [...] child labour."
  • The undertaking shall provide the following information: own "operations at significant risk of incidents of child labour either in terms of: i. type of operation (such as manufacturing plant); or ii. countries or geographic areas with operations considered at risk", as well as "any geographies, at country level or other levels, or commodities for which there is a significant risk of child labour [...], among workers in the undertaking’s value chain".
  • "When disclosing the material risks and opportunities related to its impacts or dependencies on its own workforce, the undertaking may consider [...] risks related to the undertaking’s impacts on its own workforce may include the reputational or legal exposure where people in the undertaking’s workforce are found to be subject to forced labour or child labour"
  • "The undertaking shall disclose the following information regarding identified cases of severe human rights incidents (e.g., [...] child labour):
    • (a) the number of severe human rights incidents connected to the undertaking’s workforce in the reporting period, including an indication of how many of these are cases of non-respect of the UN Guiding Principles on Business and Human Rights, ILO Declaration on Fundamental Principles and Rights at Work or OECD Guidelines for Multinational Enterprises. If no such incidents have occurred, the undertaking shall state this
    • (b) the total amount of fines, penalties and compensation for damages for the incidents described in (a) above, and a reconciliation of the monetary amounts disclosed in the most relevant amount in the financial statements"
For detailed requirements, see the Delegated Regulation, ESRS S1-4, S1-17, S2-4

PSCI Principles

The following PSCI Sub-Principles are relevant to this issue:
Human Rights Child labor & Young workers
Suppliers shall not use child labor. The employment of young workers below the age of 18 shall only occur in non-hazardous work and when young workers are above a country’s legal age for employment or the age established for completing compulsory education.

SAQ & Audit template

The PSCI SAQ & Audit Template collects responses relevant to this issue:
Human Rights and Labor section:
  • Question 17: Does the facility or company have a policy(ies) (or statement of commitment) regarding human rights and labor practices? (including for Child Labor)
  • Question 23: Does the facility or company ensure that no child labour takes place in their operations?
  • Question 24: Please briefly describe the activities performed by young workers.

Resources

You may find the following PSCI Resources useful as part of your company’s due diligence process on this issue:
Fair Treatment

Legislative provisions

The following legislative provisions are included:
The main required disclosures related to fair treatment are:
  • "An explanation of the general approach the undertaking takes to identify and manage any material actual and potential impacts on its own workforce [and in its value chain] in relation to the following social, including human rights, factors or matters: [...] measures against violence and harassment in the workplace"
  • "The undertaking shall disclose whether it has specific policies aimed at the elimination of discrimination, including harassment, promoting equal opportunities and other ways to advance diversity and inclusion;"
  • "The undertaking shall disclose the number of work-related incidents and/or complaints and severe human rights impacts within its own workforce, and any related material fines, sanctions or compensation for the reporting period. [...] It includes, subject to the relevant privacy regulations, work-related incidents of discrimination on the grounds of gender, racial or ethnic origin, nationality, religion or belief, disability, age, sexual orientation, or other relevant forms of discrimination involving internal and/or external stakeholders across operations in the reporting period. This includes incidents of harassment as a specific form of discrimination."
For detailed requirements, see the Delegated Regulation, ESRS S1-1, S1-17, S2-4

PSCI Principles

The following PSCI Sub-Principles are relevant to this issue:
Human Rights Fair treatment
Suppliers shall provide a work environment free of harassment, harsh and inhumane treatment, including any sexual harassment, sexual abuse, corporal punishment, mental or physical coercion or verbal abuse of workers and no threat of any such treatment.

SAQ & Audit template

The PSCI SAQ & Audit Template collects responses relevant to this issue:
Human Rights section:
  • Question 17: Does the facility or company have a policy(ies) (or statement of commitment) regarding human rights and labor practices? (including for Non-harassment)
  • Question 23: How does the facility or company ensure that there is no harassment [...] based on race, caste, national origin, religion, age, disability, gender, marital status, pregnancy, sexual orientation, union membership or political affiliation and is a corresponding policy in place?

Resources

You may find the following PSCI Resources useful as part of your company’s due diligence process on this issue:
Forced Labor

Legislative provisions

The following legislative provisions are included:
The main required disclosures related to forced labor are:
  • "An explanation of the general approach the undertaking takes to identify and manage any material actual and potential impacts on its own workforce [and in its value chain] in relation to the following social, including human rights, factors or matters: [...] forced labor"
  • "The undertaking shall state whether its policies in relation to its own workforce explicitly address trafficking in human beings, forced labour or compulsory labour"
  • The undertaking shall provide the following information: own "operations at significant risk of incidents of forced labour or compulsory labour either in terms of: i. type of operation (such as manufacturing plant); or ii. countries or geographic areas with operations considered at risk", as well as "any geographies, at country level or other levels, or commodities for which there is a significant risk of [...] forced labour or compulsory labour, among workers in the undertaking’s value chain".
  • "When disclosing the material risks and opportunities related to its impacts or dependencies on its own workforce, the undertaking may consider [...] risks related to the undertaking’s impacts on its own workforce may include the reputational or legal exposure where people in the undertaking’s workforce are found to be subject to forced labour"
  • "The undertaking shall disclose the following information regarding identified cases of severe human rights incidents (e.g., forced labour , human trafficking [...]):
    • (a) the number of severe human rights incidents connected to the undertaking’s workforce in the reporting period, including an indication of how many of these are cases of non-respect of the UN Guiding Principles on Business and Human Rights, ILO Declaration on Fundamental Principles and Rights at Work or OECD Guidelines for Multinational Enterprises. If no such incidents have occurred, the undertaking shall state this
    • (b) the total amount of fines, penalties and compensation for damages for the incidents described in (a) above, and a reconciliation of the monetary amounts disclosed in the most relevant amount in the financial statements"
For detailed requirements, see the Delegated Regulation, ESRS S1-1, S1-4, S1-17, S2-4

PSCI Principles

The following PSCI Sub-Principles are relevant to this issue:
Human Rights Freely chosen employment
Suppliers shall not use forced, bonded or indentured labor, involuntary prison labor, or take part in human trafficking or any form of modern slavery. No worker shall pay for a job or be denied freedom of movement.

SAQ & Audit template

The PSCI SAQ & Audit Template collects responses relevant to this issue:
Human Rights section:
  • Question 17: Does the facility or company have a policy(ies) (or statement of commitment) regarding human rights and labor practices? (including for Freely chosen employment, Anti-human trafficking, Labor broker recruitment fees / deposits, Freedom of movement, Recruiting and termination)
  • Question 19: Has the company performed a risk assessment to determine if there are areas of their business risk for forced, bonded, indentured or involuntary prison labor?
  • Question 20: Does the facility or company employ contract and/or migrant workers?
    • If yes, from which countries/provinces:
    • Are contract and/or migrant workers recruited through agencies? If so, who pays for recruitment fees and costs (visas, transport, medical etc)
    • Is transport to their home country included as part of migrant worker contracts?
  • Question 21: Does the facility keep any original documents belonging to employees (e.g., passports or birth certificates) during the term of employment?
  • Question 22: Does the company maintain records of employee contracts that would demonstrate the terms and conditions of employment and termination?

Resources

You may find the following PSCI Resources useful as part of your company’s due diligence process on this issue:
Freedom of Association

Legislative provisions

The following legislative provisions are included:
The main required disclosures related to freedom of association are:
"An explanation of the general approach the undertaking takes to identify and manage any material actual and potential impacts on its own workforce [and in its value chain] in relation to the following social, including human rights, factors or matters: [...] social dialogue, freedom of association, the existence of works councils and the information, consultation and participation rights of workers, collective bargaining, including the rate of the undertaking’s workforce covered by collective agreements."
For detailed requirements, see the Delegated Regulation, ESRS S1-1, S1-4, S1-5, S2

PSCI Principles

The following PSCI Sub-Principles are relevant to this issue:
Human Rights Freedom of association and right to collective bargaining
Open communication and direct engagement with workers (i.e. social dialogue) to resolve workplace and compensation issues are encouraged. Suppliers shall respect the rights of workers, as set forth in local laws, to associate freely, join or not join labor unions, seek representation and join workers’ councils, as well as to bargain collectively. Where the right to freedom of association and collective bargaining is restricted under law, the employer facilitates, and does not hinder, the development of parallel means for independent and free association and bargaining. Workers shall be able to communicate openly with management regarding working conditions without fear of retaliation.

SAQ & Audit template

The PSCI SAQ & Audit Template collects responses relevant to this issue:
Human Rights Section:
  • Question 17: Does the facility or company have a policy(ies) (or statement of commitment) regarding human rights and labor practices? (including for Freedom of association)
  • Question 25: How does the facility or company ensure that there is no harassment and discrimination in hiring, compensation, access to training, promotion, termination or retirement based on race, caste, national origin, religion, age, disability, gender, marital status, pregnancy, sexual orientation, union membership or political affiliation and is a corresponding policy in place?
  • Question 31: What are the mechanisms in place to allow employees and management to collectively express concerns and issues?
Health and Safety Section:
  • Question 51: Does the site engage employees on Safety & Health issues through Unions, Worker Committees or any other worker voice mechanisms?
 

Resources

You may find the following PSCI Resources useful as part of your company’s due diligence process on this issue:
Local Communities

Legislative provisions

The following legislative provisions are included:

The main required disclosures related to the local communities are:

  • Strategy
    • Disclosure Requirement related to ESRS 2 SBM-2 – Interests and views of stakeholders
    • Disclosure Requirement related to ESRS 2 SBM-3 - Material impacts, risks and opportunities and their interaction with strategy and business model
  • Impact, risk and opportunity management
    • Disclosure Requirement S3-1 – Policies related to affected communities
    • Disclosure Requirement S3-2 – Processes for engaging with affected communities about impacts
    • Disclosure Requirement S3-3 – Processes to remediate negative impacts and channels for affected communities to raise concerns
    • Disclosure Requirement S3-4 – Taking action on material impacts on affected communities, and approaches to managing material risks and pursuing material opportunities related to affected communities, and effectiveness of those actions
  • Metrics and targets
    • Disclosure Requirement S3-5 – Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities

This sustainability matter is broad, so please see detailed disclosure requirements in the Delegated Regulation, ESRS S3

PSCI Principles

The following PSCI Sub-Principles are relevant to this issue:
Human Rights Local communities
Suppliers shall respect the rights of the local communities around their sites including the right to a clean and healthy environment.

SQ & Audit Template

Management Systems section:

  • Question 6: Does the facility and/or company have policies and/or practices in place to risk assess their programs and potential impacts on responsible business conduct principles, [including] reputation risks (community impacts, [...]) ?

Resources

You may find the following PSCI Resources useful as part of your company’s due diligence process on this issue:

Non-Discrimination

Legislative provisions

The following legislative provisions are included:
The main required disclosures related to non-discrimination are:
  • "An explanation of the general approach the undertaking takes to identify and manage any material actual and potential impacts on its own workforce [and in its value chain] in relation to the following social, including human rights, factors or matters: [...] equal treatment and opportunities for all, including gender equality and equal pay for gender equality and equal pay for work of equal value; training and skills development; employment and inclusion of persons with disabilities; diversity"
  • "The undertaking shall disclose:
    • Whether it has specific policies aimed at the elimination of discrimination, including [...] promoting equal opportunities and other ways to advance diversity and inclusion;
    • Whether the following grounds for discrimination are specifically covered in the policy: racial and ethnic origin, colour, sex, sexual orientation, gender identity, disability, age, religion, political opinion, national extraction or social origin, or other forms of discrimination covered by Union regulation and national law;
    • Whether the undertaking has specific policy commitments related to inclusion or positive action for people from groups at particular risk of vulnerability in its own workforce and, if so, what these commitments are; and
    • Whether and how these policies are implemented through specific procedures to ensure discrimination is prevented, mitigated and acted upon once detected, as well as to advance diversity and inclusion in general."
  • "The undertaking may disclose whether it:
    • has policies and procedures which make qualifications, skills and experience the basis for the recruitment, placement, training and advancement at all levels, while accounting for the fact that some individuals may have more difficulty than others to acquire such qualifications, skills and experience;
    • assigns responsibility at top management level for equal treatment and opportunities in employment, issue clear company-wide policies and procedures to guide equal employment practices, and link advancement to desired performance in this area;
    • provides staff training on non-discrimination policies and practices, with a particular focus on middle and upper management to raise awareness and address resolution strategies for preventing and addressing systemic and incidental discrimination;
    • makes adjustments to the physical environment to ensure health and safety for workers, customers and other visitors with disabilities;
    • evaluates whether job requirements have been defined in a way that could systematically disadvantage certain groups;
    • keeps up-to-date records on recruitment, training and promotion that provide a transparent view of opportunities for employees and their progression within the undertaking;
    • puts in place grievance procedures to address complaints, handle appeals and provide recourse for employees (especially in the context of negotiations and collective agreements) when discrimination is identified, and is alert to formal structures and informal cultural issues that can prevent employees from raising concerns and grievances; and
    • has programs to promote access to skills development."
  • "The undertaking shall disclose the number of work-related incidents and/or complaints and severe human rights impacts within its own workforce, and any related material fines, sanctions or compensation for the reporting period", including:
    • the total number of incidents of discrimination , including harassment , reported in the reporting period
    • the number of complaints filed through channels for people in the undertaking’s own workforce to raise concerns (including grievance mechanisms) and, where applicable, to the National Contact Points for OECD Multinational Enterprises related to the matters defined in paragraph 2 of this Standard, excluding those already reported above;
    • the total amount of fines, penalties, and compensation for damages as a result of the incidents and complaints disclosed above, and a reconciliation of such monetary amounts disclosed with the most relevant amount presented in the financial statements; and
    • where applicable, contextual information necessary to understand the data and how such data has been compiled.
For detailed requirements, see the Delegated Regulation, ESRS S1-1, S1-17

PSCI Principles

The following PSCI Sub-Principles are relevant to this issue:
Human Rights Non-discrimination
Suppliers shall strive for equality, providing a work environment free from discrimination for reasons such as race, color, age, pregnancy, gender, sexual orientation, ethnicity, disability, religion, political affiliation, union membership or marital status.

SAQ & Audit template

The PSCI SAQ & Audit Template collects responses relevant to this issue:
Human Rights Section:
  • Question 17: Does the facility or company have a policy(ies) (or statement of commitment) regarding human rights and labor practices? (including for Non-discrimination)
  • Question 25: How does the facility or company ensure that there is no harassment and discrimination in hiring, compensation, access to training, promotion, termination or retirement based on race, caste, national origin, religion, age, disability, gender, marital status, pregnancy, sexual orientation, union membership or political affiliation and is the corresponding policy in place?

Resources

You may find the following PSCI Resources useful as part of your company’s due diligence process on this issue:
Payment of Minimum / Living Wage

Legislative provisions

The following legislative provisions are included:
The main required disclosures related to adequate wages are:
  • "An explanation of the general approach the undertaking takes to identify and manage any material actual and potential impacts on its own workforce [and in its value chain] in relation to the following social, including human rights, factors or matters: [...] adequate wages"
  • "The undertaking shall disclose whether or not its employees are paid an adequate wage, and if they are not all paid an adequate wage, the countries and percentage of employees concerned.
  • The undertaking shall disclose whether all its employees are paid an adequate wage , in line with applicable benchmarks. If so, stating this will be sufficient to fulfil this disclosure requirement and no further information is needed.
  • If not all its employees are paid an adequate wage in line with applicable benchmarks, the undertaking shall disclose the countries where employees earn below the applicable adequate wage benchmark and the percentage of employees that earn below the applicable adequate wage benchmark for each of these countries.
  • The undertaking may also disclose the information specified in this disclosure requirement with regard to non-employees in its workforce."
For detailed requirements, see the Delegated Regulation, ESRS S1-1, S1-10, S2

PSCI Principles

The following PSCI Sub-Principles are relevant to this issue:
Human Rights Wages, benefits & working hours
Suppliers shall pay workers according to applicable wage laws and agreed employment contracts, including minimum wages, overtime hours and mandated benefits. Suppliers shall communicate with the worker the basis on which they are being compensated in a timely manner. Overtime work shall be voluntary, as well as consistent with applicable national and international standards. Suppliers are expected to communicate with the worker whether overtime is required and the wages to be paid for such overtime.

SAQ & Audit template

The PSCI SAQ & Audit Template collects responses relevant to this issue:
Human Rights Section:
  • Question 17: Does the facility or company have a policy(ies) (or statement of commitment) regarding human rights and labor practices?
    (List includes wages)
  • Question 26: How does the facility ensure that overtime is voluntary (except for legally defined situations of urgency or emergencies that require the full workforce)? What is the legal max. overtime as per applicable law?
  • Question 27: Do employees have one full day off for every seven-day period on average?
  • Question 28: Does the facility or company ensure that all wages are at or above the legal minimum or industry benchmark standards, whichever is higher (after deduction, not including overtime wages)?
  • Question 29: Are workers paid in a timely manner in line with local laws and regulations?
  • Question 30: Does the facility or company provide housing and/or living expenses as partial or complete payment of wages for any employees?

Resources

You may find the following PSCI Resources useful as part of your company’s due diligence process on this issue:
Water and Sanitation

Legislative provisions

The following legislative provisions are included:

The main required disclosures related to water and sanitation are:

"An explanation of the general approach the undertaking takes to identify and manage any material actual and potential impacts on value chain workers [and on affected communities] in relation to the following social, including human rights, factors or matters: [...] water and sanitation"

For detailed requirements, see the Delegated Regulation, ESRS S2 and S3

PSCI Principles

The following PSCI Sub-Principles are relevant to this issue:
Human Rights Local communities
Suppliers shall respect the rights of the local communities around their sites including the right to a clean and healthy environment.

SAQ & Audit template

The PSCI SAQ & Audit Template collects responses relevant to this issue:
Health & Safety section:
  • Question 54: Are appropriate hygiene practices observed and does the facility ensure the provision of safe, potable drinking water and hygienic facilities to all employees?

Resources

You may find the following PSCI Resources useful as part of your company’s due diligence process on this issue:
Working Time

Legislative provisions

The following legislative provisions are included:
The main required disclosures related to working time are:
  • "An explanation of the general approach the undertaking takes to identify and manage any material actual and potential impacts on its own workforce [and in its value chain] in relation to the following social, including human rights, factors or matters: [...] working time"
  • "An explanation of the general approach the undertaking takes to identify and manage any material actual and potential impacts on its own workforce [and in its value chain] in relation to the following social, including human rights, factors or matters: [...] work-life balance"
  • "The undertaking shall disclose the extent to which employees are entitled to and make use of family-related leave", i.e. maternity leave, paternity leave, parental leave, and carers’ leave. In particular:
    • the percentage of employees entitled to take family-related leave
    • the percentage of entitled employees that took family-related leave, and a breakdown by gender
For detailed requirements, see the Delegated Regulation, ESRS S1, S1-1, S1-4, S1-5, S1-15, S2

PSCI Principles

The following PSCI Sub-Principles are relevant to this issue:
Human Rights Wages, benefits & working hours
Suppliers shall pay workers according to applicable wage laws and agreed employment contracts, including minimum wages, overtime hours and mandated benefits. Suppliers shall communicate with the worker the basis on which they are being compensated in a timely manner. Overtime work shall be voluntary, as well as consistent with applicable national and international standards. Suppliers are expected to communicate with the worker whether overtime is required and the wages to be paid for such overtime.

SAQ & Audit template

The PSCI SAQ & Audit Template collects responses relevant to this issue:
Human Rights Section:
  • Question 17: Does the facility or company have a policy(ies) (or statement of commitment) regarding human rights and labor practices?
    (List includes Wages, Benefits, Standard working hours, Overtime, Vacation, Maternity / paternity leave, leave due to short-term sickness, leave due to long-term sickness, accident / medical emergency at work)
  • Question 26: How does the facility ensure that overtime is voluntary (except for legally defined situations of urgency or emergencies that require the full workforce)?
    • What is the legal max. overtime as per applicable law? (Per day / Per week / Per month / How is overtime recorded? / How is overtime compensated? /
  • Question 27: Do employees have one full day off for every seven-day period on average?
  • Question 28: Does the facility or company ensure that all wages are at or above the legal minimum or industry benchmark standards, whichever is higher (after deduction, not including overtime wages)? (Provide: Lowest wage paid / Legal minimum wage)
  • Question 29: Are workers paid in a timely manner in line with local laws and regulations? What is the frequency of workers payment (monthly, weekly, daily…)

Resources

You may find the following PSCI Resources useful as part of your company’s due diligence process on this issue:
Health & Safety

Legislative provisions

The following legislative provisions are included:
The main required disclosures related to health and safety are:
  • "An explanation of the general approach the undertaking takes to identify and manage any material actual and potential impacts on its own workforce [and in its value chain] in relation to the following social, including human rights, factors or matters: [...] health and safety"
  • "The undertaking shall disclose information on the extent to which its own workforce is covered by its health and safety management system and the number of incidents associated with work-related injuries, ill health and fatalities of its own workforce. In addition, it shall disclose the number of fatalities as a result of work-related injuries and work-related ill health of other workers working on the undertaking’s sites." More specifically:
    • "the percentage of people in its own workforce who are covered by the undertaking’s health and safety management system based on legal requirements and/or recognised standards or guidelines;
    • the number of fatalities as a result of work-related injuries and work-related ill health [including for other workers working on the undertaking’s sites , such as value chain workers if they are working on the undertaking’s sites]
    • the number and rate of recordable work-related accidents;
    • with regard to the undertaking’s employees, the number of cases of recordable work-related ill health , subject to legal restrictions on the collection of data; and
    • with regard to the undertaking’s employees, the number of days lost to work-related injuries and fatalities from work-related accidents, work-related ill health and fatalities from ill health"
  • "The undertaking may disclose [...] whether it makes adjustments to the physical environment to ensure health and safety for workers, customers and other visitors with disabilities"
  • "The undertaking shall consider how it engages with people in its workforce and workers’ representatives on the impacts on its own workforce that may arise from reducing carbon emissions and transitioning to greener and climate-neutral operations, in particular [...] health and safety."
For detailed requirements, see the Delegated Regulation, ESRS S1-14, S2

PSCI Principles

The following PSCI Sub-Principles are relevant to this issue:
Health & Safety Process safety
Suppliers shall have management processes in place to identify the risks from chemical and biological processes and to prevent or respond to catastrophic release of chemical or biological agents.
Health & Safety Safety of the work environment
Adequate risk assessments and emergency plans shall be in place to ensure the safety of the work environment. Safety information relating to hazardous materials – including pharmaceutical compounds and pharmaceutical intermediate materials – shall be available and used to educate, train, and protect workers from hazards. Suppliers shall demonstrate good housekeeping practice and a culture of safety.
Health & Safety Worker protection, health and wellbeing
Suppliers shall protect workers from over exposure to chemical, biological, physical hazards. Appropriate equipment, facilities and services shall be provided to support worker safety, health, and wellbeing.
Governanace & Management Systems Emergency prepardness & response
Suppliers shall have effective emergency plans and response procedures.

SAQ & Audit template

The PSCI SAQ & Audit Template collects responses relevant to this issue:

Health and Safety Section – Questions 48 - 106

To access the PSCI's library of health & safety-related resources, please click here and search using specific keywords. Too many resources are available to be published on this page.

No Resources

There are currently no PSCI resources on this topic.

Biodiversity and Ecosystems

Legislative provisions

The following legislative provisions are included:
The main required disclosures related to biodiversity and ecosystems management are:
  • Strategy
    • Disclosure Requirement E4-1 – Transition plan and consideration of biodiversity and ecosystems in strategy and business model
    • Disclosure Requirement related to ESRS 2 SBM-3 – Material impacts, risks and opportunities and their interaction with strategy and business model
  • Impact, risk and opportunity management
    • Disclosure Requirement related to ESRS 2 IRO-1 – Description of processes to identify and assess material biodiversity and ecosystem-related impacts, risks and opportunities
    • Disclosure Requirement E4-2 – Policies related to biodiversity and ecosystems
    • Disclosure Requirement E4-3 – Actions and resources related to biodiversity and ecosystems
  • Metrics and targets
    • Disclosure Requirement E4-4 – Targets related to biodiversity and ecosystems
    • Disclosure Requirement E4-5 – Impact metrics related to biodiversity and ecosystems change
    • Disclosure Requirement E4-6 – Anticipated financial effects from biodiversity and ecosystem-related risks and opportunities
For detailed requirements, see the Delegated Regulation, ESRS E4

PSCI Principles

The following PSCI Sub-Principles are relevant to this issue:
Environment Biodiversity Conservation

Suppliers shall understand their impacts on biodiversity, reducing and mitigating their footprint wherever possible.

Resources

You may find the following PSCI Resources useful as part of your company’s due diligence process on this issue:

Circular Economy

Legislative provisions

The following legislative provisions are included:
The main required disclosures related to circular economy management are:
  • Impact, risk and opportunity management
    • Disclosure Requirement related to ESRS 2 IRO-1 – Description of the processes to identify and assess material resource use and circular economy-related impacts, risks and opportunities
    • Disclosure Requirement E5-1 – Policies related to resource use and circular economy
    • Disclosure Requirement E5-2 – Actions and resources related to resource use and circular economy
  • Metrics and targets
    • Disclosure Requirement E5-3 – Targets related to resource use and circular economy
    • Disclosure Requirement E5-4 – Resource inflows
    • Disclosure Requirement E5-5 – Resource outflows
    • Disclosure Requirement E5-6 – Anticipated financial effects from resource use and circular economy-related impacts, risks and opportunities
For detailed requirements, see the Delegated Regulation, ESRS E5

PSCI Principles

The following PSCI Sub-Principles are relevant to this issue:
Environment Resource efficiency

Suppliers shall strive for circularity, designing out waste, taking measures to improve efficiency and reduce the consumption of resources, including water, favoring renewable and sustainable sources. They shall also take measures to reuse and recycle.

Resources

You may find the following PSCI Resources useful as part of your company’s due diligence process on this issue:

Climate Change

Legislative provisions

The following legislative provisions are included:
The main required disclosures related to climate change are:
  • Governance
    • Disclosure requirement related to ESRS 2 GOV-3 – Integration of sustainability-related performance in incentive schemes
  • Strategy
    • Disclosure Requirement E1-1 – Transition plan for climate change mitigation
    • Disclosure Requirement related to ESRS 2 SBM-3 – Material impacts, risks and opportunities and their interaction with strategy and business model
  • Impact, risk and opportunity management
    • Disclosure requirement related to ESRS 2 IRO-1 – Description of the processes to identify and assess material climate-related impacts, risks and opportunities
    • Disclosure Requirement E1-2 – Policies related to climate change mitigation and adaptation
    • Disclosure Requirement E1-3 – Actions and resources in relation to climate change policies
  • Metrics and targets
    • Disclosure Requirement E1-4 – Targets related to climate change mitigation and adaptation
    • Disclosure Requirement E1-5 – Energy consumption and mix
    • Disclosure Requirement E1-6 – Gross Scopes 1, 2, 3 and Total GHG emissions
    • Disclosure Requirement E1-7 – GHG removals and GHG mitigation projects financed through carbon credits
    • Disclosure Requirement E1-8 – Internal carbon pricing
    • Disclosure Requirement E1-9 – Anticipated financial effects from material physical and transition risks and potential climate-related opportunities
For detailed requirements, see the Delegated Regulation, ESRS E1

PSCI Principles

The following PSCI Sub-Principles are relevant to this issue:
Environment Climate change
Suppliers shall monitor and reduce their GHG emissions and support their suppliers to do the same.

SAQ & Audit template

The PSCI SAQ & Audit Template collects responses relevant to this issue:
Environment Section:
  • Question 33: Does the facility have documented environmental objectives or goals for performance improvement, including metrics and targets, [on greenhouse gas emissions]?
  • Question 41: Indicate which of the following types of air emissions are generated at the facility, and describe the types of pollution control activities if used: [...] Ozone depleting substances, [...] Other Pollutants (e.g., GHG, cyanides, sulfides, ammonias, bromines, phosgene)

Resources

You may find the following PSCI Resources useful as part of your company’s due diligence process on this issue:

Pollution

Legislative provisions

The following legislative provisions are included:
The main required disclosures related to pollution management are:
  • Impact, risk and opportunity management
    • Disclosure Requirement related to ESRS 2 IRO-1 – Description of the processes to identify and assess material pollution-related impacts, risks and opportunities
    • Disclosure Requirement E2-1 – Policies related to pollution
    • Disclosure Requirement E2-2 – Actions and resources related to pollution
  • Metrics and targets
    • Disclosure Requirement E2-3 – Targets related to pollution
    • Disclosure Requirement E2-4 – Pollution of air, water and soil
    • Disclosure Requirement E2-5 – Substances of concern and substances of very high concern
    • Disclosure Requirement E2-6 - Anticipated financial effects from pollution-related impacts, risks, and opportunities
For detailed requirements, see the Delegated Regulation, ESRS E2

PSCI Principles

The following PSCI Sub-Principles are relevant to this issue:
Environment Environmental authorizations & reporting

Suppliers shall comply with all applicable environmental regulations. All required environmental permits, licenses, information registrations and restrictions shall be obtained, and their operational and reporting requirements followed.

Environment Waste & emissions

Suppliers shall have systems in place to ensure the safe handling, movement, storage, disposal, recycling, reuse, or management of waste, air emissions and wastewater discharges. Any waste, wastewater or emissions with the potential to adversely impact human or environmental health shall be appropriately managed, controlled and treated prior to release into the environment. This includes managing releases of active pharmaceuticals into the environment (PiE).

Environment Spills & releases

Suppliers shall have systems in place to prevent and mitigate accidental spills and releases to the environment and adverse impacts on the local community.

SAQ & Audit template

The PSCI SAQ & Audit Template collects responses relevant to this issue:
Environment Section:
  • Question 32: Does the facility have written environmental policy, procedures, and practices? If yes, please provide a copy of the policy and list of the procedure titles.
  • Question 33: Does the facility have documented environmental objectives or goals for performance improvement, including metrics and targets? If yes, please describe goals, metrics, and/or targets and any improvements made in last 3 years.
    • Do you track and have reduction programs in place for the following: [...] Amount of hazardous waste, Amount of non-hazardous waste [...] ?
    • Does the facility publicly report data: If yes, where can the information be found? If no, please add comments
  • Question 38: Does the facility have a process to select and manage third-party waste treatment and disposal facilities and service providers?
  • Question 39: Does the facility use any of the following waste disposal methods & locations [incineration, landfill, deep well, land application, other reuse & recycling]? Include explanation of how hazardous, including API containing waste (e.g. antibiotics), biohazardous, fermentation biomass, sludge/biosolids from waste water, non-hazardous waste etc. is disposed of.
  • Question 40: Indicate which methods are used to manage process wastewater from this facility.
  • Question 41: Indicate which of the following types of air emissions are generated at the facility and describe the types of pollution control activities if used:
    • Volatile organic chemicals
    • Corrosive vapors (e.g. acid, caustic)
    • Particulates or dusts
    • Ozone depleting substances
    • Combustion by-products
    • Other Pollutants (e.g., GHG, cyanides, sulfides, ammonias, bromines, phosgene)
  • Question 42: Has the facility developed and implemented a hazardous chemicals (including APIs) management program that includes development and maintenance of a current inventory of all hazardous chemicals (including APIs) used, manufactured or stored on-site, including those for production, maintenance, utilities, and laboratory purposes?
  • Question 43: Has the facility established good storm water management practices?
  • Question 44: Does the facility transport any hazardous materials that are subject to a regulatory authority that specifies transportation requirements?
  • Question 45: Does the facility or immediate surroundings external to the site have any known soil, surface water or groundwater contamination?
  • Question 46: Has the facility addressed potential environmental risks arising from storing and handling hazardous substances, including petroleum products as APIs
  • Question 47: Are tank truck, railcar, and other bulk transportation unit loading and unloading areas for hazardous substances provided with containment equivalent to at least 110% of the largest transportation unit handled in that area, or for compartmentalized transportation units, equivalent to at least 110% of the single largest compartment?

Resources

You may find the following PSCI Resources useful as part of your company’s due diligence process on this issue:

Material Risk Management

Legislative provisions

The following legislative provisions are included:
  • The law specifies the "information that an undertaking shall disclose about its material impacts, risks and opportunities in relation to environmental, social, and governance sustainability matters". It does not "require undertakings to disclose any information on environmental, social and governance topics covered by ESRS when the undertaking has assessed the topic in question as non-material (see Appendix E of the Delegated Regulation: “Flowchart for determining disclosures under ESRS”). The information disclosed in accordance with ESRS enables users of the sustainability statement to understand the undertaking’s material impacts on people and environment and the material effects of sustainability matters on the undertaking’s development, performance and position."
  • "The undertaking shall report on sustainability matters based on the double materiality principle [...]. Materiality assessment is the starting point for sustainability reporting under ESRS. [Some] general disclosure requirements about the undertaking’s process [are included,] to identify impacts, risks and opportunities and assess their materiality. [Are also provided] general disclosure requirements on the material impacts, risks and opportunities resulting from the undertaking’s materiality assessment."
  • "Performing a materiality assessment [...] is necessary for the undertaking to identify the material impacts, risks and opportunities to be reported."
  • "When disclosing information on policies, actions and targets in relation to a sustainability matter that has been assessed to be material, the undertaking shall include the information prescribed by all the Disclosure Requirements and datapoints in the topical and sector-specific ESRS related to that matter and in the corresponding Minimum Disclosure Requirement on policies, actions, and targets required under ESRS 2. If the undertaking cannot disclose the information prescribed by either the Disclosure Requirements and datapoints in the topical or sector-specific ESRS, or the Minimum Disclosure Requirements in ESRS 2 on policies, actions and targets, because it has not adopted the respective policies, implemented the respective actions or set the respective targets, it shall disclose this to be the case and it may report a timeframe in which it aims to have these in place."
  • "If the undertaking omits the information prescribed by a datapoint that derives from other EU legislation listed in Appendix B of ESRS 2, it shall explicitly state that the information in question is “not material”.
  • "The undertaking shall establish how it applies criteria, including appropriate thresholds, to determine: (a) the information it discloses on metrics for a material sustainability matter according to the Metrics and Targets section of the relevant topical ESRS, in accordance with paragraph 34; and (b) the information to be disclosed as entity-specific disclosures."

For further information detailing how to conduct a double materiality assessment, see the Delegated Regulation, ESRS S1

PSCI Principles

The following PSCI Sub-Principles are relevant to this issue:
Governance & Management Systems Risk Management
Suppliers shall have mechanisms to determine and manage risks in all areas addressed by these Principles. Suppliers shall have a management of change process in place to evaluate and control the risk of change.

SAQ & Audit template

The PSCI SAQ & Audit Template collects responses relevant to this issue:
Management Systems Section:
  • Question 6: Does the facility and/or company have policies and/or practices in place to risk assess their programs and potential impacts on responsible business conduct principles?

Resources

You may find the following PSCI Resources useful as part of your company’s due diligence process on this issue:
Concerns Identification and Investigation

Legislative provisions

The following legislative provisions are included:

The main required disclosures related to the identification of concerns and their remediation are

  • "a description of the mechanisms for identifying, reporting and investigating concerns about unlawful behaviour or behaviour in contradiction of its code of conduct or similar internal rules; and whether it accommodates reporting from internal and/or external stakeholders
  • how the undertaking protects whistleblowers, including:
    • details on the establishment of internal whistleblower reporting channels, including whether the undertaking provides for information and training to its own workers and information about the designation and training of staff receiving reports; and
    • measures to protect against retaliation its own workers who are whistleblowers in accordance with the applicable law transposing Directive (EU) 2019/1937 of the European Parliament and of the Council (128);
    • where the undertaking has no policies on the protection of whistle-blowers (129), it shall state this and whether it has plans to implement them and the timetable for implementation;
    • beyond the procedures to follow-up on reports by whistleblowers in accordance with the applicable law transposing Directive (EU) 2019/1937, whether the undertaking has procedures to investigate business conduct incidents, including incidents of corruption and bribery, promptly, independently and objectively"

For detailed requirements, see the Delegated Regulation, ESRS G1-1

PSCI Principles

The following PSCI Sub-Principles are relevant to this issue:
Governance & Management Systems Grievance mechanisms
Suppliers shall establish grievance mechanisms accessible to internal and external stakeholders who shall be encouraged to use them to report concerns, illegal activities or breaches of these Principles at work without threat of or actual reprisal, intimidation or harassment.
Governance & Management Systems Response and remediation
Suppliers shall properly investigate incidents or concerns relating to these Principles, take necessary corrective actions, and provide remediation where required.

SAQ & Audit template

The PSCI SAQ & Audit Template collects responses relevant to this issue:
Management Systems Section:
  • Question 11: Does the facility or company have formal processes and procedures [...] to identify and implement corrective actions and/or recommendations, and to track corrective actions?
  • Question 12: Does the company have an incident management and reporting system established, covering for example certain types of incidents, reporting lines, consequences and corrective actions required? Does the site apply a systematic root cause investigation process to ensure that true causes are identified? Are corrective actions identified for the incident(s) and are they tracked to implementation and closure?

No Resources

There are currently no PSCI resources on this topic.
General Disclosures

Legislative provisions

The following legislative provisions are included:
General disclosures required are:
  • Basis for preparation
    • Disclosure Requirement BP-1 – General basis for preparation of sustainability statements
    • Disclosure Requirement BP-2 – Disclosures in relation to specific circumstances
  • Governance
    • Disclosure Requirement GOV-1 – The role of the administrative, management and supervisory bodies
    • Disclosure Requirement GOV-2 – Information provided to and sustainability matters addressed by the undertaking’s administrative, management and supervisory bodies
    • Disclosure Requirement GOV-3 - Integration of sustainability-related performance in incentive schemes
    • Disclosure Requirement GOV-4 - Statement on due diligence
    • Disclosure Requirement GOV-5 - Risk management and internal controls over sustainability reporting
  • Strategy
    • Disclosure Requirement SBM-1 – Strategy, business model and value chain
    • Disclosure Requirement SBM-2 – Interests and views of stakeholders
    • Disclosure Requirement SBM-3 - Material impacts, risks and opportunities and their interaction with strategy and business model
  • Impact, risk and opportunity management: (1) Disclosures on the materiality assessment process
    • Disclosure Requirement IRO-1 - Description of the processes to identify and assess material impacts, risks and opportunities
    • Disclosure Requirement IRO-2 – Disclosure requirements in ESRS covered by the undertaking’s sustainability statement
  • Impact, risk and opportunity management: (2) Minimum disclosure requirement on policies and actions
    • Minimum disclosure requirement - Policies MDR-P – Policies adopted to manage material sustainability matters
    • Minimum disclosure requirement - Actions MDR-A – Actions and resources in relation to material sustainability matters
  • Metrics and targets
    • Minimum disclosure requirement – Metrics MDR-M – Metrics in relation to material sustainability matters
    • Minimum disclosure requirement – Targets MDR-T – Tracking effectiveness of policies and actions through targets
For detailed requirements, see the Delegated Regulation, ESRS 2

PSCI Principles

The following PSCI Sub-Principles are relevant to this issue:
Governance & Management Systems Legal & customer requirments
Suppliers shall identify and comply with applicable laws, regulations, recognized standards, and relevant customer requirements.

No Resources

There are currently no PSCI resources on this topic.
Management of Relationships with Suppliers

Legislative provisions

The following legislative provisions are included:
The main required disclosures related to the management of relationships with suppliers are:
  • The undertaking shall provide information about the management of its relationships with its suppliers and its impacts on its supply chain, including:
    • the undertaking’s approach to its relationships with its suppliers, taking account of risks to the undertaking related to its supply chain and of impacts on sustainability matters
    • whether and how it takes into account social and environmental criteria for the selection of its suppliers
  • The undertaking shall provide a description of its policy to prevent late payments, specifically to small and medium enterprises (SMEs), as well as information on its payment practices, especially with respect to late payments to SMEs, including:
    • the average time the undertaking takes to pay an invoice from the date when the contractual or statutory term of payment starts to be calculated, in number of days;
    • a description of the undertaking’s standard payment terms in number of days by main category of suppliers and the percentage of its payments aligned with these standard terms;
    • the number of legal proceedings currently outstanding for late payments; and
    • complementary information necessary to provide sufficient context. If the undertaking has used representative sampling to calculate the information required under point (a), it shall state that fact and briefly describe the methodology used
For detailed requirements, see the Delegated Regulation, ESRS G1-2, G1-6

PSCI Principles

The following PSCI Sub-Principles are relevant to this issue:
Governance & Management Systems Legal & customer requirements
Suppliers shall identify and comply with applicable laws, regulations, recognized standards, and relevant customer requirements.

SAQ & Audit template

The PSCI SAQ & Audit Template collects responses relevant to this issue:
Management Systems section:
  • Question 5: Does the facility practice sustainable sourcing i.e. have processes in place to enforce responsible business practices, aligned with the PSCI Principles, with their suppliers, contractors and sub-contractors i.e. Labor, Ethics, Environment, Health & Safety?
    • Does the facility have a process to evaluate the risks of sourcing from conflict regions and civil war zones?
    • Does the facility assess suppliers for ethical behavior and reputation risk (include HSE) prior to selection and engagement?
    • Is there a process in place to screen business partners against international sanctions lists?
    • Are responsible business expectations clearly communicated to the supplier and reinforced on a regular basis?
    • Is there a purchasing policy that ensures only approved suppliers are used?
    • Are suppliers measured against the responsible business practice expectations? By on-site assessment or audit / By desk-top assessment (e.g. questionnaires, supplier self compliance statement)

No Resources

There are currently no PSCI resources on this topic.
Adequate Housing

Legislative provisions

The following legislative provisions are included:

The main required disclosures related to adequate housing are:

"An explanation of the general approach the undertaking takes to identify and manage any material actual and potential impacts on its own workforce [, in its value chain, and on affected communities] in relation to the following social, including human rights, factors or matters: [...] adequate housing"

For detailed requirements, see the Delegated Regulation, ESRS S1, S2, and S3

Resources

There are currently no PSCI resources on this topic.
Political Influence and Lobbying Activities

Legislative provisions

The following legislative provisions are included:
The main required disclosures related to political influence and lobbying activities are "information on the activities and commitments related to exerting its political influence, including its lobbying activities related to its material impacts, risks and opportunities", and in particular:
  • "if applicable, the representative(s) responsible in the administrative, management and supervisory bodies for the oversight of these activities;
  • for financial or in-kind political contributions: i. the total monetary value of financial and in-kind political contributions made, directly and indirectly by the undertaking aggregated by country or geographical area where relevant, as well as type of recipient/beneficiary; and ii. where appropriate, how the monetary value of in-kind contributions is estimated;
  • the main topics covered by its lobbying activities and the undertaking’s main positions on these in brief. This shall include explanations on how this interacts with its material impacts, risks and opportunities identified in its materiality assessment per ESRS 2;
  • if the undertaking is registered in the EU Transparency Register or in an equivalent transparency register in a Member State, the name of any such register and its identification number in the register"
For detailed requirements, see the Delegated Regulation, ESRS G1-5

Resources

There are currently no PSCI resources on this topic.
Companies in Scope
Companies are required to report the outlined sustainability disclosures if they (scope narrowed down by EU Omnibus in Feb 2026):
  1. Are EU entities with: (i) net turnover exceeding €450 million, and (ii) average number of employees during the financial year exceeding 1,000.
  2. Are non-EU entities with their ultimate parent entities (i) generating €450 million net turnover within the EU for the last two consecutive financial years and (ii) have an EU subsidiary or branch that has net turnover exceeding €200 million.
Business Requirements
Companies are required to:
  • Consider how sustainability is integrated into their business.
  • Establish how material ESG impacts, risks and opportunities are recognized and managed.
  • Carry out a ‘double materiality’ assessment, taking into consideration short-, medium- and long-term time horizons and contain information about their value chain. Considering both (i) the impacts of their activities on people and the environment, and (ii) how various sustainability matters affect the company. For more information about double materiality assessments, see the 'Material risk assessment' topic on the left-hand side.
Reporting Requirements
Companies must report the impact which their business has on sustainability matters, and the impact of sustainability matters on their business, following the findings from their double materiality assessment and the European Sustainability Reporting Standards (ESRS) framework. They also have to disclose information related to their activities and value chain.
The ESRS specify the information that a company shall disclose about its material impacts, risks, and opportunities in relation to environmental, social, and governance sustainability matters. ESRS do not require companies to disclose any information on environmental, social, and governance topics covered by ESRS when it has assessed the topic in question as non-material during its double materiality assessment.
The ESRS are as follows:
  • Cross-cutting:
    • General Requirements (how to disclose)
    • General Disclosures (the only universally mandated element for all reporting companies)
  • Environmental:
    • Climate Change: Policies related to climate change mitigation and adaptation; actions and resources in relation to climate change policies; energy consumption and mix; gross scopes 1, 2, and 3 and total GHG emissions, GHG removals and GHG mitigation projects; internal carbon pricing; etc.
    • Pollution: Policies related to pollution; pollution of air, water, and soil; substances of concern; potential financial effects from pollution-related impacts; etc.
    • Water and marine resources: Policies related to water and marine resources, water consumption; etc.
    • Biodiversity and ecosystems: Policies, targets, actions, and resources related to biodiversity and ecosystems; etc.
    • Resource use and the circular economy: Targets related to resource use (inflows and outflows); waste; impact, risk, and opportunity management; etc.
  • Social and human rights:
    • Own workforce: Remuneration; social security; working hours; health and safety; sanitation; training and development; diversity; etc.
    • Workers in the value chain: Working conditions; equal opportunities/non-discrimination; forced labor; child labor; adequate housing; etc.
    • Affected communities: Economic, social, and cultural rights; civil and political rights; particular rights of indigenous communities; etc.
    • Consumers and end users: Privacy; freedom of expression; responsible marketing practices; etc.
  • Governance:
    • Business conduct: Corporate culture and business conduct policies; management of relationships with suppliers; prevention and detection of corruption or bribery; political influence and lobbying activities; etc.
Additional, sector-specific guidelines that illustrate and facilitate the application of ESRS within a given sector will be provided by the European Commission.
More generally, here is the information which companies must provide:
  • Their business model and strategy, including the resilience of their business model and strategy in relations of risks related to sustainability matters, opportunities related to those matters, their plans for ensuring that their business model and strategy are compatible with the Paris Agreement, how their business model and strategy take into account their stakeholders' interests, how their strategy has been implemented in relation to sustainability matters
  • The targets they have adopted in relation to sustainability matters
  • The role of the administrative, management and supervisory bodies with regard to sustainability matters, and of their expertise and skills in relation to fulfilling that role or the access such bodies have to such expertise and skills
  • Their policies in relation to sustainability matters
  • Information about the existence of incentive schemes linked to sustainability matters which are offered to members of the administrative, management and supervisory bodies
  • The due diligence process implemented with regard to sustainability matters; the principal actual or potential adverse impacts connected with the company's own operations and with its value chain, including its products and services, its business relationships and its supply chain, actions taken to identify and monitor those impacts, and other adverse impacts which the company is required to identify pursuant to other EU requirements on companies to conduct a due diligence process; any actions taken by the company to prevent, mitigate, remediate or bring an end to actual or potential adverse impacts, and the result of such actions
  • The principal risks to the company related to sustainability matters, including a description of its principal dependencies on those matters, and how it manages those risks
  • Indicators relevant to the disclosures above
Penalties/ Non-compliance/ Enforcement & Sanctions
Responsibility
The CRSD notes that companies have a ‘collective responsibility’ to ensure that sustainability information is prepared and published in accordance with CSRD requirements.
 
Enforcement
EU Member States may provide penalties for infringements of implementing national provisions of the CSRD, but the CSRD does not state this as a requirement for breaches. The maximum limit of pecuniary penalties is 3 % of the net worldwide turnover of the company, or 3 % of the net consolidated worldwide turnover calculated at the level of the ultimate parent company, in the financial year preceding that of the decision to impose the fine.