ESRS E1 Climate Change Reporting Requirements Explained

ESRS E1 is the most-scrutinised standard in CSRD — it covers climate change and carries the only mandatory disclosure that applies regardless of materiality. If your CSRD report is in scope, your auditors will spend more time on E1 than on any other topic.

What is ESRS E1?

ESRS E1 is one of the twelve topic-specific European Sustainability Reporting Standards. It covers climate change and is part of the Environmental pillar (E) of the ESRS framework. It sits alongside E2 (Pollution), E3 (Water and Marine Resources), E4 (Biodiversity) and E5 (Resource Use and Circular Economy).

ESRS E1 is built around the double materiality principle — companies must assess both the financial materiality of climate risks and opportunities to their business, and the impact materiality of their operations on the climate. This dual lens is what distinguishes CSRD from purely financial climate disclosures like TCFD.

The 9 ESRS E1 disclosure requirements

ESRS E1 is structured around a strategy–targets–metrics progression. Here are all nine disclosure requirements:

E1-1: Transition plan (mandatory)

The transition plan is the only E1 disclosure that applies to every CSRD company, regardless of your double materiality assessment outcome. It must describe how your business model and strategy are compatible with limiting global warming to 1.5°C and achieving the EU's 2050 climate neutrality goal.

The transition plan must cover: the decarbonisation levers you will use (fuel switching, electrification, efficiency improvements, carbon capture); any CapEx associated with the transition; how climate targets link to executive remuneration; and the extent to which you depend on carbon credits to meet your targets (and the quality of those credits).

E1-6: GHG emissions — the centrepiece metric

For manufacturers, E1-6 is the most data-intensive disclosure. It requires disclosure of:

• Gross Scope 1 emissions: Direct emissions from your facilities, vehicles, and production processes.
• Gross Scope 2 emissions: Indirect emissions from purchased electricity, heat, and steam — both market-based and location-based figures must be disclosed.
• Gross Scope 3 emissions: Disaggregated by material category. For manufacturers, the typically material categories are Category 1 (purchased goods), Category 2 (capital goods), Category 4 (upstream transport), Category 11 (use of sold products), and Category 12 (end-of-life).
• Total GHG emissions (Scopes 1+2+3).
• GHG intensity per net revenue (tCO₂e/€ net revenue).

All figures must follow the GHG Protocol Corporate Standard or an equivalent methodology. The base year for comparatives must be disclosed and justified.

E1-4: Targets

If you have climate targets, you must disclose them under E1-4. Required datapoints per target include: base year; target year; covered Scopes; percentage reduction; whether the target is science-based (and whether it has received SBTi validation); and your pathway toward the target.

ESRS E1 does not mandate that targets be science-based, but it does require you to disclose whether they are or are not. Given the reputational and investor scrutiny on climate commitments, most large manufacturers are pursuing SBTi validation rather than company-defined targets.

E1-9: Financial effects of climate risks

E1-9 is often underestimated. It requires quantification of the potential financial effects of physical and transition climate risks — the risks of physical damage (flooding, heat stress, water scarcity) to your assets, and the risks of transition (carbon pricing, regulation, technology disruption, shifting demand) to your revenues and cost base.

The quantification requirement makes this one of the most challenging datapoints for first-time reporters. Companies are expected to provide monetary estimates of potential impact ranges, not just qualitative risk descriptions.

How manufacturers should prepare their E1 chapter

The most common failure point for manufacturer E1 chapters is treating CSRD as a disclosure exercise rather than a data collection exercise. The data required for E1 — GHG inventories, energy consumption breakdowns, asset-level risk assessments, capex linked to transition — needs to be built into your management systems well before the reporting year ends.

Practically, preparation involves three work-streams running in parallel: GHG data collection and verification (12-month process for first-time Scope 3 reporters), climate risk scenario analysis (typically 6–8 weeks with an external facilitator), and governance documentation (board minutes, committee terms of reference, remuneration policy).