ESRS E1: Climate change reporting according to EU standards

1. April 2026 | Author: Emily Heinig | Reading time: 3

The ESRS E1 “Climate Change” discloses how companies must report on their greenhouse gas emissions, energy consumption, and related risks, opportunities, and control measures. Whether and to what extent this information is provided depends, as with all topic-specific ESRS, on the materiality analysis. In practice, climate change is considered material for most companies because almost every business activity consumes emissions and energy. If a company nevertheless classifies it as non-material, it must provide a detailed and transparent justification for this decision. The Omnibus Regulation introduces specific simplifications in this regard, such as making a detailed climate transition plan no longer mandatory, but only required if such a plan actually exists.

The reporting requirements according to ESRS E1 “Climate Change” in detail

E1-1 – Transitional Plan for Climate Protection

Companies are expected to demonstrate how they are aligning their business models to contribute to the goal of the Paris Agreement – namely, limiting global warming to a maximum of 1.5°C by 2050. This refers to a long-term decarbonization pathway that is consistent with scientifically sound recommendations.

Current status of the transition plan (bus regulation)

ESRS E1 still requires reporting on transition plans towards a carbon-neutral economy. However, due to the omnibus amendment, the transition plan is no longer a mandatory, standalone document. Companies only need to report on this plan if such a plan actually exists or is being developed. Therefore, there is no obligation to create a new transition plan solely for ESRS purposes.

However, the following remains unchanged: climate strategy, targets, and emissions reduction pathways must be disclosed if they have a significant impact on climate. In practice, this means that many companies are still expected to describe their transformation logic in a comprehensible way, just without the formal requirement of a standardized “transition plan.”

E1-2 – Strategies for climate protection and adaptation to climate change

Companies must outline their corporate strategies for managing significant climate-related impacts, risks, and opportunities – both with regard to climate protection and adaptation to climate change. This includes a description of how administrative, management, and supervisory bodies are involved in these strategic decisions. Furthermore, the strategy must explain whether and how it contributes to the following topics:

• climate protection
• Adapting to climate change
• Increased energy efficiency
• Use of renewable energies as well as
• further climate-relevant areas of action.

ESRS E1-3 – Climate-related measures and resources

Companies must describe their key climate measures in detail – that is, which projects and programs they are planning or have already implemented to reduce greenhouse gas emissions and energy consumption (e.g., efficiency measures, switching to renewable energies, process or product adjustments). Furthermore, they must disclose what financial resources, investments, and human resources are being allocated for this purpose, how these measures are prioritized, and within what timeframe they are expected to contribute to achieving climate targets.

ESRS E1-4 – Energy consumption and energy mix

Companies must disclose their total energy consumption. This includes both direct consumption (e.g., fuels used in their own operations) and purchased energy (e.g., electricity, heat, cooling). This must be broken down by energy source, particularly fossil fuels and renewable energy sources. Furthermore, the share of renewable energy in total consumption must be presented. The aim is to make the energy intensity of the business model, the current energy mix, and the progress made in decarbonizing energy procurement transparent.

ESRS E1-5 – Greenhouse gas emissions Scope 1 and Scope 2

Direct emissions (Scope 1) and indirect emissions from purchased energy (Scope 2) must be disclosed, including the accounting methods used and their development over time. Learn more about Scope 1, 2, and 3 emissions here.

ESRS E1-6 – Greenhouse gas emissions Scope 3

Companies must identify and disclose the significant upstream and downstream emissions of their entire value chain ( Scope 3), e.g., from purchased goods and services, transport and distribution, use and disposal of their own products, business travel, or employee commuting. These emissions must be categorized according to the standard Scope 3 categories and quantified using a methodologically sound approach, where relevant.

Current status (omnibus rule):
Scope 3 emissions with a significant climate impact remain subject to reporting requirements in principle, but with transitional periods and simplifications: In the start-up phase, increased use of estimates, secondary data and simplified methods is accepted, and the requirements for completeness and level of detail are gradually increased.

ESRS E1-7 – Greenhouse gas removals and emission intensity

Companies report on CO₂ removals (e.g., through sinks or technical solutions) and disclose emission intensities, such as emissions per revenue or production unit, to make decarbonization relative to business activity transparent.

ESRS E1-8 – Physical and Transitory Climate Risks

This section highlights which physical climate risks (e.g. extreme weather) and transition risks (e.g. CO₂ pricing, technological upheavals) affect the company and what financial and operational impacts may result.

ESRS E1-9 – Use of carbon credits

Finally, it must be disclosed whether and to what extent carbon credits or compensation measures are used, how their quality is assessed and how they relate to actual emission reductions.

Scope 3 greenhouse gas emissions (ESRS E1-6)

In the first year, only companies with more than 750 employees are required to report Scope 3 data. Due to the higher entry threshold, this primarily affects companies that already report. Companies below this threshold can report Scope 3 data voluntarily. If they do so, they must generally comply with the requirements of ESRS E1-6. Additionally, the omnibus regulation allows for greater use of estimates, secondary data, and simplified methods during the initial phase.

Financial impacts of significant climate risks and opportunities (ESRS E1-9)

Disclosure of the expected financial impacts of significant physical and transitional climate risks and climate-related opportunities is voluntary in the first year of application. If disclosures are made voluntarily, qualitative information is sufficient initially. During the first three years of applying ESRS E1-9, companies may report predominantly qualitatively if reliable quantification is not yet possible.

Conclusion: The ESRS E1 paves the way for transparent sustainability reporting

ESRS E1 obligates companies to disclose their climate-related impacts, risks, and strategies in a traceable manner. The standard thus creates a clear framework for transparent and comparable climate reporting – from emissions and energy consumption to measures, targets, and risks. The omnibus regulation facilitates entry without altering the core content requirements. For companies, this means they must systematically collect climate data, establish processes, and refine their climate strategy. Those who implement these requirements early not only improve their reporting obligations, but also strengthen their credibility, controllability and positioning in the sustainable economic environment.

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For the sake of simplicity and readability, the generic masculine form is used in the text – this always refers to all genders.