Mapping Material Sustainability Topics to Disclosure Requirements for CSRD Reporting (EFRAG ID 177)

Sustainability managers face a major challenge: even though the EU is currently working on simplifying sustainability reporting, such as the CSRD (details on the EU Compass and the Omnibus Packages), they still have to deal with CSRD and the associated European Sustainability Reporting Standards (ESRS).

The aim of CSRD is to make sustainability reports comparable and transparent. However, until recently it was unclear which data points companies actually had to report on the basis of their double materiality analysis.

Through the Q&A platform, companies can submit all kinds of questions to EFRAG (European Financial Reporting Advisory Group). By answering the question with ID 177, EFRAG has now created a tool that provides clarification on the data points to be reported. It provides a clear allocation between the sustainability matters (including sub-topics and sub-sub-topics) in accordance with Application Requirement (AR) No. 16 and the required DRs and DPs. But what does this mean in concrete terms for companies?

We have analyzed the 23-page response from EFRAG and prepared a clear overview of the key findings and valuable tips for companies.

Relevance of the Mapping of Material Topics to ESRS Data Points

In order to prepare a CSRD-compliant report, companies must carry out a double materiality analysis. It is expected that the relevance of sustainability topics is not only assessed at topic level, but also down to specific sub-topics (optional: sub-sub-topics). Companies must comprehensively analyze the impacts, risks, and opportunities (IROs) in relation to their business activities, their value chain and their environment. The result of this analysis shows which topics, sub-topics and sub-sub-topics are material for the company and must therefore be included in the CSRD report.

The problem so far: There was no clear link given between material sub-topics and individual DRs and DPs, making granular DP mapping very difficult and not directly recognizable:

• Which DRs (structural units above data points, e.g., E1-1 Transition plan for climate change mitigation) applied to specific sub-topics.
• Which exact data points (policies, actions, metrics, and targets) were associated with the individual ESRS areas.

This lack of clarity made it difficult to effectively incorporate the double materiality analysis into reporting and to know what to report for each topic (e.g., water and marine resources), sub-topic (water) and sub-sub-topic (water use).

‍For example: If water pollution is a material topic for a company, what specific data needs to be reported? What targets and measures need to be mentioned?

Linking Sustainability Topics with Disclosure Requirements according to EFRAG ID 177

With the answer to question ID 177, EFRAG provides clarity: The answer provides a mapping table for each ESRS topic that links sustainability topics (topics, sub-topics and sub-sub-topics) with the relevant disclosure requirements of the ESRS.

Clear allocation of data points

Detailed overview for companies: essential ESRS data points can be precisely identified and companies know which data points they need to report for a specific topic — and which not.

For example: If the sub-topic of microplastics is considered material for a company under the topic of pollution, the EFRAG document now shows exactly which data points (e.g. E2-4 pollution of air, water and soil) are included and specifies the metrics, targets, actions, or policies that need to be reported.

Overlapping topics and connections

Another important feature is the highlighting of overlaps between different topics. For example, water pollution can also have an impact on biodiversity. Therefore, disclosure requirements on water (E3) may also be linked to those on biodiversity (E4).

Simplified disclosure process

EFRAG publishes mapping tables per ESRS topic in the document ID 177, which make it easier to find out:

• Which disclosure requirements are mandatory (such as the DRs on the materiality assessment process in ESRS 2) and therefore not dependent on the materiality analysis.
• Which disclosure requirements are optional if the related topics were previously classified as "not material".

For a better understanding of the mapping tables and the relationships between the various DRs and the topics, sub-topics and sub-sub-topics, the following graphic shows part of the topic ESRS E3 Water and marine resources (not all sub-sub-topics and DRs are shown). The red outlines show the material topics in this case and the resulting DRs subject to reporting:

DR Mapping: What are the Benefits for Companies?

The published mapping not only makes CSRD implementation easier, but also more efficient. It offers numerous advantages that help companies to fulfill their reporting obligations while saving time and resources:

• More precise reporting: The granularity of the mapping allows companies to ensure that all relevant topics are covered without unnecessary effort. The mapping helps to exclude irrelevant data points and focus on the material topics.
• More efficient reporting: The structured mapping of data points supports companies in better applying their double materiality analysis by clearly showing the link between specific topics and disclosure requirements.
• Fewer uncertainties: Mapping reduces the uncertainties that can arise when selecting relevant data points. Companies no longer have to consider all ESRS data points, but can concentrate on the aspects that are actually essential.

How Sustainability Managers Can Use the ID 177 in Their Role

Step 1: Perform a double materiality analysis

Start with the list of sustainability topics in ESRS 1 AR 16 to find out the relevant topics for your company. These topics provide the basis for your materiality analysis.

Step 2: Use the mapping as a checklist

Use the tables in ID 177 to find all relevant disclosure requirements, data points and metrics for the topics you have identified as material. In this way, you can ensure that you include all the necessary information for your CSRD report.

Step 3: Focus on relevant data points

Not all data points listed in ID 177 are relevant for your company. The document helps you to filter out those that are important for your company.

Step 4: Pay attention to overlaps

Note the interdependencies between topics such as climate change and biodiversity. Make sure that your information reflects these interlinkages.

Tip: Save time and effort — use ESG software

In the AI-based software Sunhat, companies can assign the results of their materiality analysis directly to the material disclosure requirements and data points.

This allows companies to focus entirely on data collection in the next step: the collaboration function makes it easy to collect the required quantitative and qualitative data from every department and subsidiary. This data can be consolidated in Sunhat for the entire group and is available in a database for the CSRD report, as well as for other ESG ratings, reports, or customer questionnaires.

The CSRD module from Sunhat is regularly adapted to the current legal situation. Mapping in accordance with ID 177 is already integrated and available to customers.