What it actually is
European Sustainability Reporting Standards are the mandatory disclosure standards underpinning the EU's Corporate Sustainability Reporting Directive (CSRD), developed by EFRAG (the European Financial Reporting Advisory Group) and adopted by the European Commission. They're the EU's answer to the same problem BRSR solves for India, turning sustainability reporting from a voluntary, inconsistent exercise into a mandatory, comparable one.
A live caveat worth stating plainly: the exact scope of which companies must comply, the employee count and revenue thresholds, is currently under revision through the European Commission's Omnibus simplification package. Any specific number quoted for CSRD/ESRS applicability should be checked against the current text before being relied on, since this is actively moving.
Double materiality, the concept that defines ESRS
Most reporting frameworks ask one question: does this issue affect the company's finances? ESRS asks two, and requires disclosure on both:
Financial materiality
How do sustainability issues, climate risk, resource scarcity, regulation, affect the company's own financial performance and prospects?
Impact materiality
How does the company's own operations and value chain affect people and the environment, regardless of whether that impact shows up in its financials?
An issue is material under ESRS if it's significant on either axis
Not both, this is what makes double materiality broader than single-materiality frameworks like ISSB's IFRS S2.
Who's actually in scope
Large EU companies, EU-listed companies of any size, and non-EU companies with significant EU revenue or a substantial EU presence, but the exact thresholds are the part currently being revised, as flagged above. Indian companies with EU-listed parents, EU subsidiaries above the relevant thresholds, or material EU revenue exposure should treat this as a live compliance question, not a settled one.
Related in the Guide: ESRS · Double Materiality
How ESRS relates to other frameworks
ESRS was deliberately designed to interoperate with GRI, so a company already reporting against GRI has a real head start on ESRS compliance, much of the underlying data collection overlaps, even though the materiality logic and mandatory status differ.