ESRS E1 is the most demanding of all 12 European Sustainability Reporting Standards. It covers climate change — the topic every regulator, investor and customer is watching. If you only focus on one ESRS module, make it this one.
⚠ Important
Mandatory for almost everyone
Unlike most ESRS modules which can be omitted if not material, ESRS E1 is effectively mandatory for all large companies. The EU considers climate impact material for every sector.
What ESRS E1 requires you to disclose
ESRS E1 has five disclosure areas. Each has specific data points, metrics and narrative requirements. Together they paint a complete picture of your company's relationship with climate change — both how you affect the climate and how the climate affects you.
E1-1Hard
Transition plan
Your plan to align with 1.5°C. Includes targets, milestones, capex allocation and timeline.
E1-2Medium
Policies & actions
Climate-related policies in place and actions taken or planned to reduce emissions.
E1-3Medium
Targets
GHG reduction targets, including whether they are science-based (SBTi) or internally set.
E1-4Easy
Energy consumption
Total energy consumed, renewable vs non-renewable split, energy intensity per revenue or output.
E1-5Hard
GHG emissions
Scope 1, 2 and 3 emissions in tCO2e. The most data-intensive requirement — requires GHG Protocol methodology.
E1-6Hard
Physical climate risks
Assessment of acute and chronic physical risks from climate change to your operations and assets.
The GHG emissions requirement in detail
E1-5 is where most companies struggle. It requires disclosure of Scope 1, 2 and 3 greenhouse gas emissions calculated using GHG Protocol methodology. Each scope has different measurement approaches and data requirements.
Scope
Type
Examples
Method
% avg
Scope 1
Direct emissions
Company vehicles, on-site boilers, manufacturing processes, fugitive emissions from refrigerants
Activity data × emission factor
8%Low
Scope 2
Purchased energy
Electricity, district heating, steam purchased from external providers
Market-based or location-based method
15%Low
Scope 3
Value chain
Purchased goods, business travel, employee commuting, sold products, investments
Spend-based, activity-based or supplier-specific
77%High
§ Key fact
The Scope 3 challenge
For most companies, Scope 3 represents 70–90% of total GHG emissions. Yet it is the hardest to measure because it requires data from hundreds of suppliers and customers. ESRS E1 requires at minimum a Scope 3 screening — a high-level estimate across all 15 Scope 3 categories.
Science-based targets: do you need them?
ESRS E1-3 requires you to disclose your GHG reduction targets. You are not legally required to set science-based targets (SBTi), but you must clearly disclose whether your targets are science-based or not. Companies without science-based targets face increasing scrutiny from investors and customers.
7,000+
Companies with SBTi commitments globally
1.5°C
Paris Agreement target all plans must align to
2030
Typical near-term target year for Scope 1+2
2050
Net zero target year for most frameworks
Physical climate risk assessment
E1-6 requires a forward-looking assessment of how climate change physically affects your business. This covers two types of risk: acute risks (extreme weather events like floods, heatwaves, storms) and chronic risks (rising sea levels, changing precipitation patterns, higher average temperatures).
Acute physical risks
- ▸Flood damage to facilities or assets
- ▸Storm disruption to operations or supply chains
- ▸Heatwave impact on worker productivity
- ▸Wildfire risk to offices or manufacturing sites
- ▸Cold snap disruption to logistics networks
Chronic physical risks
- ▸Sea level rise affecting coastal operations
- ▸Water stress in manufacturing regions
- ▸Shifting agricultural patterns for food companies
- ▸Increased cooling costs from higher temperatures
- ▸Permafrost thaw for infrastructure in northern regions
✓ Practical tip
Practical tip
Use the EU Taxonomy climate scenario analysis guidance as your methodology for physical risk assessment. It references IPCC scenarios (RCP 2.6 and RCP 8.5) which auditors and regulators recognise.
How to approach ESRS E1 compliance
ESRS E1 checklist
0/8 complete
Calculate Scope 1 emissions using DEFRA 2025 emission factors Calculate Scope 2 emissions using both location-based and market-based methods Complete a Scope 3 screening across all 15 categories Set GHG reduction targets and document whether they are science-based Document your climate transition plan with milestones and capex Conduct acute and chronic physical risk assessment using IPCC scenarios Measure and report total energy consumption with renewable split Get E1 data independently verified by a third-party auditor Free tool
ESGMaster calculates all of this automatically.
Enter your energy bills and activity data. Claude AI maps everything to ESRS E1 requirements, calculates your tCO2e across all scopes, and drafts your E1 disclosure section.