ESRS G1 Business Conduct Overview
ESRS G1 is the governance standard under CSRD — covering anti-corruption, whistleblowing, political lobbying, supplier payment practices, and incidents of bribery. It is the most straightforward ESRS standard to report on for most companies, but the most sensitive from a reputational and legal perspective.
ESRS G1 is the governance standard under CSRD — covering anti-corruption, whistleblowing, political lobbying, supplier payment practices, and incidents of bribery. G1-1 Business conduct policies and corporate culture: Anti-corruption and anti-bribery policies; code of conduct; corporate culture initiatives promoting ethical behaviour; zero-tolerance statement with board sign-off.
The six ESRS G1 disclosure requirements
G1-1 Business conduct policies and corporate culture: Anti-corruption and anti-bribery policies; code of conduct; corporate culture initiatives promoting ethical behaviour; zero-tolerance statement with board sign-off.
G1-2 Management of relationships with suppliers: Approach to supplier relationships — payment terms policy, fair dealing commitments, sustainable procurement standards.
G1-3 Prevention and detection of corruption and bribery: Anti-corruption training coverage (percentage of employees trained); due diligence on corruption risk for new business relationships; internal controls for corruption prevention; whistleblower mechanism.
G1-4 Incidents of corruption and bribery: Total number of confirmed incidents of corruption or bribery during the reporting period; status of each incident (under investigation, remediation in progress, resolved); convictions or sanctions.
G1-5 Political influence and lobbying activities: Total political contributions; lobbying expenditure; material trade association memberships and their policy positions; alignment between lobbying positions and sustainability strategy.
G1-6 Payment practices: Average days to pay supplier invoices; percentage of invoices paid within agreed terms; compliance with national late payment legislation.
Anti-corruption training — the most commonly scrutinised metric
G1-3 anti-corruption training coverage is one of the most frequently verified metrics in ESRS G1 assurance. Assurers will request your LMS (Learning Management System) training completion records to verify the percentage disclosed.
Common issues: training completion rates that include employees who completed the training years ago but have not been retrained; rates that exclude contractors, temporary workers, or senior executives (who should be prioritised, not excluded); and completion rates that count click-through e-learning without knowledge assessment.
Best practice for G1-3: define a training cycle (annual for high-risk roles, biennial for lower-risk); track completion against headcount at a specific date; include all employees in scope; and use training that includes a knowledge assessment with minimum pass mark. This produces a defensible, assurance-ready metric.
For new joiners: disclose whether new employees complete anti-corruption training within their induction period (typically 30–90 days).
Payment practices — G1-6 in practice
G1-6 is the most operationally straightforward G1 disclosure but requires AP system data that sustainability teams rarely have direct access to. Work with your finance and accounts payable teams to extract:
Average days to pay: calculated from invoice receipt date (or invoice date if receipt date is not tracked) to payment date. Most ERP systems (SAP, Oracle, Microsoft Dynamics) can produce this report. For multinational companies, consolidate across all AP entities.
Percentage paid within terms: invoices paid on or before the agreed due date divided by total invoices. Agreed due date is based on the contractual payment terms negotiated with each supplier — not a standard 30-day assumption.
Legal compliance: the EU Late Payment Directive (currently under revision to cap terms at 30 days for commercial transactions) and national late payment legislation set the compliance baseline. Disclose whether your payment practices comply with applicable law.
For companies with poor payment practice metrics: disclosure creates accountability. Many large companies have used delayed supplier payment as a working capital management tool. ESRS G1-6 makes this practice transparent and subject to investor and regulatory scrutiny.
Frequently asked questions
Is ESRS G1 material for all companies?
Business conduct (anti-corruption, ethical governance) is material for virtually all companies — it is rare for a double materiality assessment to conclude G1 is not material. The only plausible exception is a very small company with no international operations, no public procurement exposure, and no corruption-risk business relationships.
What counts as a confirmed corruption incident under G1-4?
An incident that has been investigated and determined to involve actual corruption or bribery — not merely a report or allegation. Include: internal investigations with confirmed findings; regulatory investigations resulting in findings or sanctions; and legal proceedings with convictions or settlements. Allegations under investigation are not confirmed incidents but may be disclosed separately as 'under review'.
Does G1-5 require disclosure of every trade association membership?
Disclose material trade association memberships — those where your annual contribution is significant or where the association's lobbying positions on key policy areas are relevant to your sustainability strategy. You do not need to disclose every professional body or minor industry group membership.
How does ESRS G1 relate to the UN Global Compact?
The UN Global Compact (UNGC) principles include anti-corruption (Principle 10) and human rights due diligence — directly relevant to ESRS G1 and S2. UNGC Communication on Progress (CoP) disclosures overlap significantly with ESRS G1. Companies that are UNGC participants have a useful starting framework for G1-1 and G1-3 disclosures.