ESRS-Professional ESRS Professional Certification Exam Questions and Answers

Entity-specific disclosures are required if a material sustainability matter is not covered or sufficiently detailed in the ESRS. According to ESRS 1, paragraph 11 , if an undertaking identifies an impact, risk, or opportunity that is not adequately covered by an ESRS but is material due to its specific facts and circumstances , it must provide additional entity-specific disclosures . This ensures that users of sustainability reports receive relevant and complete information​.

ESRS 1, paragraph 11 :

Requires entity-specific disclosures when material sustainability matters are missing or not sufficiently covered in the ESRS.

ESRS 1, paragraph 30 :

Mandates that companies must disclose additional entity-specific disclosures if material matters are not covered with sufficient granularity in ESRS​.

ESRS 1, Appendix A (Application Requirements) :

Provides further guidance on entity-specific disclosures, ensuring consistency and comparability while allowing companies to disclose material matters not addressed by ESRS​.

ESRS 2, Disclosure Requirements (SBM-3, IRO-1, GOV-1 to GOV-5) :

Outlines the minimum disclosure requirements that apply when companies make entity-specific disclosures related to governance, strategy, impacts, risks, and opportunity management​.

Key Provisions from ESRS: Thus, if a sustainability matter is deemed material and is not sufficiently addressed by ESRS, entity-specific disclosures are mandatory .

Official References:

Commission Delegated Regulation (EU) 2023/2772, ESRS 1, Paragraphs 11 and 30​.

ESRS Implementation Q & A Platform – Compilation of Explanations January – November 2024​.

According to the European Sustainability Reporting Standards (ESRS) under the Commission Delegated Regulation (EU) 2023/2772, stakeholders are defined as individuals or groups who can affect or be affected by the undertaking. The ESRS distinguishes between two main groups of stakeholders:

Affected stakeholders : These are individuals or groups whose interests are affected or could be affected – positively or negatively – by the undertaking’s activities and its direct and indirect business relationships across its value chain.

Users of sustainability statements : These include primary users of general-purpose financial reporting (e.g., existing and potential investors, lenders, and other creditors such as asset managers, credit institutions, and insurance undertakings) and other users, including the undertaking’s business partners, trade unions, social partners, civil society and non-governmental organizations, governments, analysts, and academics​.

Furthermore, engagement with affected stakeholders is a crucial aspect of the undertaking’s ongoing due diligence process and sustainability materiality assessment. This involves identifying and assessing actual and potential negative impacts to inform the materiality assessment process for sustainability reporting​.

Official References:

Commission Delegated Regulation (EU) 2023/2772 of 31 July 2023 supplementing Directive 2013/34/EU on sustainability reporting standards​.

ESRS 1: General Requirements, Section 3.1 (Stakeholders and their relevance to the materiality assessment process).

Under the ESRS, engagement with affected stakeholders is a core element of due diligence. The outcome of the due diligence process informs the materiality assessment. The ESRS encourage further engagement with stakeholders to collect their input and feedback on the organization's conclusions regarding the material impacts, risks, and opportunities.

This sequence is supported by the official text of Commission Delegated Regulation (EU) 2023/2772 and various ESRS-related documents. The standard emphasizes due diligence as a starting point for the materiality assessment process. The assessment then determines the organization's material impacts, risks, and opportunities, which is crucial for effective stakeholder engagement.

Due Diligence: The ESRS process starts with due diligence, as outlined in the Commission Delegated Regulation (EU) 2023/2772, to identify relevant sustainability matters and affected stakeholders.

Materiality Assessment: The findings from the due diligence process are then used to inform the materiality assessment, as discussed in EFRAG's guidance documents.

Material Impacts, Risks, and Opportunities: Finally, the organization engages with stakeholders to review and refine its conclusions about material impacts, risks, and opportunities, as per the ESRS requirements.

References:

Commission Delegated Regulation (EU) 2023/2772 of 31 July 2023 supplementing Directive 2013/34/EU​

EFRAG Guidance on Materiality Assessment in ESRS​​

ESRS Due Diligence Framework, as outlined in Compilation Explanations and Mapping Sustainability Matters with Disclosure Requirements​​

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The ESRS Taxonomy acts as a framework for tagging sustainability disclosures, ensuring data is structured, consistent, and comparable across organizations.

The CSRD requires sustainability information to be reported in a digitally accessible format , making it available for both people and machines.

Under the CSRD, sustainability reports will eventually be uploaded to the European Single Access Point (ESAP) , centralizing public financial and non-financial information across the EU​.

ESRS as a "framework" – The ESRS taxonomy defines a structure that allows sustainability data to be categorized and tagged effectively​.

"Digitally accessible format" – The CSRD mandates reporting in machine-readable formats such as XBRL to improve transparency and comparability​.

European Single Access Point (ESAP) – ESAP will serve as the centralized EU platform for sustainability and financial disclosures​.

Correct Sentence Completion: Explanation of the Selected Answer: References:

EU Taxonomy Regulation and CSRD Reporting Structure​

EFRAG Explanation on ESRS Digital Reporting​

The double materiality assessment involves identifying sustainability matters that are material either from:

An impact perspective (the organization's effects on people and the environment).

A financial perspective (how sustainability matters affect the organization financially).

The correct steps in conducting this assessment include:

(A) Comparing identified material topics with ESRS 1 AR 16 – This ensures alignment with predefined sustainability matters in ESRS​.

(C) Using ESRS 2 IRO-1 – This disclosure requirement mandates companies to report on their methodology for identifying impacts, risks, and opportunities ​.

(D) Following SBM-3 of ESRS 2 – This section provides requirements for disclosing the material impacts, risks, and opportunities identified through the materiality assessment ​.

(B) False: Entity-specific disclosures must cover all material sustainability topics , even those not explicitly covered in ESRS​.

(E) False: Both financial and impact materiality must be considered (double materiality), not just financial materiality​.

(F) False: Double materiality assessments are mandatory for all organizations reporting under ESRS​.

Commission Delegated Regulation (EU) 2023/2772 , Section 3.3 on Double Materiality​

EFRAG Compilation on Double Materiality Assessments , providing step-by-step guidance on ESRS compliance​

Why the other options are incorrect: References: ==============

The European Sustainability Reporting Standards (ESRS) categorize stakeholders into two main groups :

Affected Stakeholders :

These are individuals or groups whose interests are affected (positively or negatively) by the undertaking’s activities and business relationships across its value chain.

Examples include workers (own workforce and those in the value chain), affected communities, consumers, and end-users.

The identification of affected stakeholders plays a crucial role in an organization’s sustainability due diligence and materiality assessment processes.

Users of Sustainability Statements :

These are primary users of sustainability disclosures, including investors, lenders, and other creditors.

Additional users include business partners, trade unions, civil society organizations, non-governmental organizations (NGOs), governments, analysts, and academics.

The ESRS framework emphasizes the importance of engagement with affected stakeholders as part of an undertaking’s due diligence and materiality assessment process, ensuring that material impacts, risks, and opportunities are adequately identified and reported​.

Official References:

Commission Delegated Regulation (EU) 2023/2772, ESRS 1, Section 3.1 - Defines the two main groups of stakeholders​.

ESRS 2 SBM-2 (Interests and Views of Stakeholders) - Covers how affected stakeholders' views inform an undertaking’s strategy​.

EFRAG Guidance on Stakeholder Engagement and Double Materiality - Reinforces the role of affected stakeholders in sustainability assessments​.

Organizations should report on sustainability for several reasons, including transparency, stakeholder expectations, and competitive advantage . Below is the evaluation of each option:

A. True – Reporting on sustainability demonstrates transparency and accountability , allowing companies to disclose their environmental, social, and governance (ESG) impacts ​.

B. True – Stakeholders , including investors, customers, and regulators, increasingly demand sustainability reporting to assess the long-term viability of a company​.

C. False – While sustainability reporting may contribute to long-term financial gains , it does not guarantee immediate financial benefits ​.

D. True – Companies with strong sustainability performance often enjoy enhanced brand value and competitive advantage , attracting investors and customers who prefer sustainable businesses​.

Why Sustainability Reporting Matters Benefit

Impact on Organization

Transparency & Accountability

Builds trust with investors, regulators, and the public

Stakeholder Expectations

Meets regulatory and customer expectations for ESG disclosures

Brand & Competitive Advantage

Companies with strong ESG performance are more attractive to investors

Regulatory Compliance

Helps meet CSRD and ESRS disclosure obligations

CSRD & ESRS Guidance (2024) – Key Sustainability Reporting Benefits​.

EU Platform on Sustainable Finance Report (2025) – Stakeholder Expectations & Competitive Advantage​.

Official References:

The Facilities Management (FM) department is primarily responsible for providing information on building energy use and the environmental performance of physical infrastructure.

Key responsibilities include:

Energy management : Tracking energy consumption and implementing efficiency measures.

Sustainability initiatives : Managing green building certifications, renewable energy installations, and environmental compliance.

Infrastructure monitoring : Overseeing heating, ventilation, and air conditioning (HVAC) systems, lighting efficiency, and water usage.

While the Operations department may use energy-related data for broader business functions, Facilities Management specializes in monitoring and improving building performance from an environmental perspective​.

ESRS E1 – Climate Change, Disclosure Requirement E1-5 - Specifies requirements for energy consumption and environmental impacts of buildings​.

EFRAG Guidance on Environmental Performance and Building Energy Use - Confirms that FM is responsible for infrastructure sustainability monitoring​.

Official References:

The goal of assurance in sustainability reporting is to confirm the reliability of sustainability disclosures, ensuring that reported information on risks, management strategies, and performance data is accurate and verifiable .

Key aspects of sustainability assurance include:

Evaluating the credibility of reported sustainability risks and how organizations manage them.

Assessing compliance with CSRD and ESRS assurance requirements .

Ensuring data integrity and alignment with financial and sustainability disclosures.

Enhancing investor confidence in an organization’s sustainability reporting​.

CSRD and ESRS Assurance Requirements (Commission Delegated Regulation (EU) 2023/2772, Section 5.2) - Specifies assurance requirements for sustainability reporting​.

EU Sustainable Finance Platform Report (2025) - Confirms assurance processes are necessary to enhance trust in sustainability data​.

Official References: