Guide to ESRS Governance Requirements

The Environmental, Social, and Governance (ESG) Reporting Standard serves as a foundational framework enabling organizations to disclose their approaches to sustainability impacts, risks, and opportunities. This guide focuses on ESRS G1, the governance component.

What is ESRS G1?

Also known as the Topical Governance Standard, ESRS G1 guides organizations in reporting the governance aspects of their business conduct. It encompasses corporate culture, whistleblower safeguards, anti-corruption initiatives, supplier relationship management, and political participation.

Six Key Disclosure Dimensions

1. Corporate Culture

Organizations must disclose their ethical approaches, including anti-corruption and anti-bribery policies that shape organizational culture and conduct.

2. Whistleblower Protection

Companies need to report on their reporting channels, training programs, and retaliation safeguards that protect individuals who report wrongdoing.

3. Animal Welfare

Organizations are required to disclose their commitments and approaches to animal protection across their operations and value chain.

4. Political Engagement

Transparency around lobbying activities and political contributions is essential, including disclosure of financial support to political entities.

5. Supplier Relationships

Payment practices must be reported, with particular emphasis on timely compensation to small and medium-sized enterprises (SMEs).

6. Corruption Prevention

Companies must disclose their training programs, incident reporting mechanisms, and investigation outcomes related to corruption and bribery.

Primary Objectives of ESRS G1

ESRS G1 aims to demonstrate how administrative, management, and supervisory functions shape and evaluate organizational culture. It addresses business ethics, supplier fairness, and requires transparent disclosure of political influence activities. By following these requirements, organizations can build trust with stakeholders and demonstrate their commitment to responsible governance.