ESRS E1: 11 Amended Disclosure Requirements Explained (9 Binding)

ESRS E1 is the climate part of the EU’s new sustainability-reporting rules under CSRD. The version in force today (adopted in 2023 as Commission Delegated Regulation 2023/2772) contains 9 disclosure requirements. A November 2025 amended draft, expected to apply from financial year 2027, expands that to 11, adding standalone requirements for physical-risk screening (E1-2) and climate resilience (E1-3). Published by EFRAG as one of 12 European Sustainability Reporting Standards, ESRS E1 covers three sub-topics: climate change mitigation, climate change adaptation, and energy.

This guide walks all 11 amended disclosure requirements, calls out which 2 are new and which 9 already apply, covers the physical-risk screening process under E1-2, the financial-effects disclosure under E1-11, and a side-by-side comparison with IFRS S2. Our dedicated walk, putting a number on physical risk under ESRS E1-9 and E1-11, covers the financial-effects metric in depth.

What Is ESRS E1?

ESRS E1 is the climate-specific topical standard under the Corporate Sustainability Reporting Directive (CSRD). It sits within the broader set of 12 ESRS standards published by the European Financial Reporting Advisory Group (EFRAG). While ESRS 1 and ESRS 2 set cross-cutting rules for how to report, ESRS E1 defines what to report about climate change.

The standard addresses three sub-topics: climate change mitigation (reducing emissions), climate change adaptation (preparing for physical impacts), and energy (consumption and mix). Companies that fall within CSRD scope must assess whether each sub-topic is material using the double materiality framework.

Climate gets special treatment under ESRS. It is the only sustainability topic where a company that decides climate isn’t a material (significant enough to disclose) issue still has to publish a written justification. Among the first big companies to report under CSRD, climate has come out as material for nearly all of them, making climate disclosure effectively universal in practice.

Original vs Amended ESRS E1: What Changed

The original ESRS E1, adopted in 2023, contained 9 disclosure requirements. The amended version (November 2025 draft) restructures and expands the standard to 11 disclosure requirements. The changes are expected to take effect for financial year 2027 reporting.

Two entirely new requirements were added. E1-2 now covers risk identification and scenario analysis as a standalone requirement, with specific mandates for physical risk screening methodology and hazard coverage. E1-3 separates climate resilience into its own disclosure, requiring companies to explain how scenario analysis informs their strategy and adaptive capacity.

The European Commission published a simplification proposal in February 2025, known as Omnibus I. If it becomes law, would shrink CSRD scope from roughly 50,000 to 10,000 companies by raising the employee threshold to 1,000+. The proposal is still working its way through the EU Parliament and Council, and member countries would then need to put it into their national laws. Until that happens, the original CSRD scope under Directive 2022/2464 remains in force. For the first wave of larger companies (those already reporting under the older NFRD rules), a July 2025 “Quick Fix” rule extends phase-in provisions through FY 2025-2026, letting them defer quantitative financial effects under E1-9/E1-11.

The 11 Amended ESRS E1 Disclosure Requirements (9 in the Currently Binding Standard)

The amended ESRS E1 organizes its 11 disclosure requirements into three sections: strategy, impact/risk/opportunity management, and metrics and targets. Below is a walkthrough of each requirement and what companies must report.

Strategy (E1-1 to E1-3)

E1-1: Transition Plan for Climate Change Mitigation. Companies must disclose whether a transition plan exists and how it aligns with the 1.5°C target. The disclosure covers primary decarbonization levers, GHG emission reduction milestones, fossil fuel-related capital expenditure, locked-in emissions from existing assets, governance arrangements for the plan, and implementation progress. The amended version adds emphasis on visual presentation of targets and timelines.

E1-2: Identification of Climate-Related Risks and Scenario Analysis. The most significant addition in the amended standard. Companies must classify risks as physical or transition and describe their identification methodology. For physical risks, the standard requires documented data sources, a likelihood-and-severity assessment methodology, screening across hazard types, and coverage of short, medium, and long time horizons. Scenario analysis must include at least one high-emissions scenario for physical risks and at least one 1.5°C scenario with no or limited overshoot for transition risks. Companies must also disclose the scope of operations covered and key assumptions used.

E1-3: Resilience in Relation to Climate Change. Another new requirement. Companies explain how the results of their scenario analysis inform strategic responses. The disclosure covers adaptive capacity across different time horizons, how the transition plan and mitigation or adaptation actions contribute to resilience, and the key uncertainties involved.

Impact, Risk, and Opportunity Management (E1-4 to E1-5)

E1-4: Policies Related to Climate Change Mitigation and Adaptation. Companies describe their climate policies aligned with the ESRS 2 minimum disclosure requirements for policies (MDR-P). The description should cover how policies address both mitigation (reducing emissions) and adaptation (preparing for physical impacts).

E1-5: Actions and Resources Related to Climate Change Mitigation and Adaptation. Companies report key actions taken during the reporting period, grouped by decarbonization lever, with quantified outcomes where possible. The disclosure also covers financial and human resources allocated to climate actions.

Metrics and Targets (E1-6 to E1-11)

E1-6: Targets Related to Climate Change. Absolute emission reduction targets are mandatory. Intensity targets may supplement but cannot replace absolute targets. Companies disclose baseline years, science-based alignment status, and whether targets cover gross or net emissions.

E1-7: Energy Consumption and Mix. Total energy consumption reported in MWh, broken down by fossil, nuclear, and renewable sources. Companies also report the renewable energy share and provide clarifications on feedstocks and lower heating value.

E1-8: Gross Scopes 1, 2, and 3 GHG Emissions. The standard requires Scope 1 (direct), Scope 2 (both location-based and market-based), and Scope 3 (all 15 categories screened, significant categories updated annually, full inventory every three years). Financial control boundary is the preferred consolidation approach. Companies with fewer than 750 employees may leave out Scope 3 and total GHG emissions for the first year of CSRD reporting. The first-wave companies (those already reporting under the older NFRD rules) that also fall under the 750-employee threshold get a longer break under a July 2025 “Quick Fix” the European Commission adopted: they can leave those data points out for the first three years. First-wave companies above 750 employees still have to disclose Scope 3 from year one.

E1-9: GHG Removals and Carbon Credits. Companies disclose removal and storage projects, plus carbon credit usage broken down by verified, cancelled, and not-yet-cancelled credits.

E1-10: Internal Carbon Pricing. Companies report how internal carbon pricing supports emission reduction decisions, including the average carbon price per tonne applied.

E1-11: Anticipated Financial Effects from Material Physical and Transition Risks and Climate-Related Opportunities. The most data-intensive requirement. For physical risks, companies disclose three data points: the carrying amount of materially exposed assets before any adaptation measures, the percentage of those assets covered by adaptation actions, and net revenue from activities exposed to physical risks. The “before-adaptation” framing is what differentiates E1-11 from IFRS S2’s Paragraph 29(c) (the physical-risk financial-effects disclosure), which is silent on whether the carrying amount should be calibrated before or after adaptation. For the IFRS S2 counterpart and the four interpretive questions Para 29(c) opens up, see our IFRS S2 Paragraph 29(c) walk-through.

For transition risks, the amended E1-11 lists five data points: (a) the carrying amount of assets at material transition risk, plus a range of estimated potential stranded assets through the mid- and long-term under a 1.5°C-aligned scenario; (b) the percentage of those assets addressed by mitigation actions; (c) for lenders, a breakdown of the carrying amount of real estate held as loan collateral by energy-efficiency class; (d) estimated potential liabilities related to the climate transition that do not yet meet financial-statement recognition criteria but may have to be recognised in future periods; and (e) net revenue from material-transition-risk activities, including a separate cut for customers operating in coal, oil, and gas activities. The accounting-recognition language in (d) and the fossil-customer revenue cut in (e) are the two requirements most likely to surface in auditor and credit-analyst review. All estimates require methodology and assumption disclosure, data-source identification, and articulation of major uncertainties.

Physical Risk Screening Under E1-2

E1-2 is where ESRS E1 gets specific about physical climate risk. The requirement mandates that companies identify physical risks using documented data sources and a defined methodology for assessing likelihood and severity. Companies cannot rely on qualitative judgment alone. The standard expects a systematic physical climate risk assessment across hazard types, with results disaggregated by time horizon. For the exact fields to gather, see our walk of the ESRS E1 physical-risk data points.

The scenario analysis component requires at least one high-emissions scenario for physical risks. In practice, SSP5-8.5 (the Shared Socioeconomic Pathway representing high fossil fuel dependence) satisfies this requirement. Pairing it with a moderate pathway like SSP2-4.5 gives companies the range of outcomes the standard expects. For transition risks, the standard separately requires at least one 1.5°C scenario with no or limited overshoot. For a side-by-side comparison of how ESRS E1 scenario requirements compare with IFRS S2, CDP, and other frameworks, see our climate scenario analysis requirements guide, or the IFRS S2 Paragraph 22 scenario disclosure walk-through for the IFRS counterpart.

ESRS E1 uses the climate-hazard list the EU built for its Taxonomy rules (Commission Delegated Regulation 2021/2139). The list splits hazards two ways: by what drives them (temperature, wind, water, or ground movement) and by how they unfold (slow-building “chronic” hazards like sea level rise versus sudden “acute” events like storms). In total, ESRS E1’s Application Requirement 11 (AR 11) lists 28 distinct hazards: 15 chronic (sea level rise, ocean acidification, water stress, soil degradation, permafrost thawing, heat stress, changing precipitation patterns, and others) and 13 acute (heat waves, cold waves, wildfires, cyclones, storms, tornadoes, droughts, heavy precipitation, floods across coastal, river, surface, and groundwater forms, glacial lake outbursts, avalanches, landslides, and subsidence). Companies must screen the hazards that matter for their operations and value chain across short-term (current period), medium-term (up to 5 years), and long-term (beyond 5 years) horizons, and disclose the scope of operations covered along with any exclusions.

For the ESRS E1-2 physical risk screening requirement, platforms like Continuuiti provide documented, scenario-based hazard assessment across 12 of the climate hazards in ESRS E1’s AR 11 taxonomy, including the high-emissions scenario E1-2 mandates, generating the location-specific risk data that CSRD auditors will expect.

Anticipated Financial Effects Under E1-11

E1-11 is the requirement that turns physical and transition risk analysis into monetary figures. For physical risks, companies must disclose three data points: the carrying amount of materially exposed assets before any adaptation measures, the percentage of those assets covered by adaptation actions, and net revenue from activities exposed to physical risks.

Transition-risk disclosures follow a parallel structure with five data points: (a) the carrying amount of assets at material transition risk plus a range of estimated potential stranded assets under a 1.5°C-aligned scenario; (b) the percentage addressed by mitigation actions; (c) for lenders, real estate held as loan collateral broken down by energy-efficiency class; (d) estimated potential liabilities related to the climate transition that do not yet meet financial-statement recognition criteria; and (e) net revenue from material-transition-risk activities, including a separate cut for customers operating in coal, oil, and gas activities. Climate-related opportunities receive similar treatment: carrying amount and net revenue of opportunity-aligned assets.

All financial estimates under E1-11 require methodology transparency. Companies must identify data sources, disclose assumptions, and articulate major uncertainties. The amended version strengthened these requirements to give auditors a clear basis for assurance.

The Quick Fix regulation lets Wave 1 companies defer quantitative financial effects disclosure through FY 2025-2026. Core emissions, transition plans, and governance disclosures remain required during the phase-in period.

ESRS E1 vs IFRS S2: Key Differences

For a side-by-side of where the two regimes diverge on the physical-risk number, see ESRS E1 vs IFRS S2 (physical risk).

Comparing the European rules with the older voluntary framework instead? See ESRS E1 vs TCFD for what changes on physical climate risk.

Both ESRS E1 and IFRS S2 (one of the ISSB-published standards) require companies to disclose climate-related risks and opportunities. The standards share a common lineage through the TCFD framework, and EFRAG and the IFRS Foundation jointly published the ESRS-ISSB Standards Interoperability Guidance in May 2024 to map the alignment between the two frameworks paragraph by paragraph. For the deeper background on how these two standards differ at the directive level, see our CSRD vs ISSB comparison. In practice, companies reporting under both will find significant overlap, but the requirements diverge on materiality, specificity, and scope.

The core difference: ESRS E1 is more prescriptive. It tells companies which scenarios to use, requires specific financial data points, and mandates justification when climate is excluded. IFRS S2 gives companies more flexibility in how they approach scenario analysis and financial effects, but expects the same categories of disclosure. For companies subject to both, the ESRS E1 requirements generally satisfy IFRS S2, but not the reverse. For how these two standards sit alongside TCFD, CDP, AASB S2, and the rest of the disclosure landscape, see our climate disclosure frameworks comparison.

How to Prepare for ESRS E1 Compliance

Companies entering CSRD scope can approach ESRS E1 preparation in five steps.

Step 1: Run a double materiality assessment. Use the EFRAG IG-1 four-step methodology to determine whether each ESRS E1 sub-topic (mitigation, adaptation, energy) is material from both impact and financial perspectives. This upstream materiality decision determines which ESRS E1 disclosures apply; for the physical-risk lens, see ESRS double materiality and physical climate risk. Given that climate has come out as material for nearly all early CSRD reporters, expect to proceed with full disclosure.

Step 2: Screen physical risks across all locations. E1-2 requires documented data sources and a defined methodology. Map which facilities, suppliers, and value-chain segments are exposed to the hazards in ESRS E1’s AR 11 taxonomy (sea level rise, ocean acidification, water stress, soil degradation, heat waves, wildfires, floods, droughts, and the rest of the table), using actual climate datasets rather than expert judgment alone.

Step 3: Run scenario analysis. Select at least one high-emissions scenario (SSP5-8.5 satisfies this) and one 1.5°C pathway. Project risk exposure across short, medium, and long time horizons. Document all assumptions and the scope of operations covered.

Step 4: Quantify financial effects for materially exposed assets. Calculate the carrying amount of assets exposed to physical and transition risks. Determine what percentage is covered by adaptation or mitigation actions. Report net revenue from exposed activities.

Step 5: Document data sources and methodology. ESRS E1 explicitly requires methodology transparency. Prepare audit-ready documentation of data providers, model assumptions, and known limitations. Auditors reviewing CSRD reports will assess whether the methodology supports the conclusions disclosed.

Frequently Asked Questions

What is E1 in ESRS?

ESRS E1 is the climate change topical standard under the Corporate Sustainability Reporting Directive (CSRD). It covers three sub-topics: climate change mitigation, climate change adaptation, and energy. The amended version contains 11 disclosure requirements covering everything from transition plans and GHG emissions to scenario analysis and anticipated financial effects from physical and transition risks.

Is ESRS E1 mandatory?

Yes, for companies within CSRD scope. As written today, CSRD applies to roughly 50,000 EU companies under Directive 2022/2464. A February 2025 Commission proposal (Omnibus I), if it becomes law, would cut that to about 10,000 companies with 1,000+ employees. Climate change is the only ESRS topic where a company that decides climate isn’t a material (significant enough to disclose) issue still has to publish a written justification. This is why climate disclosure is effectively required for in-scope reporters.

What are the sub-topics to be considered for ESRS E1?

ESRS E1 covers three sub-topics: climate change mitigation (reducing greenhouse gas emissions and transitioning away from fossil fuels), climate change adaptation (preparing for and responding to physical climate impacts), and energy (consumption patterns and renewable energy mix). Companies must assess whether each sub-topic is material using the double materiality framework.

What is the difference between ESRS 1 and ESRS E1?

ESRS 1 is the cross-cutting standard that defines how to apply all ESRS standards. It sets the rules for materiality assessment, time horizons (short, medium, long-term), value chain requirements, and transitional provisions. ESRS E1 is the topical standard specifically for climate change disclosures, containing 11 requirements for what companies must report about their climate risks, emissions, transition plans, and financial effects.

What is the climate risk assessment for ESRS E1?

Under the amended ESRS E1, disclosure requirement E1-2 mandates that companies screen physical climate risks using documented data sources, a defined likelihood-and-severity methodology, and scenario analysis with at least one high-emissions scenario (such as SSP5-8.5). The screening must cover multiple hazard types including heat waves, flooding, drought, and wildfire across short, medium, and long time horizons.

What is Appendix E of ESRS 1?

Appendix E of ESRS 1 is the flowchart that illustrates how to determine which Disclosure Requirements apply, based on the outcome of the materiality assessment. It is not the list of sustainability matters. That list lives in ESRS 1 Application Requirement 16, inside Appendix A. AR 16 provides a structured catalogue of topics, sub-topics, and sub-sub-topics across all 12 ESRS standards (climate change adaptation, climate change mitigation, energy, pollution categories, water and marine resources, biodiversity, circular economy, and the social and governance matters under S1 to S4 and G1) that companies use to support their double materiality assessment.

Key Takeaways

ESRS E1 is the most data-intensive of the 12 ESRS standards, and the one that nearly every CSRD reporter will need to address. The amended version raises the bar by adding standalone requirements for physical risk screening (E1-2) and climate resilience (E1-3), while expanding the financial effects disclosure (E1-11) to require specific asset-level data. Companies preparing for CSRD compliance should start with hazard screening and scenario analysis under E1-2, then build toward the financial quantification that E1-11 demands.