The European Union's Corporate Sustainability Reporting Directive (CSRD) mandates a new level of sustainability reporting for companies within the EU. This directive requires the implementation of the European Sustainability Reporting Standards (ESRS), enhancing the depth and breadth of information that companies must disclose about their environmental, social, and governance (ESG) practices.
đ About ESRS S1-4
The ESRS S (for Social) emphasizes four key areas:
ESRS S1: Workforce of the company
ESRS S2: Value chain workers
ESRS S3: Affected communities
ESRS S4: Consumers and end users
Today, we focus on ESRS S1, which directly concerns your company's workforceâincluding permanent employees, temporary staff, and external contractors. This focus is crucial for enhancing transparency around working conditions and employee well-being.
đ Focus on ESRS S1: Workforce of the Company
ESRS S1 targets the social aspect of sustainability standards, focusing on the companyâs own workforce. This includes permanent employees, temporary staff, and external contractors, emphasizing their working conditions, social dialogue, fair wages, training, inclusivity, health and safety, and work-life balance.
đ Exploring the 17 Disclosure Requirements (DRs) of ESRS S1Â
The Disclosure Requirements (DR) are specific pieces of information that firms must report to provide a comprehensive account of these impacts. For the ESRS S1, there are 17 DRs to report on.
DR 1 - Workforce Policies: Companies must describe policies that identify how their activities impact their workforce, including both negative and positive impacts, and how they manage these along with related financial opportunities and risks.
DR 2 - Interaction Processes: How the workforce influences company decisions regarding impact management.
DR 3 - Remediation Processes: Describes the channels through which employees can voice concerns and how these are addressed.
DR 4 - Impact Management Actions: Actions taken to mitigate negative impacts and seize significant opportunities, along with their effectiveness.
DR 5 - Impact Management Objectives:Â Short, medium, and long-term objectives to assess impact management efficacy.
DR 6 - Workforce Characteristics: Key characteristics of employees, such as gender, country, contract type, and turnover rates.
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DR 7 - Non-Employee Workforce: Information on temporary workers and independent contractors including number, contract types, and gender distribution.
DR 8 - Collective Bargaining: Percentage of employees covered by collective agreements and their involvement in social dialogue.
DR 9 - Diversity Indicators: Data on employees in senior management by gender and total employee percentage.
DR 10 - Fair Wages: Percentage of employees not receiving a fair wage as determined by national laws, collective agreements, or international regulations.
DR 11 - Social Protection: Whether all employees have social protection against illness, unemployment, workplace accidents, etc.
DR 12 - Disability Inclusion: How the company supports the inclusion of disabled employees and their distribution by country and gender.
DR 13 - Training and Development: How workforce skills are assessed and the extent of training provided, broken down by hierarchical level.
DR 14 - Health and Safety: Data on workplace accidents and occupational diseases, along with health coverage.
DR 15 - Work-Life Balance: Family leave and other measures to improve the balance between professional and private life.
DR 16 - Remuneration Indicators: Data on pay disparities within the workforce, especially between genders.
DR 17 - Human Rights Incidences: Cases of discrimination and harassment reported and serious human rights violations like forced labor, human trafficking, and child labor.
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