GRI ESRS-Professional Dumps Questions Answers

Nature is indeed recognized as a "silent stakeholder" in the European Sustainability Reporting Standards (ESRS). This term implies that, although nature cannot actively voice its concerns, it remains a critical component of sustainability reporting due to its fundamental role in sustaining life and economic activity. ESRS emphasizes that organizations must consider their impacts on nature, ecosystems, and biodiversity as part of their sustainability disclosures.

This recognition aligns with the concept ofdouble materialityembedded in the ESRS framework, which considers both the financial impact on an organization and the organization's impact on environmental and social matters. The ESRS explicitly integratesbiodiversity and ecosystems (ESRS E4)as a key topic, reflecting the need to account for the effects of business activities on nature, even if nature itself cannot actively advocate for protection.

Thesilent stakeholderconcept reinforces theduty of carethat organizations hold in assessing and mitigating their impacts on biodiversity, land use, pollution, and natural resources. This aligns with theUnited Nations Sustainable Development Goals (SDGs)and theEU Biodiversity Strategy for 2030, both of which emphasize the protection and restoration of natural ecosystems​.

Commission Delegated Regulation (EU) 2023/2772 of 31 July 2023(ESRS E4 - Biodiversity and Ecosystems)​.

EFRAG Guidance on Stakeholder Engagement– Highlights nature as an affected stakeholder in sustainability matters​.

EU Biodiversity Strategy for 2030– Emphasizes that economic activities must integrate ecosystem preservation and restoration​.

Official References:This confirms that the statement istrueunder ESRS standards.

ESRS 2 is a cross-cutting, sector-agnostic standard (Option A)

ESRS 2 appliesto all undertakings, regardless of sector or industry.

It establishesgeneral disclosuresthat cover governance, strategy, materiality, risks, and sustainability metrics​.

Certain ESRS 2 disclosure requirements are subject to a phase-in period (Option C)

Some disclosure requirements have been phased infor companies with fewer than 750 employees, allowing gradual adoption​.

For instance, disclosures related tobiodiversity (ESRS E4), workforce (ESRS S1-S4), and pollution (ESRS E2)can beomitted for the first 1-2 years, depending on company size​.

B. Reporting organizations don’t have to address all disclosure requirements in ESRS 2

This is incorrect becauseESRS 2 disclosures are mandatory for all reporting organizations. Only topical ESRS requirements depend on materiality assessments​.

Commission Delegated Regulation (EU) 2023/2772, ESRS 2- Defines ESRS 2 as a sector-agnostic, cross-cutting standard​.

EFRAG Compilation Explanations (January–July 2024), Appendix C- Lists ESRS 2 disclosures with phase-in provisions​.

Incorrect Answer:Official References:

Under the European Sustainability Reporting Standards (ESRS), organizationscan leverage their ongoing dialogue with stakeholders for the materiality assessment.The ESRS explicitly acknowledges that stakeholder engagement plays a fundamental role in assessing material impacts, risks, and opportunities.

Stakeholder Engagement is Central to Materiality Assessment

ESRS 1 and ESRS 2 emphasize that organizations should integrate stakeholder perspectives into their materiality assessments.Engagement with affected stakeholders is central to the undertaking’s ongoing due diligence process and sustainability materiality assessment.This includes processes to identify and assess actual and potential negative impacts, which inform the identification of material sustainability topics​.

ESRS Does Not Mandate a Specific Stakeholder Engagement Approach

While stakeholder input is considered valuable, the ESRS doesnot prescribe a mandatory format or behavior for engagement. Companies have flexibility in determining how they engage with stakeholders.

IG 1 Materiality Assessment FAQ 15states:"The ESRS require disclosure on the materiality assessment and its outcomes but do not mandate specific behavior on stakeholder engagement or the due diligence process."​.

Stakeholders Can Provide Objective Evidence

The materiality assessment should be based as much as possible onobjective data and evidence, butstakeholder perspectives can be a source of supporting evidencefor impact materiality.

The relevance of stakeholder input depends onhow much they are affectedby an organization’s activities (severity and likelihood of impacts)​.

Due Diligence and Materiality Assessment

Thedue diligence process includes stakeholder engagement, which informs the materiality assessment. Organizations must report how they integrate stakeholder feedback into identifying and assessing material issues​.

Nature as a Silent Stakeholder

The ESRS even recognizes thatecological data and conservation indicatorsshould be considered as proxy indicators for stakeholder engagement where human stakeholders are absent (e.g., in cases of biodiversity impact assessments)​.

Thus, the statement in the question isfalse. Organizationsare encouragedto utilize their existing stakeholder engagement mechanisms to inform their materiality assessments under ESRS.

Official References:

Commission Delegated Regulation (EU) 2023/2772​.

Compilation Explanations January - November 2024​.

ESRS 1 & 2 Guidelines on Double Materiality​.