ESRS E1 Climate Change: A Complete Disclosure Guide for CSRD Reporters in 2026

Of the twelve European Sustainability Reporting Standards, ESRS E1 — Climate Change is the one that swallows the most budget, the most time, and the most attention. It contains the longest list of disclosure requirements, the most quantitative data points, and the most direct ties to your audited financial statements. For virtually every company in scope of the Corporate Sustainability Reporting Directive, E1 will end up material — and even if it doesn't, you'll have to explain why.

This guide walks through what ESRS E1 actually requires in 2026, how to approach the double materiality step for climate, what each of the nine disclosure requirements really asks for, and where the data collection effort gets hard. It's written for both first-time reporters trying to scope the work and for sustainability professionals — or CSRD consultants — who need to know E1 cold.

What Is ESRS E1?

ESRS E1 is the topical standard that governs climate-related disclosures under the CSRD. It sits within the environmental pillar of the ESRS and is structured around two pillars of climate action: mitigation (reducing greenhouse gas emissions) and adaptation (building resilience to physical climate impacts). It also covers energy use, transition planning, and the financial effects of climate risks and opportunities.

Compared to other ESRS standards, E1 is notable for three reasons:

Scale. It contains around 220 individual data points — more than any other topical standard.
Quantitative depth. It requires audited absolute and intensity numbers (emissions, energy, financial impacts) rather than just qualitative narratives.
Cross-standard pull. Your E1 disclosures interact with ESRS S1 (own workforce), ESRS S2 (workers in the value chain), ESRS 2 (general disclosures), and your IFRS/financial statements.

If your company is in scope of CSRD and material on climate (most are), E1 is the disclosure that will be read most carefully by investors, regulators, and the assurance provider.

Who Must Report Under ESRS E1?

In principle, every CSRD reporter must perform a climate materiality assessment. The reporting itself depends on the outcome:

If climate change is material (impact, financial, or both), you must report against all relevant E1 disclosure requirements.
If climate change is not material, you must still issue a detailed explanation of why — including a forward-looking assessment of why it will remain immaterial. This is sometimes called the "explain or report harder" rule.

In practice, virtually all large EU undertakings — and most wave 1 reporters publishing in 2025 — concluded that climate is material. EFRAG's expectation, reinforced by the European Commission's 2024 FAQ, is that the bar for "climate is not material" is exceptionally high. Most companies that tried to argue immateriality were challenged by auditors and by EFRAG's transparency platform.

Following the Omnibus Simplification Package, the scope of CSRD has narrowed and the timeline for waves 2 and 3 has shifted — but the substantive E1 requirements have not been reduced for in-scope reporters.

The Climate Materiality Assessment

Before you can write a single E1 disclosure, you need to determine whether and how climate is material to your business. This sits inside your broader double materiality assessment but has a few E1-specific quirks.

Impact Materiality (Inside-Out)

You assess your company's actual and potential impacts on the climate, both negative and positive, across your operations and value chain. Concretely:

Direct emissions from owned/controlled sources (Scope 1)
Indirect emissions from purchased energy (Scope 2)
Value chain emissions (Scope 3) — upstream and downstream
Positive impacts from carbon removals, low-carbon products, or avoided emissions

Financial Materiality (Outside-In)

You assess how climate-related risks and opportunities affect your financial position, performance, and cash flows. ESRS E1 distinguishes:

Physical risks — acute (storms, floods, wildfires) and chronic (sea level rise, water stress, temperature increases)
Transition risks — policy and legal (carbon pricing, regulation), technology shifts, market changes, reputational risks
Climate-related opportunities — new low-carbon products, resource efficiency, access to green capital

The financial materiality side requires you to perform climate scenario analysis — typically using a 1.5°C-aligned scenario (e.g. IEA NZE) and a high-warming scenario (e.g. IPCC SSP5-8.5). This is the single most under-budgeted element of E1 for first-time reporters.

The Nine ESRS E1 Disclosure Requirements

Once you've established climate is material, the E1 standard requires nine specific disclosures (DRs), labelled E1-1 through E1-9. Here's what each one actually asks for.

E1-1 — Transition Plan for Climate Change Mitigation

A detailed disclosure of your transition plan to align with limiting global warming to 1.5°C, in line with the Paris Agreement. It must include:

GHG emission reduction targets in absolute terms (Scope 1, 2, and 3) for 2030 and roadmap to net zero by 2050
Decarbonization levers and actions
Locked-in GHG emissions from key assets
Alignment with the EU Taxonomy
Capital expenditure plans tied to the transition
How the plan is embedded in overall business strategy

If your company is excluded from the EU Paris-aligned Benchmarks (e.g. fossil fuel companies), you must explicitly disclose this and explain how you intend to align over time. For deeper detail, see our CSRD transition plans guide.

Disclose the policies your company has adopted to manage material climate impacts, risks, and opportunities. This is qualitative and process-oriented:

Scope of each policy (which entities, geographies, value chain segments)
Most senior level accountable for implementation
How stakeholder interests are considered
Reference to recognized frameworks (TCFD, SBTi, etc.)
Public availability of the policy

E1-3 — Actions and Resources in Relation to Climate Change Policies

A description of actions taken or planned, alongside the financial and operational resources allocated to them. For each material action, you'll need:

Description of the action
Expected outcomes in tonnes of CO2e avoided or removed
Time horizon (short/medium/long)
Capex and opex allocated
Type of activity (e.g. mitigation, adaptation, R&D)
Decarbonization levers used (energy efficiency, renewable energy, electrification, etc.)

This is where consultants help most with action quantification — translating qualitative "we'll improve X" statements into auditable expected GHG outcomes.

Disclose your climate targets for both mitigation and adaptation. For each target:

Absolute or intensity-based metric
Target year and base year
Scope covered (Scope 1, 2, 3 — and which categories)
Methodologies (e.g. SBTi-validated)
Whether the target is science-based and aligned with 1.5°C
Progress against the target

Targets must also tie into your E1-1 transition plan and your E1-3 actions. Inconsistencies between these three are the most common audit finding.

E1-5 — Energy Consumption and Mix

Quantitative disclosure of your energy footprint:

Total energy consumption from non-renewable and renewable sources
Breakdown by fuel type (coal, oil, gas, etc.)
Self-generated non-fuel renewable energy
Energy intensity per net revenue (for high-impact sectors)

If you operate in high climate impact sectors (as defined in the ESRS sector classification — agriculture, mining, manufacturing, energy, water, real estate, transport), you must disclose an additional intensity ratio and break down energy consumption per sector.

E1-6 — Gross Scopes 1, 2, and 3 and Total GHG Emissions

The biggest single disclosure in E1, and the one with the most audit scrutiny.

Scope 1: Direct emissions from sources owned or controlled by the company. Reported in metric tonnes CO2e.

Scope 2: Indirect emissions from purchased electricity, steam, heat, and cooling. Reported using both location-based and market-based methods.

Scope 3: Value chain emissions across all 15 GHG Protocol categories where they are material. This is the toughest part — see our dedicated guide to Scope 3 emissions under the CSRD for the full methodology.

You also need:

GHG intensity per net revenue (tonnes CO2e per million euros)
Reconciliation between your reported revenue and the revenue used in the intensity ratio
The operational vs. financial control approach used for your consolidation boundary
Biogenic CO2 emissions from combustion or biodegradation, reported separately
Reasons for using estimates and the share of emissions calculated using primary data

Auditors will typically test your GHG calculation methodology, your emission factors database, your consolidation logic, and your data lineage from raw activity data to reported tonnes. Plan for this in your data collection and gap analysis work.

E1-7 — GHG Removals and GHG Mitigation Projects Financed Through Carbon Credits

Two related disclosures:

Removals — GHG removals and storage from your own operations and value chain, in tonnes CO2e
Carbon credits — credits purchased or planned to be purchased, including project type, vintage, quality standards, and whether they are used toward your targets

E1-7 is also where you disclose your reliance on carbon credits for net zero claims — a topic under increasing regulatory and assurance scrutiny.

E1-8 — Internal Carbon Pricing

If your company applies an internal carbon price to investment decisions, procurement, or executive incentives, you must disclose:

The scope of application
The price per tonne CO2e
The type of internal carbon pricing scheme (shadow price, internal fee, implicit price)
How it ties into financial planning and capex evaluation

Not all companies use internal carbon pricing — if you don't, you simply state that. But if you do, the disclosure must be comprehensive enough for stakeholders to assess credibility.

The most novel and most contested disclosure in E1. It asks for the financial impact of:

Material physical risks (asset damage, business interruption, supply chain disruption)
Material transition risks (stranded assets, carbon costs, market shifts)
Climate-related opportunities (new low-carbon revenue streams, efficiency gains)

For each, quantitative ranges of expected financial effects over short, medium, and long time horizons — derived from your climate scenario analysis.

EFRAG's transition relief allows phased adoption of E1-9 for the first one to three years of reporting, depending on the data point. Most wave 1 reporters used this relief in 2025 reports. Wave 2 reporters in 2026 are expected to provide fuller disclosure.

How E1 Ties Into Other ESRS Standards

E1 doesn't sit in isolation. You'll need to coordinate it with:

ESRS 2 (General Disclosures) — for governance, strategy, IRO management
ESRS E2-E5 — for pollution, water, biodiversity, circular economy where they overlap with climate impacts
ESRS S1 and S2 — for just transition implications, workforce health and safety in extreme weather
EU Taxonomy — for the share of revenue, capex, and opex aligned with climate mitigation and adaptation
Financial statements — for the financial effects in E1-9, the reconciliation in E1-6, and asset impairment from climate-related risks

This cross-standard coordination is one of the strongest arguments for engaging a specialist CSRD consultant rather than treating E1 as a standalone workstream.

The Data Collection Reality

ESRS E1 is, fundamentally, a data engineering problem wearing a sustainability reporting hat. The single biggest cause of delays and budget overruns in first-time E1 reporting is poor data infrastructure.

Scope 1 and 2 Data

Often the easiest:

Stationary combustion: fuel purchase records
Mobile combustion: fleet fuel data
Fugitive emissions: refrigerant logs
Process emissions: production-specific calculations
Purchased electricity, steam, heat: utility bills, supplier statements

Even here, multi-country operations can produce 20–50+ utility accounts, different unit conventions, and missing data periods that require estimation.

Scope 3 Data

This is where it gets hard. The 15 GHG Protocol categories range from "doable with spend data" (purchased goods and services, capital goods) to "requires deep supplier engagement" (use of sold products, downstream leased assets). Companies typically spend 60–70% of their total E1 data collection time on Scope 3.

Common pitfalls:

Using spend-based emission factors where supplier-specific data is feasible
Double-counting between categories (e.g. transport in category 4 and category 9)
Missing categories that are material but inconvenient
Treating supplier emissions as constant year-over-year

Climate Risk Data

Climate scenario analysis demands:

Geo-located asset registers
Physical risk modelling (often via a third-party tool like Jupiter, Cervest, or RMS)
Transition risk modelling (carbon price assumptions, demand projections by scenario)
Translation into financial impacts (linking modelled risk events to P&L and balance sheet impacts)

This is the area where most internal teams underestimate the effort. The IT and finance dependencies alone often add 3–6 months to a first-time program.

Common ESRS E1 Mistakes

Patterns we see again and again — for both first-time reporters and the consultants advising them:

Treating E1 as the sustainability team's problem. It's a finance, operations, procurement, and IT problem. The sustainability team coordinates; they don't execute alone.
Skipping climate scenario analysis. It's hard, so first-time reporters defer it. But E1-9 depends on it, and "we haven't done it yet" is not an acceptable disclosure.
Reporting Scope 3 incompletely without explaining why categories are excluded. The standard requires that exclusions be justified.
Using a single market-based Scope 2 number without dual reporting. Both location-based and market-based are mandatory.
Setting targets without an underlying transition plan. A SBTi-validated target is good; an unvalidated target without a credible plan is an audit red flag.
Forgetting biogenic CO2. Emissions from combustion of biomass (e.g. wood, biofuels) must be reported separately from fossil CO2.
Misaligned consolidation boundaries. Your GHG inventory boundary must match your financial reporting boundary — and any deviation must be explained.

How Long ESRS E1 Reporting Takes

For a first-time E1 report at a mid-to-large company:

Months 1–2: Materiality assessment, gap analysis, governance setup
Months 3–5: GHG inventory build for Scope 1 and 2; Scope 3 screening and prioritization
Months 4–8: Supplier engagement and Scope 3 data collection
Months 5–8: Climate scenario analysis and financial impact modelling for E1-9
Months 6–9: Transition plan design, target setting, action plans
Months 9–11: Drafting disclosures, internal QA, audit prep
Months 11–12: Limited assurance fieldwork, final adjustments, publication

A realistic first-time program is 9 to 12 months end-to-end, and second-year reports get faster only if year-one data infrastructure was built properly.

When to Bring in a CSRD Consultant for E1

Most companies bring in external help on at least one of:

GHG inventory — especially Scope 3 and the methodological judgement calls
Climate scenario analysis — modelling, financial translation, choice of scenarios
Transition plan design — making it credible, ambitious, and audit-ready
Assurance prep — anticipating auditor challenge on methodology and evidence

If you're choosing between in-house build, Big 4, and independent specialists, see our comparison of Big 4 vs. independent CSRD consultants and our guide to CSRD consulting costs.

Find an ESRS E1 Specialist

If you need a CSRD expert with deep ESRS E1 experience — climate accounting, scenario analysis, transition planning, and audit-ready disclosure drafting — the CSRD Experts directory lets you search by expertise, industry, and location to find specialists who have run real E1 programs for companies like yours.

Whether you need a strategic advisor on transition plans, a GHG accounting specialist for Scope 3, or a full-service partner for your first CSRD cycle, the right consultant can compress a 12-month timeline into 7 and keep the auditor satisfied at every step.

ESRS E1 Climate Change: A Complete Disclosure Guide for CSRD Reporters in 2026

What Is ESRS E1?

Who Must Report Under ESRS E1?