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S1-5 – Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities

🗂️ ESRS S1 Own workforce, page 9-10

  1. The undertaking shall disclose the time-bound and outcome-oriented targets it may have set related to:

(a) reducing negative impacts on its own workforce; and/or

(b) advancing positive impacts on its own workforce; and/or

(c) managing material risks and opportunities related to its own workforce.

  1. The objective of this Disclosure Requirement is to enable an understanding of the extent to which the undertaking is using outcome-oriented targets to drive and measure its progress in addressing its material negative impacts and/or advancing positive impacts on its own workforce, and/or in managing material risks and opportunities related to its own workforce.

  2. The summarised description of the targets set to manage its material impacts, risks and opportunities related to the undertaking’s own workforce shall contain the information requirements defined in ESRS 2 MDR-T.

  3. The undertaking shall disclose the process for setting the targets, including whether and how the undertaking engaged directly with its own workforce or workers’ representatives in:

(a) setting any such targets;

(b) tracking the undertaking’s performance against them; and

(c) identifying any lessons or improvements as a result of the undertaking’s performance.

Application Requirements

Section titled “Application Requirements”

AR 49. When disclosing information about targets in accordance with paragraph 46, the undertaking may disclose:

(a) the intended outcomes to be achieved in the lives of a certain number of people in its own workforce;

(b) the stability of the targets over time in terms of definitions and methodologies to enable comparability over time; and/or

(c) the standards or commitments which the targets are based on (for instance codes of conduct, sourcing policies, global frameworks, or industry codes).

AR 50. Targets related to risks and opportunities may be the same as or distinct from targets related to impacts. For example, a target to reach adequate wages for non-employees could both reduce impacts on those people and reduce associated risks in terms of the quality and reliability of their output.

AR 51. The undertaking may also distinguish between short-, medium- and long-term targets covering the same policy commitment. For example, the undertaking may have a long-term target to achieve an 80% reduction in health and safety incidents affecting its delivery drivers by 2030 and a near-term target to reduce the overtime hours of delivery drivers by x% while maintaining their income by 2024.

AR 52. When modifying or replacing a target in the reporting period, the undertaking may explain the change by cross-referencing it to significant changes in the business model or to broader changes in the accepted standard or legislation from which the target is derived to provide contextual information as per ESRS 2 BP-2 Disclosures in relation to specific circumstances.