S4-5 – Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities

🗂️ ESRS S4 Consumers and End-users, page 39

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

(a) reducing negative impacts on consumers and/or end-users; and/or

(b) advancing positive impacts on consumers and/or end-users; and/or

(c) managing material risks and opportunities related to consumers and/or end-users.

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

40. The summarised description of the targets to manage its material impacts, risks and opportunities related to consumers and/or end-users shall contain the information requirements defined in ESRS 2 MDR-T.

41. The undertaking shall disclose the process for setting the targets, including whether and how the undertaking engaged directly with consumers and/or end-users, their legitimate representatives, or with credible proxies that have insight into their situation in:

(a) setting any such targets;

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

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

Application Requirements

AR 42. When disclosing targets in relation to consumers and/or end-users, the undertaking may disclose:

(a) the intended outcomes to be achieved in the lives of consumers and/or end-users, being as specific as possible;

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

(c) references standards or commitments on which the targets are based are to be clearly defined in the reporting (for instance codes of conduct, sourcing policies, global frameworks or industry codes).

AR 43. Targets related to material risks and opportunities may be the same as or distinct from targets tied to material impacts. For example, a target to ensure equal access to finance for underserved consumers could both reduce discrimination impacts on those consumers and enlarge the undertaking’s pool of customers.

AR 44. The undertaking may also distinguish between short, medium and long-term targets covering the same policy commitment. For example, the undertaking may have as a main objective to make its online services accessible to people with disabilities, with the longterm goal of having adapted 100% of its online services by 2025, and with the short-term objective of adding x number of accessible features every year up and until 2025.

AR 45. 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.