Physical climate risk data,
ready for ESRS E1.
Most of ESRS is narrative. The financial-effects disclosure isn't. The European Sustainability Reporting Standards turn the Corporate Sustainability Reporting Directive (CSRD) from a legal obligation into specific disclosures, and one of them asks you to quantify: the anticipated financial effects of physical and transition climate risk on every material asset you own. The Commission adopted the revised ESRS on 3 July 2026, which cut roughly 60% of mandatory datapoints, kept that disclosure, and renumbered it from E1-9 to E1-11.
ESRS is the EU rulebook that turns CSRD's legal obligation into specific environmental, social and governance disclosures. The revised standards adopted on 3 July 2026 apply from FY2027, and they keep the disclosure that quantifies the financial effects of climate risk while renaming it from E1-9 to E1-11.
After Omnibus I, EU companies with 1,000+ employees and €450m+ net turnover, roughly 6,000 of the largest undertakings, plus non-EU parent groups with €450m+ EU turnover. Listed SMEs are fully exempt. Wave 1 reporters continue under Set 1 through FY2026, with the option to early-adopt the revised standards or to stay on Set 1 while taking selected reliefs.
ESRS is the rulebook. CSRD is the law.
CSRD requires disclosure. ESRS specifies what to disclose. Twelve standards run the spectrum from cross-cutting governance to topic-specific environmental, social and governance content. All were substantially simplified in 2026; one (E1) remains the most demanding, and its disclosure requirements were renumbered in the process.
Disclosure used to be a story. The financial-effects test made it a number.
The revision cut roughly 60% of mandatory datapoints. It didn't cut the climate risk disclosure, it moved it. The hardest part of ESRS is still the part that needs real data.
Most describe. One quantifies.
Most ESRS disclosures are narrative or method-based. The anticipated financial effects disclosure asks for euros, by horizon, on every material asset exposed to physical climate risk, plus the share of that exposure your adaptation actions cover.
Asset-level, or audit-fail.
The revised standard moved asset location disclosure into application guidance, which changes what you print, not what you compute. Granularity that survives assurance still means asset-level exposure across material physical operations, not country averages or postcode proxies.
Get the physical spine right, the rest follows.
Scenario analysis and resilience are now standalone requirements in their own right at E1-2 and E1-3. They, the adaptation actions, the targets and the resilience case to investors all rest on the same asset-level physical climate risk data.
The ESRS framework: 12 standards, grouped into 7 sections.
ESRS spans 12 individual standards. Some sit alone (ESRS 1, ESRS 2, ESRS E1, ESRS G1). The rest cluster naturally: E2-E5 are the other environmental topics, S1-S4 cover social. Click each section to unpack what the standards actually require, with notes on how the revised standards change the original.
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Chapter 1: ESRS 1 General Requirements
The plumbing of the whole framework.
ESRS 1 sets the rules: how materiality works, how value chain is treated, what time horizons mean, how to consolidate. The revised standards substantially streamline DMA documentation without touching the dual lens itself.
- Double Materiality Assessment (DMA): retained, with a lighter methodology, top-down approaches explicitly endorsed and materiality conclusions permitted at topic level
- Non-material information shall not be reported, strengthened from permissive to directive
- Value chain: estimates permitted, with a cap on what can be requested from smaller counterparties
- Time horizons: short (≤1y), medium (1-5y), long (>5y)
- Anticipated financial effects: estimates may be updated later without counting as errors, and omission provisions apply where disclosure would cause serious commercial prejudice
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Chapter 2: ESRS 2 General Disclosures
The cross-cutting backbone.
ESRS 2 applies regardless of which topical standards are material. Governance, strategy, IRO management, metrics and targets, all cross-cutting and mandatory.
- GOV: governance, oversight, management roles for sustainability
- SBM: strategy, business model and stakeholder engagement
- IRO: process for identifying impacts, risks and opportunities
- MDR: minimum disclosure requirements on policies, actions, targets, metrics
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Chapter 3: ESRS E1 Climate Change
Eleven disclosure requirements, new numbers.
E1 covers transition planning, scenario analysis, resilience, emissions and the anticipated financial effects of physical and transition climate risk. The revised standard restructures it into eleven disclosure requirements, and the numbering moved. Check yours before your workpapers reference the wrong one.
- E1-1 Transition plan for climate change mitigation
- E1-2 Climate-related risks and scenario analysis, now a standalone requirement
- E1-3 Resilience in relation to climate change, also standalone
- E1-6 Targets (was E1-4 under Set 1), E1-8 gross Scope 1, 2 and 3 emissions (was E1-6)
- E1-9 now covers GHG removals and carbon credits, not financial effects
- E1-11 Anticipated financial effects from material physical and transition risks, the former E1-9
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Chapter 4: ESRS E2 to E5
Beyond climate, four environmental standards.
Triggered if material per your DMA. The revised standards reduce narrative requirements substantially while keeping the topical structure.
- E2 Pollution: air, water, soil, substances of concern
- E3 Water and marine resources: withdrawals, discharges, stress
- E4 Biodiversity and ecosystems: impacts, dependencies, sites
- E5 Resource use and circular economy: inflows, outflows, waste
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Chapter 5: ESRS S1 to S4
People, inside and along the value chain.
Four social standards covering own workforce out to consumers and end-users. The revised standards introduce additional reliefs for value-chain workers (S2) and affected communities (S3).
- S1 Own workforce: employees, contractors on-site
- S2 Workers in the value chain: upstream and downstream
- S3 Affected communities: indigenous peoples, local rights-holders
- S4 Consumers and end-users: product safety, access, dignity
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Chapter 6: ESRS G1 Business Conduct
Conduct, culture, payments.
A single governance standard covering business ethics, anti-corruption, political engagement, supplier relations and payment practices. Often less material to climate-focused readers but mandatory if relevant.
- Corporate culture and business conduct policies
- Anti-corruption and anti-bribery training and incidents
- Political engagement, lobbying and contributions
- Supplier relationships and payment-practice transparency
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Chapter 7: Datapoints, MDR & filing
From standard to filed report.
ESRS disclosures land in the management report, machine-readable via ESEF tagging, audit-ready and traceable. The revised standards remove voluntary datapoints entirely.
- Mandatory datapoints reduced by roughly 60%, closer to 70% counting voluntary ones
- Voluntary disclosures eliminated; only mandatory and "if-material" remain
- European Single Electronic Format (ESEF, XBRL) tagging required for filed sustainability statements
- External assurance stays at limited: Omnibus I removed the planned move to reasonable assurance, with harmonised assurance standards due from the Commission by 1 July 2027
Climate risk is still a disclosure number. It just has a new name.
Asset-level physical climate risk, forward-looking scenarios, adaptation costed, audit-grade methodology. The same data spine carries the financial-effects disclosure, the standalone scenario and resilience requirements, and the climate resilience case to investors.
Quantified financial effects
Anticipated euro impact from material physical and transition risks, by short, medium and long-term horizon, plus the carrying amount of assets at material physical risk. The hardest disclosure in the standard, now numbered E1-11.
Asset-level physical climate risk
Property-by-property exposure across real estate, supply chain nodes and operational facilities. The revised standard moved asset location into application guidance, which changes what you print, not what you need to compute.
Scenario analysis, now standalone
E1-2 makes climate-related risk identification and scenario analysis a requirement in its own right, and E1-3 does the same for resilience. High-warming and 1.5°C-aligned pathways, documented, with proxies disclosed rather than quietly applied.
Adaptation coverage, as a percentage
E1-11 asks what share of the carrying amount of materially exposed assets is addressed by adaptation actions. That is a number you can only produce if you know which assets are exposed, which measures are in place or planned, and what each avoids.
Audit-grade methodology
Limited assurance is the standing requirement after Omnibus I removed the planned escalation to reasonable. Every model, proxy and assumption still has to be defensible to an external assurance provider.
A moving rulebook
Set 1 in 2023, Omnibus I in 2026, revised standards in July 2026, and the numbering changed along the way. A disclosure built on documented methodology absorbs that; one assembled by hand each year does not.
Physical climate risk data, built for ESRS E1 disclosure.
Spectra is the physical climate risk data platform behind ESRS E1 disclosures at banks, insurers, asset managers and real estate firms with over $13.5 trillion in combined AUM. Asset-level exposure, forward-looking scenarios, adaptation costed asset by asset, audit-ready methodology, all from one data spine.
Asset-level exposure, 2bn+ assets
Material physical climate risk for every asset in scope. 12 hazards, building-level vulnerability, geolocation precision down to address and parcel. The granularity ESRS E1 expects, without postcode proxies.
Scenarios E1-2 actually requires
CMIP6 SSPs and CMIP5 RCPs including the high-emission pathway the standard expects for physical risk, plus NGFS pathways for the financial sector view. Short, medium and long-term horizons in 5 to 10 year intervals to 2100.
Hazard exposure to financial impact
Annual losses in monetary value and percentage, business disruption risk and confidence intervals, plus the carrying-amount figures E1-11 asks for. The translation from physical hazard to anticipated financial effect, by horizon, by material asset.
Adaptation, costed and evidenced
E1-11 asks for the share of exposed assets covered by adaptation actions, and E1-3 asks whether the business is resilient. Adapt quantifies defence and retrofit options asset by asset, with capex, avoided loss and payback, so both answers rest on documented measures.
Audit-ready by design
Model risk management aligned, ISO 27001 and ISO 14001 certified, full methodology documentation and uncertainty disclosure. Defensible under limited assurance, and portable to parallel IFRS S2, AASB S2, CSDS and SS5/25 filings.
Coverage that finds the assets
Carta maps the assets, subsidiaries and value-chain counterparties in scope before they are scored. Most financial-effects disclosures break here, not in the modelling: the denominator is what nobody can evidence.
Are you ready for ESRS E1 climate risk disclosure?
Pick your industry. The financial-effects question tailors itself to where physical climate risk hits your sector hardest.
ESRS readiness self-check
ESRS E1 physical climate risk: the questions buyers actually ask.
What is ESRS E1?
ESRS E1 is the European Sustainability Reporting Standard for climate change. It is the climate disclosure standard inside the Corporate Sustainability Reporting Directive (CSRD), and it covers transition plans, climate-related risk identification and scenario analysis, the resilience of the business model, Scope 1 to 3 greenhouse gas emissions, and the anticipated financial effects of physical and transition climate risk on assets and operations. The revised standards adopted on 3 July 2026 restructure it into eleven disclosure requirements and renumber several of them.
Is ESRS E1-9 still E1-9?
No, and this is the change most likely to cause an error in your workpapers. Under Set 1, E1-9 is the anticipated financial effects disclosure. In the revised ESRS it becomes E1-11, and E1-9 now covers greenhouse gas removals and carbon credits, which is an entirely different disclosure. Other numbers moved too: targets shift from E1-4 to E1-6, gross Scope 1, 2 and 3 emissions from E1-6 to E1-8, and scenario analysis and resilience become standalone requirements at E1-2 and E1-3. Set 1 numbering still applies to anyone reporting FY2026 on the original standards, so for now both sets of references are live and it is worth stating which basis you are using.
Who has to report under ESRS E1?
After Omnibus I narrowed the scope in early 2026, CSRD applies to EU companies with 1,000+ employees and €450m+ net turnover, roughly 6,000 of the largest undertakings, plus non-EU parent groups with €450m+ EU turnover where they have a subsidiary or branch over €200m. Listed SMEs are fully exempt, having previously been in scope on a delayed timeline. Wave 1 reporters continue under Set 1 through FY2026, with three options for that year: stay on Set 1, early-adopt the revised standards, or apply Set 1 with selected reliefs. First reports under the revised framework cover FY2027.
What is asset-level physical climate risk under ESRS E1?
Asset-level physical climate risk is the exposure of each material asset (real estate, supply chain nodes, operational facilities, financed assets) to climate hazards such as flood, heat, wildfire, drought and storm, modelled across short, medium and long-term horizons under multiple emissions scenarios. E1-2 asks you to identify those risks and run the scenario analysis, E1-3 asks whether the business is resilient to them, and E1-11 asks for the anticipated financial effect, expressed in monetary terms.
What does the financial-effects disclosure require for physical risk?
E1-11 (E1-9 under Set 1) requires disclosure of the anticipated financial effects from material physical and transition risks: the carrying amount of assets at material physical risk before adaptation actions, the percentage of that carrying amount addressed by adaptation actions, the net revenue from activities exposed to physical risk, and the methodology, scenarios, time horizons, assumptions and limitations behind those figures. The revised standard dropped the at-risk percentage of total assets and the acute-versus-chronic split from the requirement text, and moved asset location disclosure into application guidance. It remains the standard's hardest disclosure because it requires translating hazard exposure into euros at asset level.
What climate scenarios does ESRS E1 expect?
ESRS E1 expects scenario analysis using at least one high-emission scenario for physical climate risks, and at least one scenario aligned with limiting warming to 1.5°C with no or limited overshoot for transition risks. In practice this means CMIP6 SSPs (typically SSP1-2.6 and SSP5-8.5) or CMIP5 RCPs (RCP2.6 and RCP8.5), assessed across short, medium and long-term horizons consistent with the company's strategic planning windows. In the revised standards this sits in E1-2 as a requirement in its own right rather than inside a longer climate narrative, which raises rather than lowers the bar on documenting it.
What level of assurance applies to ESRS disclosures?
Limited assurance, and it stays there. The original CSRD planned an escalation from limited to reasonable assurance; Omnibus I removed that, so limited assurance is the standing requirement, with harmonised assurance standards due from the Commission by 1 July 2027. Practically, the level matters less than what it tests: climate figures resting on documented methodology, disclosed uncertainty and traceable source data hold up under review, and figures assembled from country averages and spreadsheet judgement do not.
How does Climate X help with ESRS E1?
Climate X provides asset-level physical climate risk data for ESRS E1 disclosures via Spectra. The platform delivers exposure across 12 hazards for 2 billion+ assets, scenario coverage spanning CMIP6 SSPs, CMIP5 RCPs and NGFS pathways to 2100, financial impact translation in monetary value, and full methodology documentation for assurance. Adapt costs defence and retrofit options asset by asset, which is what the adaptation-coverage percentage in E1-11 and the resilience conclusion in E1-3 both rest on. Used by financial institutions managing over $13.5 trillion in combined AUM. Explore Spectra or book a demo.
From hazard to euros.
Asset-level physical climate risk and adaptation data, ready for the E1-11 financial-effects disclosure and the climate resilience case downstream.
