The Corporate Sustainability Reporting Directive requires large EU-based apparel and footwear groups to produce a sustainability statement structured around the European Sustainability Reporting Standards. The statement is not a free-form narrative: it is built from a defined list of datapoints, some of which are mandatory regardless of what your materiality assessment concludes, and many of which are triggered by that assessment. Understanding which category each datapoint falls into—and where your reporting boundary ends—is the first practical task for any sustainability or finance lead preparing for CSRD compliance.
Key takeaways
- ESRS Set 1 establishes a two-tier datapoint structure: a mandatory baseline that applies to every in-scope undertaking, and a larger set that is subject to double materiality assessment.
- EFRAG's implementation guidance catalogued the full Set 1 datapoint list, and EFRAG subsequently simplified that baseline in late 2025—so the figures in earlier guidance represent the starting architecture, not the current obligation.
- For fashion groups with outsourced manufacturing, the reporting boundary extends into the upstream value chain, meaning tier-1 and, in many cases, tier-2 supplier data must be collected or estimated.
- Double materiality requires assessing both financial materiality (risks and opportunities affecting the undertaking) and impact materiality (effects on people and the environment)—neither dimension can be omitted.
- Groups already reporting under GRI or TCFD frameworks will find significant conceptual overlap, but ESRS imposes additional structure and sector-specific expectations that those frameworks do not fully cover.
What is the ESRS datapoint structure?
ESRS Set 1 consists of twelve cross-cutting and topic-specific standards. ESRS 1 sets out the general requirements and architecture; it does not itself contain disclosure requirements. The remaining eleven standards—ESRS 2 (general disclosures) plus ten topic standards covering climate, pollution, water, biodiversity, circular economy, workforce, value chain workers, affected communities, consumers, and business conduct—each contain disclosure requirements expressed as individual datapoints.
EFRAG's Implementation Guidance document IG 3 catalogued those datapoints in a structured Excel format to help undertakings map their preparation work. According to that explanatory note, the original Set 1 architecture contained 161 datapoints that are mandatory irrespective of the materiality assessment, alongside a further 622 datapoints subject to that assessment. EFRAG revisited this baseline in late 2025 and cut the mandatory count substantially—so those figures describe the architecture from which simplification was made, not the current obligation you face.
The practical implication is that your compliance programme should be built on the simplified baseline now in force, while the IG 3 taxonomy remains the most useful reference for understanding how datapoints are categorised and which standards drive them.
Which ESRS standards are most material for apparel and footwear?
Materiality is determined by the undertaking through a structured double materiality assessment, not prescribed by the standard itself. That said, the nature of apparel and footwear production means certain topics are almost always material.
ESRS E1 (Climate change) is material for virtually every large fashion group. Scope 1 and Scope 2 emissions from owned operations are relatively straightforward to measure; Scope 3 categories—particularly purchased goods and services, which dominate the footprint of brands that outsource manufacturing—require engagement with suppliers or the use of spend-based or industry-average estimation methods.
ESRS S2 (Workers in the value chain) is structurally material for any brand that sources from contract manufacturers. This standard requires disclosure of due diligence processes, identified impacts, and remediation actions in relation to workers who are not direct employees but whose working conditions are affected by the undertaking's purchasing decisions.
ESRS E5 (Resource use and circular economy) covers material consumption, waste, and end-of-life product management—all directly relevant to textile production volumes and the growing regulatory focus on textile waste under the EU's broader circular economy agenda.
ESRS G1 (Business conduct) addresses anti-corruption, supplier conduct standards, and payment practices. For groups operating global supply chains, this standard intersects with due diligence obligations under the Corporate Sustainability Due Diligence Directive.
Hugo Boss's combined non-financial statement for its most recent annual report illustrates how a large premium apparel group approaches this in practice. The statement applies ESRS Set 1 on a partial basis, as permitted under German law given that the CSRD had not yet been transposed at the time of preparation. The double materiality assessment conducted in accordance with ESRS 1 concluded that nine of the ten ESRS topics are generally material for the group—a result consistent with what sustainability leads at most large fashion groups would expect.
How does double materiality work in practice?
Double materiality requires you to assess each ESRS topic from two directions simultaneously.
Impact materiality asks whether your business activities cause, contribute to, or are directly linked to significant impacts on people or the environment—whether actual or potential, positive or negative. For a fashion group, the most significant impact risks typically arise in the upstream supply chain: raw material extraction, fibre processing, dyeing and finishing, and cut-and-sew operations.
Financial materiality asks whether sustainability-related risks or opportunities could reasonably be expected to affect the undertaking's financial position, performance, or cash flows. Physical climate risk to supplier facilities, transition risk from carbon pricing, and reputational risk from supply chain incidents are all examples that apparel groups regularly identify.
A topic is material under ESRS if it clears either threshold—not both. This means a topic that poses no significant financial risk to your group may still require disclosure if your purchasing practices create significant impacts on value chain workers.
The assessment must be documented, and the documentation forms part of the sustainability statement. ESRS 2 requires disclosure of the process used, the criteria applied, and the outcome—including which topics were assessed as not material and why.
Where does the reporting boundary fall for outsourced manufacturing?
This is the question that causes the most practical difficulty for fashion groups, and the ESRS answer is deliberately broad.
ESRS 1 establishes that the sustainability statement covers the undertaking's own operations and its value chain, including upstream and downstream activities. For a brand that designs in-house but manufactures entirely through contract factories, this means the reporting boundary extends beyond the legal entity and its consolidated subsidiaries.
In practice, the standard distinguishes between what you must report on and what you must estimate or describe qualitatively when data is unavailable. ESRS 1 includes a phased approach for value chain data: in early reporting years, undertakings may use estimates, proxy data, or sector averages where direct supplier data cannot reasonably be obtained, provided they disclose the estimation methods used and the limitations of the data.
This does not mean value chain data can be indefinitely deferred. The expectation is that undertakings progressively improve data quality as supplier engagement matures. Groups that have not yet established systematic data collection from tier-1 suppliers should treat the first reporting cycle as the baseline from which improvement is measured, not as a ceiling.
For tier-2 and beyond—the mills, spinners, and raw material producers that supply your contract manufacturers—the standard acknowledges that direct data collection is often not feasible. Sector-average emission factors, industry databases, and spend-based Scope 3 methodologies are all acceptable where direct data is absent, subject to disclosure of the approach.
What data does H&M Group's reporting approach illustrate?
H&M Group's sustainability reporting page describes its annual and sustainability report as its main disclosure under CSRD, prepared in accordance with ESRS and based on a double materiality assessment covering the full value chain. The group also integrates TCFD, GRI, and UN Guiding Principles on Business and Human Rights frameworks into the same document—an approach that reflects the significant overlap between ESRS and these established voluntary standards, while acknowledging that ESRS imposes additional mandatory structure.
The H&M Group example is useful for one specific reason: it demonstrates that even a group operating at very large scale, with complex multi-tier supply chains spanning dozens of countries, treats the double materiality assessment as covering the full value chain rather than limiting scope to owned operations. This is the correct interpretation of ESRS 1, and it sets the expectation for how regulators and auditors will read boundary decisions made by other groups.
What are the assurance and audit implications?
CSRD requires the sustainability statement to be subject to limited assurance by a statutory auditor or an independent assurance provider. Limited assurance is a lower standard than the reasonable assurance applied to financial statements, but it is not a rubber stamp: the assurer must obtain sufficient evidence to conclude that nothing has come to their attention indicating the statement is materially misstated.
For fashion groups, the assurance scope covers both the process disclosures (how you conducted the materiality assessment, how you determined the reporting boundary) and the quantitative datapoints (emissions figures, workforce metrics, due diligence indicators). Datapoints derived from supplier estimates or proxy data must be accompanied by adequate disclosure of methodology—assurers will scrutinise the basis for value chain figures more closely than for figures drawn from owned operations.
The move toward reasonable assurance, which the Commission may introduce in a later phase, will raise the evidentiary bar further. Groups that invest now in systematic supplier data collection—rather than relying on estimates throughout—will be better positioned when that transition occurs.
What should sustainability and finance leads do now?
The following steps reflect the sequence that the ESRS architecture implies, rather than a prescriptive compliance programme.
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Confirm your in-scope entities. CSRD applies to large EU undertakings and, from later phases, to non-EU groups with significant EU revenue. Establish which legal entities fall within the consolidated sustainability statement.
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Conduct or update the double materiality assessment. This is the foundation of the entire statement. The assessment determines which topic standards apply and therefore which datapoints you must collect. Without a documented DMA, you cannot determine your disclosure obligations.
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Map mandatory datapoints. Using the simplified EFRAG baseline now in force, identify which datapoints apply regardless of your materiality outcome. These require data collection irrespective of what your DMA concludes.
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Map material-topic datapoints. For each topic your DMA identifies as material, identify the applicable disclosure requirements under the relevant ESRS standard. Prioritise the quantitative datapoints that will require the longest data collection lead time.
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Assess value chain data availability. For each material topic with a value chain dimension, determine what data you can obtain from tier-1 suppliers directly, what must be estimated, and what methodology you will use for estimation. Document the approach.
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Align with existing frameworks. If your group already reports under GRI or TCFD, map the overlap. ESRS E1 aligns substantially with TCFD; ESRS social standards share significant ground with GRI 400-series standards. Existing data collection processes may cover a meaningful share of ESRS requirements.
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Engage your statutory auditor early. Limited assurance requires the auditor to understand your methodology before the statement is finalised. Early engagement reduces the risk of late-stage revisions to datapoint methodologies.
FAQ
What is the difference between mandatory and subject-to-materiality datapoints under ESRS? Mandatory datapoints must be disclosed by every in-scope undertaking regardless of what the double materiality assessment concludes. Subject-to-materiality datapoints are only required when the relevant topic is assessed as material. The mandatory set covers general disclosures and certain cross-cutting requirements; the larger subject-to-materiality set covers topic-specific quantitative and qualitative disclosures.
Does CSRD require fashion brands to collect data from their suppliers? Yes, in principle. ESRS 1 sets the reporting boundary at the full value chain, including upstream manufacturing. However, where direct supplier data cannot reasonably be obtained, undertakings may use estimates or proxy data in early reporting years, provided they disclose the estimation methodology and its limitations.
How does the double materiality assessment differ from a standard risk assessment? A standard risk assessment focuses on financial risks to the undertaking. Double materiality adds an impact dimension: you must also assess the significant effects your activities have on people and the environment, regardless of whether those effects create financial risk for you. A topic can be material under ESRS on the basis of impact alone.
What happens if CSRD has not yet been transposed into national law in my jurisdiction? Some groups, including certain German undertakings, have reported on a partial ESRS basis under existing national non-financial reporting law while full CSRD transposition remains pending. The ESRS standards themselves are set at EU level; national transposition affects the legal mechanism of enforcement, not the content of the standards.
How does CSRD interact with the Corporate Sustainability Due Diligence Directive? The two directives are complementary. CS3D establishes obligations to identify, prevent, and remediate adverse human rights and environmental impacts in the value chain. CSRD requires you to disclose how you are meeting those obligations. The due diligence process required by CS3D feeds directly into the ESRS S1, S2, and G1 disclosure requirements.
Are smaller fashion brands in scope for CSRD? CSRD's initial scope covers large undertakings meeting two of three size thresholds: more than 250 employees, more than €40 million net turnover, or more than €20 million balance sheet total. Listed SMEs face a later and lighter-touch obligation. Many independent fashion brands fall below the large-undertaking threshold, though they may face indirect disclosure pressure as suppliers to in-scope groups.
What is the timeline for limited assurance under CSRD? Limited assurance applies from the first reporting year under CSRD. The Commission retains the option to move to reasonable assurance in a later phase, subject to a review of market readiness. The transition timeline has not been finalised.
Further reading
- EFRAG IG 3: List of ESRS datapoints – Explanatory note
- H&M Group sustainability reporting
- Hugo Boss combined non-financial statement, Annual Report 2025