The Sustainability Statement: Where It Sits in the Management Report and What It Contains

The statement is published with the management report within 12 months of the balance sheet date, together with a limited assurance opinion on it. It is the output of sustainability reporting, and the rules on who reports under the Corporate Sustainability Reporting Directive (CSRD) decide whether a company prepares one.

This page covers the statement's placement, its four-part structure in the 2023 and 2026 ESRS sets, incorporation by reference, the version statement for financial year 2026, publication and mark-up as of 29 October 2026, and 905 assured statements for financial year 2025.

What Is a Sustainability Statement?

In the ESRS glossary, the sustainability statement is the dedicated section of the undertaking's management report where the information about sustainability topics and sub-topics prepared in accordance with Directive (EU) 2022/2464 and the ESRS is presented (Annex II to Delegated Regulation (EU) 2026/1563). The Directive itself does not use the term. It requires that sustainability information "shall be clearly identifiable within the management report, through a dedicated section of the management report", and the ESRS name that section.

The content of the section comes from Article 19a(2) of Directive 2013/34/EU, inserted by Directive (EU) 2022/2464, which covers, in this order, the business model and strategy, time-bound targets, the role of the administrative, management and supervisory bodies, policies, incentive schemes, due diligence, the principal adverse impacts and the actions taken, the principal risks and dependencies, and indicators. The undertaking also reports the process carried out to identify the information included in the management report, covering short, medium and long-term horizons as applicable. Article 19a(4) requires the reporting to follow the standards adopted under Article 29b, which are the ESRS.

Where the Statement Sits: A Dedicated Section of the Management Report

The sustainability statement sits inside the management report as a clearly identifiable dedicated section (second subparagraphs of Articles 19a(1) and 29a(1) of Directive 2013/34/EU, inserted by Directive (EU) 2022/2464), and Directive (EU) 2026/470 left that rule unchanged: its Article 2(4)(a) replaced only the first subparagraph of Article 19a(1), the scope test. A recital of the CSRD states the policy behind it: Member States "should no longer be allowed to exempt undertakings from the obligation to include in the management report information on sustainability matters". Directive (EU) 2026/470 binds the Member States, which must transpose its Articles 1 to 3 by 19 March 2027 (Article 5(1)), and companies are bound by the national law that does so.

Individual Undertakings and Parent Undertakings

An undertaking places the statement in its own management report under Article 19a, and a parent of a group places a consolidated statement in the consolidated management report under Article 29a. A subsidiary is exempt from its own statement where it is included in the consolidated management report of its parent, provided it publishes the weblinks and the statement that Article 19a(9) requires.

From financial years starting on or after 1 January 2027, the duty applies to undertakings with a net turnover of more than EUR 450 million and an average of more than 1,000 employees during the financial year, both together, individually (Article 19a(1)) or on a consolidated basis (Article 29a(1)), as replaced by Articles 2(4)(a) and 2(5)(a) of Directive (EU) 2026/470. Wave 1 covers financial years 2024 to 2026 only (Article 5(2)(a) of Directive (EU) 2022/2464 as amended by Article 3(1)(a)(i) of Directive (EU) 2026/470), and how both values are counted is set out under CSRD thresholds for undertakings and groups.

Listed Issuers and the Annual Financial Report

For issuers with securities on an EU regulated market, the management report inside the annual financial report must be drawn up in accordance with Articles 19, 19a, 20 and 29d(1) of Directive 2013/34/EU and include the specifications adopted under Article 8(4) of Regulation (EU) 2020/852 (Article 4(5) of Directive 2004/109/EC as replaced by Article 2(2)(b) of Directive (EU) 2022/2464). Under the same Transparency Directive, the responsibility statement covers the sustainability reporting (Article 4(2)(c)), and the assurance report is published in full with the annual financial report (Article 4(4)). From financial year 2027, these rules apply to issuers above the same two values, individually or consolidated (third subparagraph of Article 5(2) of Directive (EU) 2022/2464 as amended by Article 3(1)(b) of Directive (EU) 2026/470).

Management Bodies Sign Off the Statement

The members of the administrative, management and supervisory bodies are collectively responsible for the management report, including its compliance with the standards adopted under Article 29b, Delegated Regulation (EU) 2019/815 and Article 29d (Article 33(1) of Directive 2013/34/EU as replaced by Directive (EU) 2022/2464). Member States may derogate from that collective responsibility for preparation in accordance with Article 29d (second subparagraph of Article 33(1) as replaced by Article 2(11) of Directive (EU) 2026/470). The management informs the workers' representatives and discusses the information with them, and their opinion is communicated to the bodies (Article 19a(5)).

How the Statement Is Structured: Four Parts in a Fixed Order

Both ESRS sets divide the sustainability statement into four parts in a fixed order, general information, environmental information, social information and governance information (ESRS 1 paragraph 115 of the 2023 set; paragraph 105 of the 2026 set), and the 2026 set allows a different structure only with a reasoned explanation. Both sets require a structure that presents the information "in a format that is both human-readable and machine-readable" (2023 set paragraph 111(b); 2026 set paragraph 104(b)). The presentation rules sit in ESRS 1 chapter 8: paragraphs 110 to 117 of the 2023 set (Delegated Regulation (EU) 2023/2772 as amended by 2025/1416) and paragraphs 103 to 111 of the 2026 set (Annex I to Delegated Regulation (EU) 2026/1563), which apply to financial years beginning on or after 1 January 2027 (Article 3). Both sets contain 12 standards.

Table 1 compares the eight structural elements of the statement in the two sets; the chapter itself is explained under ESRS 1 general requirements.

The General Part That Frames the Statement

The general part carries the disclosures of ESRS 2: the basis of preparation (BP-1, BP-2), governance, strategy, and the identification and assessment of impacts, risks and opportunities (IRO-1, IRO-2). The other codes differ by set: GOV-1 to GOV-5, SBM-1 to SBM-3 and MDR-P, MDR-A, MDR-M, MDR-T in the 2023 set; GOV-1 to GOV-4, SBM-1 to SBM-3 and GDR-P, GDR-A, GDR-M, GDR-T in the 2026 set. The content of each disclosure is explained under ESRS 2 general disclosures.

ESRS 1 paragraph 29 of the 2023 set requires the undertaking to disclose ESRS 2, and the disclosure requirements of the topical standards that relate to IRO-1, irrespective of the outcome of its materiality assessment.

The Topical Parts and the Materiality Filter

The environmental, social and governance parts hold the topical standards E1 to E5, S1 to S4 and G1, but only for the topics the materiality assessment finds material. In the 2026 set, ESRS 1 paragraph 24 states the filter directly: the undertaking does not disclose information prescribed by a disclosure requirement or datapoint if that information is not material, supplementary information excepted. The Article 8 Taxonomy disclosures sit in a separately identifiable part of the environmental section in the 2023 set (paragraph 113), and the 2026 set allows them in a separate appendix within the management report (paragraph 106).

Materiality therefore decides which topical information the statement contains, and the method is set out under double materiality assessment under the ESRS.

Executive Summary and Supplementary Information in the 2026 Set

The 2026 set adds two optional elements: an executive summary, which is an integral part of the sustainability statement or is incorporated by reference (ESRS 1 paragraph 110), and supplementary information from other legislation or frameworks, such as the GRI Standards, clearly identified as not resulting from the materiality assessment (paragraphs 107 to 109). The same paragraphs allow non-material disclosures made for a specific user, under the same identification rule.

Incorporation by Reference: Eligible Documents, Assurance and Other Conditions

Information required by the ESRS may be incorporated into the sustainability statement by reference to another section of the management report, the financial statements, the corporate governance statement, the remuneration report, the universal registration document, Pillar 3 disclosures or an EMAS report (ESRS 1 paragraphs 119 and 121 of the 2023 set; 117 and 119 of the 2026 set). In the 2023 set, paragraph 120 sets five conditions: a separate, clearly identified element, publication before or with the management report, the same language, at least the same level of assurance and the same technical digitalisation requirements.

ESRS 1 paragraph 118 of the 2026 set lists five conditions in the same order, and its point (d) requires at least the same level of assurance as the rest of the statement, adding that "it is not required that the entire document containing the information is subject to assurance". That level is limited assurance only (Article 34(1)(aa) of Directive 2013/34/EU as replaced by Article 2(12)(a) of Directive (EU) 2026/470), and what the opinion covers is explained under assurance of CSRD reporting.

Table 2 sets the eligible documents and the five conditions of the two sets side by side.

Financial Year 2026: Stating Which Version Applies

For a financial year starting between 1 January and 31 December 2026, a company may prepare its statement under the 2023 set as amended by Delegated Regulation (EU) 2025/1416, under the 2026 set, or under the 2023 set with eight listed reliefs from the 2026 ESRS 1 (Article 2(1) of Delegated Regulation (EU) 2026/1563).

The eight reliefs of Article 2(1)(b), each a paragraph of the 2026 ESRS 1, are listed below.

• Paragraph 27: top-down materiality assessment.
• Paragraphs 32 to 33: undue cost or effort, value chain in the assessment.
• Paragraphs 74 to 75: acquisitions and disposals.
• Paragraph 90: non-significant activities.
• Paragraph 91: partial value-chain scope.
• Paragraph 92: joint operations.
• Paragraph 106: Taxonomy disclosures in a separate appendix.
• Paragraph 110: executive summary.

Under Article 2(2), the statement for that year must clearly state which version the undertaking applies. Delegated Regulation (EU) 2026/1563 enters into force on 10 November 2026, and the 2026 set is mandatory for financial years beginning on or after 1 January 2027; what changed is set out under the revised (simplified) ESRS version.

Publication within 12 Months and the Electronic Format

The management report, sustainability statement included, is published within a reasonable period not exceeding 12 months after the balance sheet date, together with the assurance opinion (Article 30(1) of Directive 2013/34/EU as replaced by Directive (EU) 2022/2464). The same provision requires the electronic format of Article 29d where applicable.

Article 29d, as replaced by Article 2(9) of Directive (EU) 2026/470, requires the management report in the format of Article 3 of Delegated Regulation (EU) 2019/815 and the sustainability reporting marked up in that format, then adds: "Until such rules on the marking-up are adopted by way of that Delegated Regulation, undertakings shall not be required to mark up their sustainability reporting". As of 29 October 2026, no such rules exist, because the amendments of Delegated Regulation (EU) 2019/815 to date (2019/2100, 2020/1989, 2022/352, 2022/2553, 2025/19 and 2026/283) concern the IFRS-based taxonomy only.

ESMA plans a Consultation Paper on the ESEF regulatory technical standards for sustainability reporting for the first quarter of 2027, according to its Annual Work Programme 2027, a plan, not an act. An earlier ESMA consultation, open from 13 December 2024 to 31 March 2025, has no final report, and where publication fits in the year is laid out in the step-by-step CSRD reporting plan up to publication.

Sustainability Statement Examples: What the First Assured Statements Show

EFRAG's State of Play 2026 report analysed 905 assured sustainability statements for financial year 2025, published between 1 January and 20 April 2026. The report gives two figures on length.

• The average statement fell from 115 to 95 pages.
• The statement makes up about 34 % of the annual report.

Each statement is published inside a management report, so examples are found in annual reports, not in stand-alone documents. FY 2025 statements were prepared under the 2023 set (Delegated Regulation (EU) 2023/2772, as amended by Delegated Regulation (EU) 2025/1416), because the 2026 set is only available from financial years starting in 2026 (Art. 2(1) Delegated Regulation (EU) 2026/1563).

The materiality and topic figures of the same report are covered under what the first statements show across the ESRS.

The Statement in Depth: Two Detailed Pages

Two parts of the sustainability statement have their own pages here: the electronic format and mark-up of the statement, and the EU Taxonomy Article 8 disclosure it contains. Table 3 names each page with its key value.

What the Sustainability Statement Is Not

The sustainability statement is not a stand-alone sustainability report, a mission statement or a document every company must publish: it is a legal section of the management report of undertakings within the CSRD scope.

Is a Stand-Alone Sustainability Report Enough?

No: under the CSRD the information must sit in the dedicated section of the management report, and Member States may no longer exempt undertakings that publish a separate report.

Under the earlier Directive 2014/95/EU, Member States could exempt companies that published a separate report together with the management report, or on their website within six months of the balance sheet date (Article 19a(4) of Directive 2014/95/EU). Articles 1(4) and 1(7) of Directive (EU) 2022/2464 replaced Articles 19a and 29a of Directive 2013/34/EU, and with them that option.

Do Companies Outside the Scope Prepare One?

No: an undertaking that does not exceed both values has no duty to prepare a sustainability statement under Directive 2013/34/EU as amended by Directive (EU) 2026/470.

Companies outside the scope may report voluntarily under the voluntary standard (VS, formerly VSME), Delegated Regulation (EU) 2026/1560. Its modules are set out under the voluntary standard for companies outside the scope.