GRI Updated ESRS-Professional Exam Questions and Answers by benny

Thegoal of assurancein sustainability reporting is toconfirm the reliabilityof sustainability disclosures, ensuring that reported information onrisks, management strategies, and performance dataisaccurate and verifiable.

Key aspects ofsustainability assuranceinclude:

Evaluating the credibility of reported sustainability risksand how organizations manage them.

Assessing compliance with CSRD and ESRS assurance requirements.

Ensuring data integrity and alignmentwith financial and sustainability disclosures.

Enhancing investor confidencein an organization’s sustainability reporting​.

CSRD and ESRS Assurance Requirements (Commission Delegated Regulation (EU) 2023/2772, Section 5.2)- Specifies assurance requirements for sustainability reporting​.

EU Sustainable Finance Platform Report (2025)- Confirms assurance processes are necessary to enhance trust in sustainability data​.

Official References:

TheCorporate Sustainability Reporting Directive (CSRD)significantly strengthens sustainability reporting and assurance requirements compared to theNon-Financial Reporting Directive (NFRD). The key shift introduced by CSRD is themandatory assurance of sustainability reports, which includesdefined standards, scope, and providers.

Key Differences Between CSRD and NFRD:Feature

NFRD (Previous Directive)

CSRD (New Directive)

Assurance Requirement

Voluntary

Mandatory

Who Can Provide Assurance?

Organizations could choose any provider

Member States decide between statutory auditors and independent assurance providers

Assurance Scope

Limited guidance

Defined ESRS-based scope

Assurance Level

No formal requirement

Limited assurance initially, transitioning to reasonable assurance by 2028

Reporting Scope

Limited to large public-interest entities

Expanded to all large companies and listed SMEs

Disclosure Framework

High-level requirements

Detailed ESRS framework with sector-specific standards

Mandatory Assurance:

Unlike the NFRD, the CSRDrequires sustainability reports to be assuredby an independent external provider.

The assurance process followsESRS standardsto ensure consistency​.

Defined Standards and Scope:

CSRD specifies thescope of assurance, focusing onmaterial sustainability disclosures, governance, andrisk disclosures.

TheEuropean Commissionis developing a standard methodology for assurance​.

Transition to Reasonable Assurance:

Initially,limited assuranceis required.

ByOctober 2028, the EU aims to transition toreasonable assurance, aligning sustainability assurance with financial audits​.

Option A: Incorrect – TheCSRD makes assurance mandatory, whereas theNFRD had a voluntary approach.

Option B: Incorrect – TheCSRD does not eliminate sustainability reporting assurance; it makes it morestructured and rigorous.

Key Provisions of the CSRD:Why Other Answers Are Incorrect:Thus, thecorrect answer is C:The CSRD introduces mandatory assurance for ESRS reporting, with defined requirements for scope, standards, and providers.

Official References:

CSRD Directive (EU) 2022/2464– Assurance Provisions​.

EU Platform on Sustainable Finance Report (February 2025)– Assurance and Compliance Guidelines​.

CEAOB Guidelines on Assurance of Sustainability Reporting (2024)– Limited Assurance Transitioning to Reasonable Assurance​.

UnderESRS 2 and topical ESRS,external assurance is not required for all information reported. Instead, assurance requirements depend onspecific regulatory obligations and the phase-in periods set by the Corporate Sustainability Reporting Directive (CSRD).

Limited Assurance Requirement Initially

CSRDmandates limited assuranceover sustainability information at first, withreasonable assurance (more stringent) to follow in later years​.

However,not all data points require assurance—only those specifically outlined in theEuropean Commission's assurance framework.

Mandatory Assurance for Some Disclosures

ESRS 2 covers general disclosures, but only certainmetrics and targets under specific topical ESRS require external assurance.

Appendix C of ESRS 2 outlines which disclosures require assurance​.

Entity-Specific Exemptions & Phase-in Rules

Some disclosuresdo not require assurance if they are deemed immaterialbased on themateriality assessment​.

SMEs and first-time reportershavephased-in assurance requirements.

Thus,external assurance is not required for all ESRS 2 and topical ESRS disclosures, making the statementTrue.

Commission Delegated Regulation (EU) 2023/2772​

Compilation Explanations January - November 2024​

Official References:

TheCorporate Sustainability Reporting Directive (CSRD)replaced theNon-Financial Reporting Directive (NFRD)to address itslimitationsin scope and reporting requirements. Below are the explanations for each option:

A. False– The NFRDdid notrequire all companies in the EU to include a non-financial statement. Instead, itapplied only to large public-interest entitieswith 500 or more employees.

B. True– The NFRD applied tolarge public-interest entities, includinglisted companies, banks, and insurance firms with more than 500 employees​.

C. False– The NFRDdid not mandate external assurancefor sustainability information. TheCSRD introduced mandatory assuranceat the EU level​.

D. False– The CSRDdid not replace the NFRD; rather, itexpanded and strengthened reporting requirements. TheNFRD was replaced by the CSRD, but not the other way around​.

E. True– TheCSRD was introduced to improve the scope and depth of sustainability reportingcompared to the NFRD. Itexpanded the number of entities required to report, standardized disclosures via ESRS, and introduced third-party assurance requirements​.

Key Differences Between CSRD and NFRDFeature

NFRD (Old Directive)

CSRD (New Directive)

Scope

Large public-interest entities (500+ employees)

All large companies + listed SMEs

Assurance

Not required

Mandatory external assurance

Disclosure Requirements

Limited sustainability disclosures

Comprehensive ESRS-based reporting

Reporting Standards

No standardized framework

ESRS-based mandatory framework

Application Date

In force since 2018

Applies from 2024 onwards

CSRD Directive (EU) 2022/2464– Assurance & Reporting Provisions​.

ESRS Compilation Explanations January - November 2024​.

Official References: