ESG and Sustainability Reporting with ERP: CSRD and GRI Standards

Environmental, Social, and Governance (ESG) reporting has transformed from a voluntary corporate communications exercise into a mandatory compliance obligation for thousands of companies globally. The EU Corporate Sustainability Reporting Directive (CSRD) requires companies meeting specific thresholds to report against the European Sustainability Reporting Standards (ESRS), with the first reports due in 2025 for large companies. Simultaneously, frameworks including the Global Reporting Initiative (GRI), TCFD, ISSB/IFRS S1+S2, and national equivalents create a dense reporting landscape that ERP systems must increasingly support.

This guide covers how ERP systems — particularly modern platforms like Odoo 19 — can serve as the data backbone for ESG reporting, covering data collection across operations, supply chain, HR, and finance to produce CSRD-compliant disclosures.

Key Takeaways

• EU CSRD mandatory reporting: large companies from financial year 2024 (published 2025); small and medium-sized listed companies from 2026; third-country companies with significant EU turnover from 2028
• ESRS (European Sustainability Reporting Standards) cover environmental, social, and governance topics — double materiality assessment determines which topics apply
• Scope 1, 2, and 3 greenhouse gas emissions must be reported under ESRS E1; Scope 3 (value chain) is particularly complex and requires supply chain data
• GRI Standards remain a widely used voluntary framework — many organisations report against both GRI and ESRS given substantial overlap
• ERP data sources for ESG: procurement records (supply chain emissions), energy consumption (facility management), HR records (workforce metrics), waste and water management, financial performance
• Limited assurance on CSRD reports is required initially; reasonable assurance requirement enters from 2028
• Non-compliance with CSRD can result in administrative sanctions, prohibition of certain business activities, and fines
• Integrating ESG data collection into ERP workflows is more reliable than manual Excel-based approaches

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The ESG Reporting Regulatory Landscape

EU Corporate Sustainability Reporting Directive (CSRD)

CSRD (Directive 2022/2464/EU) replaces the Non-Financial Reporting Directive (NFRD) and significantly expands mandatory sustainability reporting in the EU. Key aspects:

Who must comply:

Extraterritorial reach: The third-country provision means non-EU multinationals with significant EU business must comply — this affects many US, UK, Asian, and Middle Eastern companies with European operations.

What must be reported: Reports against the European Sustainability Reporting Standards (ESRS), embedded in the annual management report and audited. Digital tagging (XBRL) required for machine-readable reporting.

Limited assurance: Initially required; reasonable assurance requirement phased in from 2028.

European Sustainability Reporting Standards (ESRS)

ESRS are issued by the European Financial Reporting Advisory Group (EFRAG) and adopted by the European Commission. The cross-cutting standards apply to all companies:

Cross-cutting ESRS:

• ESRS 1: General Requirements
• ESRS 2: General Disclosures (mandatory for all CSRD-scope companies)

Topic-specific ESRS (apply based on materiality assessment):

• Environmental: E1 (Climate Change), E2 (Pollution), E3 (Water and Marine Resources), E4 (Biodiversity and Ecosystems), E5 (Resource Use and Circular Economy)
• Social: S1 (Own Workforce), S2 (Workers in Value Chain), S3 (Affected Communities), S4 (Consumers and End-Users)
• Governance: G1 (Business Conduct)

Global Reporting Initiative (GRI)

GRI is a not-for-profit organisation providing the world's most widely used sustainability reporting standards. As of 2023, over 10,000 organisations report using GRI standards annually. GRI 2021 Universal Standards (GRI 1, 2, 3) replaced the old foundation standards. Topic-specific standards cover: economic performance, anti-corruption, emissions, energy, water, waste, employment, diversity, and many more.

GRI vs ESRS: Substantial overlap in data requirements. GRI remains voluntary but is accepted by the EU Commission as a voluntary reporting option for non-CSRD companies. Many companies reporting under CSRD also align with GRI for international recognition.

Other Relevant Frameworks

TCFD (Task Force on Climate-related Financial Disclosures): Climate risk disclosure framework becoming mandatory in multiple jurisdictions (UK, NZ, Singapore, Hong Kong). ESRS E1 substantially incorporates TCFD requirements.

ISSB/IFRS S1 and S2: The International Sustainability Standards Board (ISSB) issued IFRS S1 (general requirements) and IFRS S2 (climate-related disclosures) in 2023. Adopted or being adopted in Australia, Canada, Japan, Singapore, UK, and other jurisdictions. Capital markets-focused.

CDP (Carbon Disclosure Project): Major platform for company disclosure to investors. Questions aligned with TCFD.

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Double Materiality: The Foundation of ESRS Reporting

ESRS 1 requires companies to perform a double materiality assessment to determine which sustainability topics require disclosure. A topic is material if it is material from:

Impact materiality perspective: Does the company have significant actual or potential positive or negative impacts on people or the environment? (Outside-in: how does the company affect the world?)

Financial materiality perspective: Does the sustainability topic create material financial risks or opportunities for the company? (Inside-out: how does the environment/society affect the company?)

A topic is material if it is material from either perspective. A topic is doubly material if it qualifies from both perspectives.

Conducting the double materiality assessment:

1. Identify the full universe of ESRS sustainability topics relevant to your industry and business model
2. Engage stakeholders (employees, customers, communities, investors) to understand their concerns
3. Assess actual and potential impacts (severity: scale, scope, irremediability × likelihood for potential impacts)
4. Assess financial risks and opportunities (likelihood × magnitude of financial effect)
5. Apply quantitative or qualitative thresholds to determine materiality
6. Document the assessment methodology, inputs, and results

The double materiality assessment determines which ESRS topic standards apply and which disclosures are required. ESRS E1 (Climate Change) is expected to be material for most companies; other topics depend on industry and business model.

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ERP as the ESG Data Backbone

Scope 1, 2, and 3 Emissions

Scope 1 — Direct emissions: Combustion in company-owned assets (natural gas for heating, company vehicle fleet, manufacturing process emissions). ERP data sources: fuel purchase records, fleet management, energy consumption meters.

Scope 2 — Indirect emissions from purchased energy: Electricity, heat, steam, cooling purchased from utilities. ERP data sources: utility invoices (accounts payable module), energy meter readings, facility management data.

Scope 3 — Value chain emissions (most complex): 15 categories including purchased goods and services (Category 1), capital goods (2), fuel- and energy-related activities (3), upstream transportation (4), waste generated (5), business travel (6), employee commuting (7), upstream leased assets (8), downstream transportation (9), processing of sold products (10), use of sold products (11), end-of-life treatment (12), downstream leased assets (13), franchises (14), investments (15).

ERP data sources for Scope 3:

Emissions calculation approach: Multiply activity data (kWh, km, tonnes) by emission factors. Use:

• GHG Protocol Corporate Accounting and Reporting Standard (required by ESRS E1)
• IEA electricity emission factors by country
• DEFRA/BEIS emission factors (UK)
• EPA emission factors (US)
• Ecoinvent database for detailed LCA emission factors

HR and Social Data from ERP

ESRS S1 (Own Workforce) requires extensive workforce data:

Procurement and Supply Chain Data

ESRS E1 Scope 3 Category 1 (purchased goods) and ESRS S2 (workers in value chain) require supply chain data. ERP procurement modules are the primary data source:

• Supplier spend by category (categorised by emission-intensive sectors)
• Supplier country (for geographic emission factors)
• Supplier sustainability assessments (can be integrated with supplier portals)
• Material content of purchased goods (for product lifecycle assessments)

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Configuring ERP for ESG Reporting

Odoo ESG Data Collection Configuration

Odoo's modular structure supports ESG data collection across multiple modules:

Environmental data collection:

• Accounting/Invoices: Tag utility invoices with energy type and consumption unit data; configure accounts for energy cost tracking; link invoices to emission calculations
• Fleet module: Track vehicle types, fuel consumption, mileage; calculate fleet emissions
• Purchase module: Add sustainability categorisation to product categories; tag purchases with emission-intensity ratings; supplier sustainability rating field
• Manufacturing: Track material consumption, waste generation by batch/product

Social/HR data collection:

• Employees module: Add ESG-relevant fields (gender, ethnicity where legally permitted and relevant, employment type, accessibility accommodations)
• Payroll: Configure for gender pay gap analysis by adding comparison fields and report templates
• Time off management: Track parental leave uptake and return rate
• Training: Track hours and ESG-related training completion

Governance data:

• Contacts (Board/leadership): Maintain board composition data including gender, independence, tenure
• Expense management: Track business travel with transport mode for Scope 3 Category 6

ESG Data Quality Requirements

ESRS 1 imposes data quality requirements — reported information must be:

• Relevant: Useful to stakeholders for assessing sustainability performance
• Faithful representation: Complete, neutral, free from error
• Comparable: Consistent across time periods and comparable to peers
• Verifiable: Supportable with evidence
• Understandable: Clear and concise

For ERP-sourced ESG data, this requires:

• Clear data governance (who enters data, how it is validated)
• Version control for emission factors and calculation methodologies
• Audit trail (who entered what data, when, and based on what source documents)
• Reconciliation to invoices/primary sources

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CSRD Reporting Process with ERP

Timeline

January–March (data collection year):

• Collect prior year data from ERP systems
• Identify data gaps and estimate missing data (Scope 3 particularly)
• Reconcile ERP data to source documents

April–June:

• Calculate GHG emissions from activity data
• Run workforce metrics and social indicators
• Draft narrative disclosures for material ESRS topics
• Internal review with sustainability, finance, and legal

July–September:

• External assurance (limited assurance for CSRD initial years)
• Board/management review and approval
• Digital tagging (XBRL) for ESRS compliance

October–December:

• Publish sustainability report (integrated in annual management report or standalone)
• Submit to relevant registries/regulators
• Plan for following year: address data gaps identified

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GRI Standards — Key Disclosures

GRI Universal Standards (2021) require:

GRI 2: General Disclosures — Organisational profile, governance, strategy and policies, practices for engaging with stakeholders, remuneration, and reporting practice.

GRI 3: Material Topics — Double materiality process, list of material topics, management of each topic.

Topic-specific standards (apply based on materiality):

• GRI 302: Energy — Total energy consumption, energy intensity, reduction initiatives
• GRI 305: Emissions — Scope 1, 2, 3 GHG emissions, emission intensity, reduction targets
• GRI 306: Waste — Total waste generated, composition, disposal methods
• GRI 401: Employment — New hires, turnover, benefits
• GRI 405: Diversity and Equal Opportunity — Board composition, diversity targets
• GRI 403: Occupational Health and Safety — TRIR, LTIFR, fatalities
• GRI 206: Anti-Competitive Behaviour — Legal actions for anti-competitive practices
• GRI 205: Anti-Corruption — Training on anti-corruption, confirmed incidents

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ESG/CSRD Compliance Checklist

• CSRD applicability threshold analysis completed
• Double materiality assessment conducted and documented
• Material ESRS topics identified
• ERP data collection points mapped for each material ESRS disclosure
• Scope 1 emissions data collection configured (fuel, process)
• Scope 2 emissions data collection configured (utility invoices tagged)
• Scope 3 Category 1 emissions estimation methodology documented
• HR module fields configured for ESRS S1 workforce metrics
• Gender pay gap calculation methodology documented
• Supplier sustainability assessment process established
• Emission factor library established with source documentation
• ESG data quality governance process documented
• Audit trail configured for ESG data modifications
• External assurance engagement planned
• XBRL tagging capability assessed
• Board approval process for sustainability report established

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Frequently Asked Questions

Does CSRD apply to our non-EU company?

Possibly yes. From 2028, CSRD applies to third-country (non-EU) companies that generate over €150 million net turnover in the EU in each of the last two consecutive financial years and have at least one large EU subsidiary or EU branch generating over €40 million net turnover. Additionally, EU subsidiaries of non-EU groups that themselves qualify as large EU companies must comply from 2025 or 2026 depending on size. Many US, UK, Asian, and Middle Eastern multinationals with significant EU operations are affected.

What is the difference between GRI and ESRS?

GRI (Global Reporting Initiative) is a voluntary global framework used by over 10,000 organisations worldwide. ESRS (European Sustainability Reporting Standards) are mandatory EU standards for CSRD compliance, adopted as Delegated Regulation by the European Commission. There is significant conceptual overlap (both use double materiality, both cover E/S/G topics), and EFRAG intentionally aligned ESRS with GRI to reduce reporting burden. The main differences: ESRS is mandatory for CSRD-scope companies and has more specific data requirements; GRI is voluntary and more globally recognised. Many organisations will report against both simultaneously.

What is Scope 3 emissions and why is it so difficult?

Scope 3 covers all indirect emissions in a company's value chain — upstream (suppliers) and downstream (product use and end-of-life). It typically represents 70–90% of a company's total carbon footprint, but it is the hardest to measure because it depends on data from suppliers, customers, and third parties who may not measure or disclose their own emissions. Approaches for Scope 3: spend-based estimation (apply emission factors to supplier spend by category — easiest, least accurate), hybrid method (spend-based + supplier-specific data for largest suppliers), supplier questionnaires (direct data collection from key suppliers). Improving Scope 3 accuracy is a multi-year programme, not a one-time project.

How does limited assurance differ from reasonable assurance for CSRD?

Limited assurance is a lower standard than reasonable assurance. Under limited assurance (required initially for CSRD), the assurer's conclusion is "nothing has come to our attention" — negative assurance based on inquiry and analytical procedures. Under reasonable assurance (required from 2028 for CSRD), the assurer provides positive assurance that the disclosures are free from material misstatement, based on more extensive audit procedures including testing of controls. Reasonable assurance has similar rigour to a financial statement audit. The transition from limited to reasonable assurance will require significantly more evidence, documentation, and internal control quality from companies.

Can we use our ERP data directly for CSRD reporting?

Partially. ERP systems are excellent sources for quantitative data — financial metrics, procurement volumes, HR headcount, energy invoices — but rarely capture all ESG data requirements out of the box. You will need: (1) to configure ERP to capture ESG-specific fields (energy type, supplier sustainability categories, HR diversity fields); (2) to supplement with other systems (facility management for energy meters, travel booking for business travel, HR surveys for commuting); (3) to apply emission factors and calculation methodologies to raw ERP data outside the ERP or through ESG-specific add-on modules; (4) to manage data quality processes that ERP typically does not have natively for ESG purposes.

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Next Steps

ESG reporting is moving rapidly from competitive differentiator to compliance obligation. Building your ESG data infrastructure within your ERP system — rather than relying on manual spreadsheet collection — is the sustainable path to accurate, auditable, and efficient reporting.

ECOSIRE's Odoo implementation team helps organisations configure ERP systems for ESG data collection, design sustainability reporting workflows, and implement the data governance controls required for auditable CSRD disclosures.

Get started: ECOSIRE Odoo Services

Disclaimer: This guide is for informational purposes only and does not constitute legal or accounting advice. CSRD requirements and ESRS standards are subject to ongoing development by EFRAG and the European Commission. Consult qualified sustainability reporting advisors and legal counsel for advice specific to your organisation.