ESRS-Professional Exam Questions and Answers

QUESTION: 9

Which of the following best describes the purpose of Step A in the double materiality assessment process?

Identify specific disclosure requirements to report.
Conduct a financial materiality assessment.
Understand the organization's context, activities, and stakeholders.
Report the outcomes of the materiality assessment.

Answer(s): C

Explanation:

Step A in the double materiality assessment process is the initial stage where an organization establishes a foundational understanding of its business context, activities, and stakeholder relationships. This step is critical in identifying how the entity interacts with environmental, social, and governance (ESG) matters and lays the groundwork for further impact and financial materiality assessments.
The double materiality concept in the ESRS framework requires organizations to evaluate both:
Impact materiality How an organization's activities impact people and the environment. Financial materiality How sustainability matters influence the organization's financial position, performance, and cash flows.
Key Aspects of Step A in Double Materiality Assessment:
Identifying the business environment: Understanding industry-specific sustainability challenges, regulatory requirements, and stakeholder expectations. Recognizing affected stakeholders: Engaging internal and external stakeholders to determine which sustainability matters are relevant.
Defining dependencies and risks: Evaluating the organization's dependencies on natural, social, and human capital, and how these can influence business outcomes. Understanding sector and geographical relevance: Assessing which sustainability issues are most significant based on where the company operates.
Step A does not yet involve selecting specific disclosure requirements (Step B) or conducting a financial materiality assessment (Step C). Instead, it provides the contextual framework necessary for subsequent steps in the materiality process.
Official

Reference:

Commission Delegated Regulation (EU) 2023/2772, ESRS 1, Section 3.1 Defines stakeholders' role in materiality assessment.
EFRAG Compilation Explanations January - November 2024 Provides guidance on applying double materiality and the importance of Step A.
EFRAG IG 1 Materiality Assessment, Chapter 2.2 Outlines Step A as the process of understanding business activities, stakeholders, and sustainability context. Thus, the correct answer is C. Understand the organization's context, activities, and stakeholders.

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QUESTION: 10

EcoFurniture Inc., an organization producing eco-friendly furniture, is conducting Step B of its double materiality assessment. During this step it identifies potential deforestation impacts in its upstream value chain due to its timber sourcing and reputational risks related to environmental standards compliance.
Which of the following actions should EcoFurniture take during Step B to ensure a comprehensive assessment of its actual and potential IROs? Select all that apply.

Screen sustainability matters listed in ESRS 1 AR 16 and compare them to its entity-specific sustainability matters.
Conduct stakeholder engagement with local communities near timber supply locations.
Ignore potential risks in the downstream value chain, as they are less material.
Use scientific research to validate sustainability trends and risks in the forestry sector.

Answer(s): A,B,D

Explanation:

EcoFurniture Inc. is performing Step B of its double materiality assessment under ESRS, which involves identifying and assessing impacts, risks, and opportunities (IROs) from both an impact materiality and financial materiality perspective.
During Step B, the organization must:
Compare entity-specific sustainability matters to ESRS 1 AR 16 Screening sustainability matters listed in ESRS 1 AR 16 ensures that EcoFurniture Inc. identifies all potential material topics and aligns them with its specific sustainability context.
Action: (A) is correct
Engage with affected stakeholders
Stakeholder engagement is a key requirement in the ESRS double materiality process, especially for industries with environmental and social impacts, such as deforestation risks in EcoFurniture's timber sourcing.
ESRS 2 IRO-1 explicitly states that stakeholder engagement is necessary to validate materiality assessments.
Action: (B) is correct
Consider downstream impacts
ESRS mandates assessing both upstream and downstream sustainability impacts. Ignoring potential risks in the downstream value chain is not aligned with ESRS requirements.
Action: (C) is incorrect
Use scientific research to validate sustainability trends and risks The use of scientific evidence is an essential part of assessing sustainability matters. ESRS encourages leveraging research and external data to confirm industry-specific sustainability risks.
Action: (D) is correct
Conclusion:
EcoFurniture Inc. must integrate stakeholder engagement, scientific research, and systematic comparison of sustainability matters to ESRS requirements to ensure a robust Step B materiality assessment. Ignoring the downstream value chain is not permissible under ESRS.

Official

Reference:

Commission Delegated Regulation (EU)
Compilation Explanations January - November 2024

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QUESTION: 11

Which of the following is true about setting thresholds for financial materiality under the ESRS?

Organizations should only use monetary thresholds, such as revenue or costs.
Financial materiality thresholds are based on the likelihood of occurrence and the potential magnitude of financial effects.
Reputational risks cannot be considered financially material.
Thresholds should focus exclusively on the short-term time horizon.

Answer(s): B

Explanation:

Under the ESRS framework, financial materiality is assessed based on a combination of:
Likelihood of occurrence The probability that a sustainability matter will have a financial impact. Potential magnitude of financial effects The scale of the impact on financial position, performance, cash flows, access to finance, or cost of capital over short-, medium-, or long-term periods. This is outlined in ESRS 1, which states that a sustainability matter is financially material if it could reasonably be expected to trigger material financial effects on an undertaking. Financial materiality is not limited to issues under the direct control of the company; it includes dependencies on natural, human, and social resources that could create risks or opportunities.
Why the other options are incorrect:
Option A: The ESRS framework allows for both qualitative and quantitative thresholds, not just monetary ones (e.g., revenue or costs).
Option C: Reputational risks can be financially material, as they may affect access to finance, cost of capital, or customer trust, ultimately influencing the company's financial performance. Option D: The financial materiality assessment is conducted for the short-, medium-, and long-term, not just the short term.

Reference:

Commission Delegated Regulation (EU)
Compilation Explanations January - July 2024, ESRS 1 on Financial Materiality EFRAG Guidance on Double Materiality and Risk Assessments

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QUESTION: 12

Indicate whether the following statement is true or false. Entity-specific disclosures are required if a material sustainability matter is not covered or sufficiently detailed in the ESRS.

True
False

Answer(s): A

Explanation:

Entity-specific disclosures are required if a material sustainability matter is not covered or sufficiently detailed in the ESRS. According to ESRS 1, paragraph 11, if an undertaking identifies an impact, risk, or opportunity that is not adequately covered by an ESRS but is material due to its specific facts and circumstances, it must provide additional entity-specific disclosures. This ensures that users of sustainability reports receive relevant and complete information.
Key Provisions from ESRS:
ESRS 1, paragraph 11:

Requires entity-specific disclosures when material sustainability matters are missing or not sufficiently covered in the ESRS.
ESRS 1, paragraph 30:
Mandates that companies must disclose additional entity-specific disclosures if material matters are not covered with sufficient granularity in ESRS.
ESRS 1, Appendix A (Application Requirements):
Provides further guidance on entity-specific disclosures, ensuring consistency and comparability while allowing companies to disclose material matters not addressed by ESRS. ESRS 2, Disclosure Requirements (SBM-3, IRO-1, GOV-1 to GOV-5):
Outlines the minimum disclosure requirements that apply when companies make entity-specific disclosures related to governance, strategy, impacts, risks, and opportunity management. Thus, if a sustainability matter is deemed material and is not sufficiently addressed by ESRS, entity- specific disclosures are mandatory.
Official

Reference:

Commission Delegated Regulation (EU) 2023/2772, ESRS 1, Paragraphs 11 and 30. ESRS Implementation Q&A Platform Compilation of Explanations January November 2024.

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QUESTION: 13

Indicate whether the following statement is true or false. In the ESRS, impact materiality is considered the starting point for the double materiality assessment because material impacts may trigger financial risks and opportunities in the future.

True
False

Answer(s): A

Explanation:

Impact materiality is indeed considered the starting point for the double materiality assessment in the ESRS. The reason is that material impacts on sustainability matters can generate financial risks and opportunities in the future. The ESRS framework follows this structure because:
Interrelation Between Impact and Financial Materiality Double materiality includes two dimensions:
a) Impact materiality (how the company affects people and the environment).

b) Financial materiality (how sustainability matters affect the company's financial performance). Impact materiality assessments often precede financial materiality because many sustainability issues initially manifest as external environmental and social impacts before affecting the company's financial results.
Regulatory Confirmation of Impact as the Starting Point According to ESRS 1, section 3.3, impact materiality is typically assessed first, unless a financial risk or opportunity exists independently of an impact.
A sustainability matter may become financially material over time due to regulatory changes, evolving market expectations, or direct financial consequences.
Illustration of the Double Materiality Process
Example: A company engaged in high carbon emissions might initially consider this an impact materiality issue (environmental harm). However, increased carbon pricing, regulatory changes, and shifting investor preferences can later transform this into a financial materiality issue.
Conclusion:
Since impact materiality serves as a precursor to financial materiality in most cases, the statement is true.
Official Commission Delegated Regulation (EU) 2023/2772, various EFRAG guidance documents, and CSRD-related references:
Commission Delegated Regulation (EU) 2023/2772, ESRS 1, Section 3.3: Double Materiality Framework.
EFRAG Compilation of Explanations (January - July 2024): Confirmation that impact materiality assessment is the typical entry point.

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QUESTION: 14

Which of the following can organizations use to identify actual and potential IROs during Step B of the double materiality assessment process? Select all options that apply.

The list of sustainability matters in ESRS 1 AR 16
Financial materiality thresholds
Due diligence processes
Feedback from stakeholders

Answer(s): A,C,D

Explanation:

During Step B of the double materiality assessment process, organizations must identify actual and potential impacts, risks, and opportunities (IROs). The ESRS framework recommends the following methods:
A . The list of sustainability matters in ESRS 1 AR 16 ESRS 1 Application Requirement (AR) 16 provides a comprehensive reference list of sustainability matters to consider when identifying IROs.
This list includes environmental, social, and governance topics aligned with EU sustainability objectives.
C . Due diligence processes
ESRS requires organizations to use due diligence processes to identify negative sustainability impacts. Due diligence aligns with frameworks such as the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights. This ensures that potential risks and opportunities are assessed based on international sustainability standards.
D . Feedback from stakeholders
Stakeholders, including employees, suppliers, customers, and affected communities, provide crucial insights into sustainability impacts.
ESRS mandates engagement with affected stakeholders as part of the IRO identification process.
Why is B. Financial materiality thresholds incorrect? Financial materiality thresholds apply later in the process (Step C) when evaluating the financial impact of sustainability matters.
Step B focuses only on identifying IROs, making financial thresholds irrelevant at this stage.

Conclusion:
Organizations should use the ESRS 1 AR 16 sustainability matters list, due diligence processes, and stakeholder feedback to identify IROs in Step B of the double materiality assessment. Financial materiality thresholds do not apply in this step.
Official Commission Delegated Regulation (EU) 2023/2772, various EFRAG guidance documents, and CSRD-related references:
Commission Delegated Regulation (EU) 2023/2772, ESRS 1, AR 16: List of Sustainability Matters for Identifying IROs.
EFRAG Compilation of Explanations (January - July 2024): Confirmation that due diligence and stakeholder input are part of IRO identification.

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QUESTION: 15

Which internal department is primarily responsible for providing information on building energy use and the environmental performance of physical infrastructure?

Operations
Facilities Management
R&D and Product Development
Legal and Compliance

Answer(s): B

Explanation:

The Facilities Management (FM) department is primarily responsible for providing information on building energy use and the environmental performance of physical infrastructure.
Key responsibilities include:
Energy management: Tracking energy consumption and implementing efficiency measures. Sustainability initiatives: Managing green building certifications, renewable energy installations, and environmental compliance.
Infrastructure monitoring: Overseeing heating, ventilation, and air conditioning (HVAC) systems, lighting efficiency, and water usage.
While the Operations department may use energy-related data for broader business functions, Facilities Management specializes in monitoring and improving building performance from an environmental perspective.

Official

Reference:

ESRS E1 Climate Change, Disclosure Requirement E1-5 - Specifies requirements for energy consumption and environmental impacts of buildings.
EFRAG Guidance on Environmental Performance and Building Energy Use - Confirms that FM is responsible for infrastructure sustainability monitoring.

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QUESTION: 16

Which of the following statements about ESRS 2 are correct? Select all that apply.

ESRS 2 is a sector-agnostic, cross-cutting standard applicable to all organizations.
Reporting organizations don't have to address all disclosure requirements in ESRS 2.
Certain disclosure requirements in ESRS 2 are subject to a phase-in period.

Answer(s): A,C

Explanation:

ESRS 2 is a cross-cutting, sector-agnostic standard (Option A) ESRS 2 applies to all undertakings, regardless of sector or industry. It establishes general disclosures that cover governance, strategy, materiality, risks, and sustainability metrics.
Certain ESRS 2 disclosure requirements are subject to a phase-in period (Option C) Some disclosure requirements have been phased in for companies with fewer than 750 employees, allowing gradual adoption.
For instance, disclosures related to biodiversity (ESRS E4), workforce (ESRS S1-S4), and pollution (ESRS E2) can be omitted for the first 1-2 years, depending on company size.
Incorrect

Answer(s):
B . Reporting organizations don't have to address all disclosure requirements in ESRS 2 This is incorrect because ESRS 2 disclosures are mandatory for all reporting organizations. Only topical ESRS requirements depend on materiality assessments.
Official

Reference:

Commission Delegated Regulation (EU) 2023/2772, ESRS 2 - Defines ESRS 2 as a sector-agnostic, cross-cutting standard.
EFRAG Compilation Explanations (JanuaryJuly 2024), Appendix C - Lists ESRS 2 disclosures with phase-in provisions.

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GRI ESRS-Professional Exam (page: 2) GRI ESRS Professional Certification Updated on: 12-Feb-2026

QUESTION: 9

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QUESTION: 10

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QUESTION: 11

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QUESTION: 12

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QUESTION: 13

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QUESTION: 14

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QUESTION: 15

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QUESTION: 16

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GRI ESRS-Professional Exam (page: 2)
GRI ESRS Professional Certification
Updated on: 12-Feb-2026