At ValidExamDumps, we consistently monitor updates to the GRI ESRS-Professional exam questions by GRI. Whenever our team identifies changes in the exam questions,exam objectives, exam focus areas or in exam requirements, We immediately update our exam questions for both PDF and online practice exams. This commitment ensures our customers always have access to the most current and accurate questions. By preparing with these actual questions, our customers can successfully pass the GRI ESRS Professional Certification Exam exam on their first attempt without needing additional materials or study guides.
Other certification materials providers often include outdated or removed questions by GRI in their GRI ESRS-Professional exam. These outdated questions lead to customers failing their GRI ESRS Professional Certification Exam exam. In contrast, we ensure our questions bank includes only precise and up-to-date questions, guaranteeing their presence in your actual exam. Our main priority is your success in the GRI ESRS-Professional exam, not profiting from selling obsolete exam questions in PDF or Online Practice Test.
Indicate whether the following statement is true or false.
Under the ESRS, organizations cannot leverage on their ongoing dialogue with stakeholders for the materiality assessment.
Under the European Sustainability Reporting Standards (ESRS), organizations can leverage their ongoing dialogue with stakeholders for the materiality assessment. The ESRS explicitly acknowledges that stakeholder engagement plays a fundamental role in assessing material impacts, risks, and opportunities.
Stakeholder Engagement is Central to Materiality Assessment
ESRS 1 and ESRS 2 emphasize that organizations should integrate stakeholder perspectives into their materiality assessments. Engagement with affected stakeholders is central to the undertaking's ongoing due diligence process and sustainability materiality assessment. This includes processes to identify and assess actual and potential negative impacts, which inform the identification of material sustainability topics.
ESRS Does Not Mandate a Specific Stakeholder Engagement Approach
While stakeholder input is considered valuable, the ESRS does not prescribe a mandatory format or behavior for engagement. Companies have flexibility in determining how they engage with stakeholders.
IG 1 Materiality Assessment FAQ 15 states: 'The ESRS require disclosure on the materiality assessment and its outcomes but do not mandate specific behavior on stakeholder engagement or the due diligence process.'.
Stakeholders Can Provide Objective Evidence
The materiality assessment should be based as much as possible on objective data and evidence, but stakeholder perspectives can be a source of supporting evidence for impact materiality.
The relevance of stakeholder input depends on how much they are affected by an organization's activities (severity and likelihood of impacts).
Due Diligence and Materiality Assessment
The due diligence process includes stakeholder engagement, which informs the materiality assessment. Organizations must report how they integrate stakeholder feedback into identifying and assessing material issues.
Nature as a Silent Stakeholder
The ESRS even recognizes that ecological data and conservation indicators should be considered as proxy indicators for stakeholder engagement where human stakeholders are absent (e.g., in cases of biodiversity impact assessments).
Thus, the statement in the question is false. Organizations are encouraged to utilize their existing stakeholder engagement mechanisms to inform their materiality assessments under ESRS.
Official Reference:
Commission Delegated Regulation (EU) 2023/2772.
Compilation Explanations January - November 2024.
ESRS 1 & 2 Guidelines on Double Materiality.
Select all the correct steps for conducting a double materiality assessment based on the ESRS.
The double materiality assessment involves identifying sustainability matters that are material either from:
An impact perspective (the organization's effects on people and the environment).
A financial perspective (how sustainability matters affect the organization financially).
The correct steps in conducting this assessment include:
(A) Comparing identified material topics with ESRS 1 AR 16 -- This ensures alignment with predefined sustainability matters in ESRS.
(C) Using ESRS 2 IRO-1 -- This disclosure requirement mandates companies to report on their methodology for identifying impacts, risks, and opportunities.
(D) Following SBM-3 of ESRS 2 -- This section provides requirements for disclosing the material impacts, risks, and opportunities identified through the materiality assessment.
Why the other options are incorrect:
(B) False: Entity-specific disclosures must cover all material sustainability topics, even those not explicitly covered in ESRS.
(E) False: Both financial and impact materiality must be considered (double materiality), not just financial materiality.
(F) False: Double materiality assessments are mandatory for all organizations reporting under ESRS.
Commission Delegated Regulation (EU) 2023/2772, Section 3.3 on Double Materiality
EFRAG Compilation on Double Materiality Assessments, providing step-by-step guidance on ESRS compliance
Which of the following statements about ESRS 2 are correct? Select all that apply.
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:
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 (January--July 2024), Appendix C - Lists ESRS 2 disclosures with phase-in provisions.
Which of the following correctly fills the gaps in the paragraph below?
ESRS 2 IRO-1 mandates organizations to disclose their process to identify __________ and assess their materiality, including if and how consultation with __________ informed the outcome of the process. Because most __________ arise from impacts, impact materiality is often the starting point for __________.
ESRS 2 IRO-1 requires organizations to disclose their process for identifying impacts, risks, and opportunities and assess their materiality. This includes detailing whether and how affected stakeholders were consulted during the process. Since risks and opportunities typically stem from impacts, the process of impact materiality assessment serves as a natural starting point before evaluating their financial materiality.
Identification of Impacts, Risks, and Opportunities (IROs):
Organizations must disclose their methodology for identifying material impacts, risks, and opportunities.
These include both actual and potential impacts on people and the environment, considering short-, medium-, and long-term horizons.
Consultation with Affected Stakeholders:
ESRS 2 IRO-1 requires disclosure of whether and how the consultation with affected stakeholders influenced the identification of material sustainability matters.
Stakeholder engagement is crucial in determining the scope and severity of sustainability impacts.
Role of Impact Materiality:
Impact materiality assessment precedes the evaluation of risks and opportunities.
Since most risks and opportunities originate from impacts, impact materiality serves as the starting point for assessing their financial materiality.
Financial Materiality Evaluation:
Financial materiality pertains to the extent that a sustainability matter affects the undertaking's financial position, performance, cash flows, or cost of capital.
It evaluates whether an impact or risk could reasonably be expected to have a material financial effect on the organization.
Why is B the Correct Answer?
'Impacts, risks, and opportunities' correctly defines the scope of ESRS 2 IRO-1.
'Affected stakeholders' are explicitly referenced as a crucial element in the disclosure process.
'Risks and opportunities' emerge from sustainability impacts, making impact materiality the logical starting point.
'Financial materiality' is the final step, determining the financial significance of sustainability risks and opportunities.
Thus, the correct sequence is B: impacts, risks, and opportunities; affected stakeholders; risks and opportunities; financial materiality.
Official Commission Delegated Regulation (EU) 2023/2772, various EFRAG guidance documents, and CSRD-related references:
Commission Delegated Regulation (EU) 2023/2772, Annex I: ESRS 2 IRO-1 materiality assessment requirements.
EFRAG Compilation of Explanations (January - November 2024): Explanation of ESRS 2 IRO-1 and its link to impact materiality.
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.
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) 2023/2772
Compilation Explanations January - November 2024
