The EU Pay Transparency Directive (EU PTD) is designed to accelerate progress toward pay parity. It requires employers to provide detailed pay metrics, share clearer information about pay and progression, and strengthen rights for employees and job applicants. EU countries had to transpose the Directive into domestic legislation by 7 June 2026. With that milestone now behind us, the focus shifts to delivery, and the countdown to the first reporting deadline has begun.
However, this isn’t the kind of information you can pull together at the last minute. Achieving compliance with the EU Pay Transparency Directive requirements relies on getting the foundations right, from accurate data and internal clarity on job structures to strong governance, documentation and a long-term plan for what to do if data gaps emerge.
Background To The EU PTD
Slow progress, mixed rules and uneven rollout
The EU PTD entered into force in June 2023, against a backdrop of uneven pay transparency rules across Europe. Some countries focused on reporting, others on audits. There was agreement on the principles of equal pay, but limited expectation to act on gaps. At the same time, progress towards pay parity has been slow.
Across the EU:
The average unadjusted gender pay gap was 11.1% in 2024, narrowing by only 2.8 percentage points between 2012–2022.[i]
The gender pay gap varies widely by country. In 2024, Estonia had the largest gap (women earned 18.8% less than men). Luxembourg had the smallest gap (-0.8%) and was the only EU country where average pay for women was higher than for men.
The gender pay gap is highest in the finance and insurance sectors, and lowest in water supply, waste management and construction (14 countries recorded higher average pay for women in these sectors).
In most countries, the gap also widens with age. For example, in France, women under 25 earn, on average, 5.2% more than men for work of equal value, but those aged 55-64 take home 21.5% less. This may be linked to older women having greater caring responsibilities, or to historically limited childcare or hybrid working provisions.[ii]
The EU Pay Transparency Directive is intended to raise the bar with clearer reporting requirements and stronger expectations for remediation.
But implementation is currently uneven, with only three of 27 EU countries transposing the Directive into national law by the 7 June 2026 deadline. This brings uncertainty for multinational companies, as countries have some flexibility in implementation, for example, requiring action to address gaps as small as 2%, compared with the 5% threshold set by the Directive.
EU PTD Unpacked: Reporting, Rights and Remediation
The EU PTD is designed to put the principle of equal pay into practice by linking reporting to remediation. That means employers must act to close pay gaps. In other words, it’s not only about what you report; the EU PTD also changes how pay decisions are made, explained, and discussed within organisations.
The fundamentals of the EU PTD
Core Provisions
The Directive:
Defines “work of equal value” and makes it central to how pay comparisons should be made and reported, listing factors such as skills, effort, responsibility and working conditions.
Gives employees and job applicants clearer information on pay and stronger rights to challenge perceived inequity. All organisations, irrespective of their size, must:
Provide details on salary ranges during the hiring process.
Refrain from asking about a candidate’s salary history.
Not prevent employees from sharing salary information.
Requires organisations to share information on pay when asked, including details of pay levels, the criteria used to set pay, average pay for comparable roles and a breakdown of pay by gender.
Shifts the burden of proof, with employers expected to show that pay decisions are not discriminatory when disputes arise.
Links reporting to action, requiring organisations to identify, explain and address unjustified pay gaps, not just disclose them.
Scope
The EU PTD applies to all public and private-sector employers in the EU and to any company with employees in EU member states, regardless of its headquarters location.
Company size (employees)
Reporting frequency
First reporting deadline
250+
Annually
7 June 2027 (on FY26)
150 to 249
Every 3 years
7 June 2027 (on FY26)
100 to 149
Every 3 years
7 June 2031 (on FY30)
<100
No mandatory reporting unless EU member states choose to change this during implementation.
N/A
The Process
You’re in scope, so what’s next? Here’s our step-by-step guide to EU PTD compliance, starting with creating your internal tracking and gender pay gap report.
Getting Started: How To Prepare Now
The EU PTD isn’t a quick compliance exercise. Like many reporting requirements, it demands robust methodologies, clear governance, and a practical plan for explaining results and addressing pay gaps. For example, while it provides a definition of work of equal value, the Directive is not prescriptive on how organisations should measure it. This gives flexibility, but also means employers need to consider their choices carefully and be able to explain their approach.
Preparation is key and having a structured plan helps. Below are our top tips to help you shape the plan and get started.
Start with a trial run. Test your approach to spot and fix gaps before they become public and to avoid penalties. If you’ve reported before, review your last gender pay gap report and the process you used to produce it. If this is your first time, produce a draft report including baseline data and commentary.
Check your data. Look for anomalies and check that the calculations align with requirements. Key considerations include:
Are job titles and levels consistent across the organisation or do you have different labels for the same role that need tidying up?
Can you produce all the metrics the EU PTD will require?
Is your HR / payroll system robust enough to reliably support EU PTD reporting?
Prepare your narrative. Use the dry run to start writing your supporting statement. As you do, ask yourself:
Can you explain the main drivers of any gender pay gaps clearly?
If you give reasons for the gaps, do you have evidence to support them?
Are you clear on what you will do next to improve?
Reduce the gap. Use your draft report to inform your pay parity strategy. Based on the outcome of your trial run, actions could include:
Making pay, progression and bonus decisions more consistent. Set out and use objective criteria for pay progression and promotion.
Removing structural barriers that cause gaps to widen over time. Strengthen guidance on hybrid working (including in senior roles), paid parental leave and childcare support to ensure flexible arrangements are applied consistently.
Giving employees sufficient ways to raise concerns. Use surveys and other mechanisms to flag issues.
Improving internal communications on pay. Explain how pay is set, how decisions are made and what changes are underway.
Supporting managers to explain pay decisions. Provide practical training and guidance on inclusive hiring, fair pay decisions and avoiding bias in performance and promotion.
Beyond Compliance: Resources, Retention and Reputation
While the Directive may feel like just another regulation to worry about, it can be much more than a compliance exercise. The lead-in time is a chance to put the right foundations in place and, done properly, that work can also deliver a range of benefits for your organisation.
Achieving compliance and strengthening your gender pay gap reporting processes can help you:
Maintain your reputation and credibility. The EU Pay Transparency Directive increases the visibility of pay gaps. Unequal pay can drive negative media coverage and employee criticism, while organisations that proactively champion pay equity are more likely to build trust. Providing clear, credible explanations and evidence of action will protect your brand.
Boost employee experience and retain a talented workforce. Clearer information on job levels, progression pathways and pay decisions helps employees see a future at the organisation, reducing employee turnover. It also makes it easier to attract top talent.
Advance diversity, equity and inclusion goals. Acting on pay parity can also support stronger gender representation across the organisation over time, including at senior and board levels — a critical step in increasing workforce diversity.
Improve resource management. Getting EU PTD-ready often means putting a clearer pay structure in place (job levels, pay ranges and consistent rules). That gives you the chance to sense-check whether pay across the organisation is fair, reflects the work being done, and helps avoid overspending due to inconsistent or ad hoc pay decisions.
Get audit-ready evidence. A clearer pay structure and documented pay methodology make it easier to explain at audit, as your numbers are consistent, traceable, and make sense when scrutinised.
Avoid penalties and remediation costs. Staying on top of requirements reduces the risk of fines, enforcement action, compensation and costly last-minute fixes.
Exceed baseline expectations in sustainability reporting. The work you do towards EU PTD generates data and evidence that can help you report with greater confidence under the EU Corporate Sustainability Reporting Directive, the GRI, and other frameworks.
A Little More ABout Context
Context is a specialist sustainability consultancy delivering strategy, reporting and communications to businesses worldwide. For decades, we have helped companies across every sector navigate the complexities of sustainability reporting and produce reports they’re proud of. Today, our teams and custom tools help companies stay up to speed and connect the dots across requirements as expectations evolve.
If EU PTD reporting is on your horizon, Context can help you get organised early — whether that’s sense-checking your approach with a trial report, helping you shape a clear plan of action or keeping your narrative aligned and consistent with your wider reporting (including CSRD, GRI and ISSB-aligned disclosures).
Nature loss is one of the most significant risks facing society and our planet. As ecosystems decline, businesses face new risks to their operations and supply chains. Regulators, investors and consumers want clear information on how organisations depend on and affect nature and their actions to mitigate these risks. The Taskforce on Nature-related Financial Disclosures (TNFD) helps companies achieve this and incorporate nature-related risks and opportunities into corporate decision-making, establishing an operational baseline that is explored further inEnvironmental Social and Governance Reporting: A Complete Guide for 2024 to streamline multi-framework compliance.
A market-led initiative, TNFD is built on the same approach as the Taskforce for Climate-related Financial Disclosures (TCFD), now integrated into the International Sustainability Standards Board’s (ISSB) IFRS S2 Climate-related Disclosures (see IFRS S2 Climate-related Disclosures explained). Both are structured around four pillars: governance, strategy, risk and impact management, and metrics and targets, creating a consistent approach to assessing and reporting on climate- and nature-related issues.
TNFD responds to the growing recognition that nature loss poses long-term financial risks, including operational disruption and supply chain instability. As stakeholders demand greater transparency in how companies address these risks, they must understand how to apply the TNFD principles and integrate nature considerations into their reporting and business strategy.
Why TNFD matters for companies
TNFD offers a structured approach for assessing nature-related dependencies, impacts, risks and opportunities. It helps companies understand where activities rely on natural systems, including water, soil, biodiversity, and ecosystem services. These dependencies influence financial performance through access to resources, operational stability, and regulatory compliance.
Nature underpins all economic activity. Companies in the food production, mining, energy, manufacturing, finance and consumer goods industries face significant nature-related risks. Ignoring these risks may have legal, financial, or operational consequences. TNFD provides the tools needed to anticipate these risks and embed nature considerations into strategic planning and decision-making.
TNFD also supports companies preparing to report on a material issue biodiversity and ecosystems under the EU Corporate Sustainability and Responsibility Directive (CSRD). It is the basis for the detailed evidence-based disclosures needed for credible reporting. Organisations looking to integrate these data streams can review our operational guide onHow to Align Existing Reports with CSRD Requirements to secure audit readiness. Our article How to align existing reports with CSRD requirements outlines how companies can integrate these frameworks.
Key nature-related risks for companies
Nature loss influences several business risks, including:
Water scarcity
Pollinator decline
Deforestation
Habitat and ecosystem loss
Soil degradation
Coastal erosion
Supply chain instability
TNFD helps companies identify where these risks appear in their operations and across their value chain. This information supports strategy, investment planning, and disclosure.
The four pillars of TNFD
TNFD aligns closely with the structure used in existing climate-related frameworks such as TCFD and its successor IFRS S2. This enables organisations to build on existing policies, processes and systems as they expand their environmental reporting. The four pillars are:
1. Governance
Companies must explain how nature-related issues are monitored and managed across the organisation. This includes governance structures, responsibilities, decision-making processes, and how nature considerations influence board and management actions.
2. Strategy
TNFD requires companies to describe how nature-related risks and opportunities influence their strategy and financial planning. This includes short-, medium- and long-term considerations. Strategy disclosures must show how nature considerations shape business models, supply chains, markets and competitive positions.
3. Risk and impact management
Nature-related risks often arise in complex value chains. TNFD helps companies identify and assess these risks and incorporate them into existing risk management processes. This includes evaluating both dependencies (the nature-related services companies rely on) and impacts (how company activities affect nature).
4. Metrics and targets
TNFD encourages the use of metrics to monitor and manage dependencies, impacts, risks and performance. Companies must describe the targets they have set and the methods used to measure progress. This supports transparency and helps investors evaluate a company’s readiness for nature-related regulatory and market changes.
The LEAP approach: TNFD’s core methodology
TNFD is based on the LEAP approach — locate, evaluate, assess and prepare. It guides companies step by step from identifying the most important nature-related issues to reporting n progress::
Locate their interface with nature
Evaluate dependencies and impacts
Assess nature-related risks and opportunities
Prepare responses and disclosures
This structured approach helps organisations move from high-level awareness to detailed analysis. Earlier phases also supplement evidence-based materiality assessment under CSRD.
Locate
Companies must identify where they interact with nature. This requires mapping sites, operations, suppliers, products, and downstream activities. The mapping process reveals where the most significant nature-related risks and impacts occur.
Evaluate
After locating key interactions, companies evaluate their dependencies and impacts. Dependencies include reliance on resources such as water, timber and land, as well as natural processes which help to regulate air, soil and water quality and pollination. Impacts may include pollution, habitat loss, or resource depletion.
Assess
Companies then assess the risks and opportunities associated with their dependencies and impacts. This includes quantifying the financial risks (such as supply chain disruption) and determining the scale of potential market, reputational and regulatory risks. Opportunities may include new products, access to green financing, or improved resource efficiency.
Prepare
The final step involves preparing for disclosure. Companies must set targets, develop action plans, and integrate nature considerations into governance and strategy. This step supports ongoing improvements in transparency and strengthens stakeholder confidence.
How TNFD links to CSRD, GRI and ISSB
TNFD complements existing reporting frameworks, helping sustainability teams delve deeper into nature-related issues.
CSRD
CSRD requires companies to report on their most important sustainability issues based on a detailed materiality assessment. Where nature is one of those issues, TNFD offers structured tools for identifying nature impacts, dependencies, and risks.
GRI
GRI Standards require companies to report on biodiversity, water, emissions, and community impacts. TNFD helps strengthen these disclosures by providing a clearer approach to identification, monitoring and measurement. Readers can revisit GRI Standards: What’s Changing in 2026 for more context on how GRI is evolving.
ISSB
With the launch of IFRS S2, ISSB integrated the TCFD framework on climate-related reporting into the ISSB standards, In November 2025, it announced the kick-off of a standards setting process for nature. This would be based closely on TNFD. Adopting TNFD will mean companies are well-placed for when the new IFRS standards are released.How companies can prepare for TNFD reporting
Companies can begin preparing for TNFD by taking the following steps:
1. Establish the groundwork
Getting to grips with nature-related issues is complex and can seem daunting for companies just starting out. Take time to map out the project at a high level before diving into more detailed analysis. Start by listing the locations where there are likely to be nature-related dependencies, impacts, risks and opportunities, e.g. due to their coastal location and water use. Determine what data is available and where there are gaps in knowledge. This helps to establish project priorities, as well as effectively plan resource requirements and budget.
2. Integrate nature into materiality assessment
Make nature part of your next materiality assessment. TNFD provides the tools to help you identify issues by industry and raw material. This is a good starting point to determine what’s relevant for your business. .
3. Map dependencies across the value chain
Build on your initial scoping exercise, with a more detailed value chain mapping to identify where important company locations overlap with particularly sensitive ecosystems, e.g. areas of very high water stress. Detailed mapping helps establish how the company interacts with other stakeholders in an area, including suppliers and the community, revealing opportunities to collaborate to strengthen ecosystems.
4. Update governance and strategy
Review policies, processes and structures to ensure they fully incorporate nature-related issues. Make sure the Board and executive team is updated on the company’s nature-related dependencies, impacts, risks and opportunities as part of any wider sustainability briefing, enabling them to incorporate nature matters into strategic planning.
5. Strengthen internal data and systems
It takes time to develop an effective and comprehensive nature strategy, starting with a single location or sourcing of a single ingredient and gradually expanding to a wider range of sites and raw materials. With each stage work to deepen data, strengthen internal systems and collaborate with suppliers to improve measurement, building the reliable information required for reporting.
6. Prepare for assurance
Nature-related information may require assurance in future. Get ahead by documenting processes, methodologies, data sources and assumptions from the outset.
How Context Sustainability supports TNFD adoption
Context Sustainability helps companies integrate TNFD into their sustainability reporting. Our team assists with value chain mapping, materiality assessment, data collection and reporting aligned with frameworks, such as CSRD, GRI, SASB and ISSB. We support clients as they develop governance systems, evaluate risks, and prepare disclosures that reflect best practice.
Companies preparing for upcoming reporting cycles can work with us to build a transparent, evidence-based approach to nature reporting. Our advisory services help strengthen decision-making, reduce risk and enhance confidence among investors and stakeholders.
Frequently Asked Questions
What is the primary purpose of the Taskforce on Nature-related Financial Disclosures framework?
The framework provides organisations with a structured methodology for identifying, assessing, managing, and reporting their dependencies, impacts, risks, and opportunities related to natural systems, enabling businesses to integrate nature loss into core financial risk management.
How does the TNFD framework define the difference between a nature dependency and a nature impact?
A dependency is an ecosystem service that a business relies on to sustain its operations, such as the availability of clean water or stable soil composition. An impact refers to the positive or negative changes an organisation’s direct operations or broader value chain activities cause to natural habitats and biodiversity.
What are the four structural pillars used to align nature reporting with existing climate disclosures?
The framework has four core pillars:
Governance, which explains board oversight of nature-related matters.
Strategy, detailing how nature risks affect financial planning.
Risk and Impact Management, outlining the identification processes used across supply chains.
Metrics and Targets, tracking performance against specific environmental goals.
What is the practical application of the LEAP approach within nature-related corporate reporting?
The LEAP approach is an integrated assessment methodology guiding teams through four distinct phases: locate (L) your interface with natural ecosystems, evaluate (E) specific environmental dependencies and impacts, assess (A) corresponding commercial risks and opportunities, and prepare (P) verified data responses for public disclosure.
Scope 3 emissions have become one of the most significant factors in sustainability reporting because they represent the indirect emissions that occur across an organisation’s full value chain. These emissions often make up the largest share of a company’s carbon footprint, yet they are also the most complex to measure and report. As pressure from regulators, investors, and customers grows, organisations must understand Scope 3 emissions and develop clear strategies for disclosure.
This article explains what Scope 3 emissions represent, why they matter, how companies can report them effectively, and how existing frameworks such as IFRS S2, CSRD, GRI, SASB, and TNFD support this process.
Reporting Scope 3 emissions is no longer optional for organisations seeking credible climate disclosures. Regulators are moving toward more comprehensive requirements, and stakeholders want transparency about the full environmental impact of companies they work with or invest in. Understanding the role of Scope 3 emissions within climate strategy strengthens accountability and supports compliance with emerging standards.
What Scope 3 Emissions Represent
Scope 3 emissions come from sources outside a company’s direct control. These emissions cover the upstream and downstream activities that support production, distribution, and customer use. The Greenhouse Gas Protocol categorises Scope 3 into 15 categories, including purchased goods, supply chain activities, business travel, employee commuting, waste, distribution, product use, and end-of-life treatment.
For many companies, Scope 3 emissions account for more than 70 percent of their total climate impact. This highlights the importance of engaging suppliers, transport providers, customers, and partners to understand where emissions arise. Companies must build cooperation across the value chain to gather accurate information and identify opportunities for reduction.
Why Scope 3 Emissions Matter for Reporting
Scope 3 emissions matter because they shape the credibility of a company’s climate strategy. Investors and regulators expect organisations to disclose their full emissions footprint. Incomplete Scope 3 reporting risks misleading stakeholders about climate performance and may create allegations of selective reporting.
IFRS S2, which we explored in IFRS S2 Climate Disclosures Explained, requires organisations to disclose Scope 1, Scope 2, and Scope 3 emissions when they are material. CSRD requires even more detailed disclosures under ESRS E1, including specific methodologies, boundaries, and assumptions. Our article How to Align Existing Reports with CSRD Requirements discusses how climate metrics fit into the broader ESRS framework.
Scope 3 emissions also influence risk assessments. Emissions hotspots often appear in areas affected by supply chain disruption, natural resource constraints, or shifting market expectations. Identifying these hotspots helps companies plan investments, reduce exposure, and improve resilience.
How Scope 3 Links to Materiality Under CSRD
Scope 3 emissions influence both financial and impact materiality. Companies must evaluate their climate impacts across the value chain and assess how these impacts influence financial performance. This dual lens aligns with the principles described in What Counts as a Material Impact Under CSRD, where organisations evaluate both outward impacts and inward risks.
In many industries, Scope 3 emissions appear in the impact materiality assessment even when Scope 1 and Scope 2 are relatively small. Under CSRD, companies must disclose climate impacts when they are significant in either dimension. This makes Scope 3 analysis essential for compliance.
How to Measure Scope 3 Emissions
Measuring Scope 3 emissions requires a structured and evidence based approach.
1. Map the Value Chain
Companies must identify activities across upstream and downstream value chain stages. This includes suppliers, service providers, distribution networks, product use, and product disposal. TNFD’s nature mapping approach, described in TNFD & Nature Reporting: What It Means for Companies, offers similar mapping principles that can support Scope 3 identification.
2. Prioritise Categories Based on Impact
Not all fifteen categories will apply to every organisation. Companies should identify which categories have the greatest emissions impact. Purchased goods, transport, product use, and capital goods are often significant contributors.
3. Collect Supplier Data
High quality Scope 3 data requires supplier cooperation. Companies may request primary emissions data from suppliers or use industry average datasets. Building supplier engagement programs improves accuracy over time.
4. Apply Accepted Estimation Methods
Where primary data is not available, companies can use secondary data sources or estimation models. The Greenhouse Gas Protocol offers calculation tools for common categories. Accuracy improves as organisations develop better data systems.
5. Document Assumptions and Methodologies
Companies must document how data was collected, what assumptions were used, and how boundaries were defined. This aligns with CSRD and IFRS S2 expectations for transparency. Such documentation also supports assurance readiness.
Reporting Scope 3 Under IFRS S2, ISSB, and SASB
IFRS S2 requires organisations to disclose Scope 3 emissions when material. This aligns with investor expectations and supports consistent climate information. SASB Standards, which we explored in SASB vs ISSB: What Companies Need to Know, provide industry based insights that help companies understand which Scope 3 categories are most relevant to financial performance.
ISSB Standards integrate SASB’s sector guidance. This helps companies determine whether Scope 3 emissions significantly influence enterprise value. Using both ISSB and SASB helps create a stronger foundation for climate reporting.
Reporting Scope 3 Under CSRD and GRI
CSRD requires organisations to provide detailed Scope 3 disclosures that follow ESRS E1. This includes methodology, time horizons, boundaries, assumptions, and changes over time. Organisations using GRI Standards will recognise similar structures. The article GRI Standards: What’s Changing in 2026 highlights how GRI helps companies disclose climate impacts across operations and value chains.
GRI 305 (Emissions) provides detailed reporting requirements that align well with CSRD’s approach. Companies already using GRI can integrate their existing data to meet ESRS E1 expectations.
Common Challenges in Scope 3 Reporting
Scope 3 reporting introduces several challenges that companies must manage carefully.
Lack of Supplier Data
Suppliers may not have the tools to measure their own emissions. Companies may need to support supplier capability building or use estimation models until primary data becomes available.
Data Accuracy
Scope 3 estimates often rely on secondary data. Organisations must be transparent about uncertainties while gradually improving accuracy.
Complexity of Value Chains
Multi tier supply chains make emissions mapping difficult. Companies must work across multiple layers to gather information.
Boundary Definitions
Organisations must decide which activities fall within reporting boundaries. Clear criteria improve consistency and support assurance.
How Companies Can Improve Scope 3 Reporting
Companies can improve Scope 3 reporting by taking several practical steps.
Strengthening Supplier Engagement
Organisations should build relationships with suppliers to support primary data collection. Supplier training and shared tools improve quality and consistency.
Implementing Better Data Platforms
Climate reporting platforms help capture, validate, and store emissions data. These systems support ongoing reporting rather than annual cycles.
Integrating Climate Reporting Across Frameworks
Companies should integrate Scope 3 reporting with IFRS S2, GRI, CSRD, and TNFD requirements. This creates a unified and efficient reporting system. Articles across this cluster provide guidance on how to connect these frameworks.
Preparing for Assurance
Scope 3 disclosures will face growing assurance requirements. Companies must document methodologies and support their data with evidence.
How Context Sustainability Supports Scope 3 Reporting
Context Sustainability helps organisations design and implement Scope 3 reporting systems. Our team supports value chain mapping, data collection processes, supplier engagement, methodology selection, and integration across GRI, CSRD, SASB, and IFRS S2. We help companies strengthen their climate reporting foundations and prepare for assurance.
Organisations seeking to improve their Scope 3 reporting can work with us to establish effective systems that meet stakeholder expectations and regulatory requirements.
Is Football Sustainable? How and Why Clubs Should Prioritise Sustainability
A New Goal for Football
Nothing unites a crowd quite like football. While clubs are beginning to engage their key stakeholders in sustainability efforts, FIFA’s four-year sponsorship deal with Saudi oil giant Aramco (aka the world’s ’largest corporate greenhouse gas emitter’) for the 2026 Men’s World Cup and the 2027 Women’s World Cup highlights the need for stronger global sustainability action in the sport.
As with any industry, football has its own unique set of sustainability impacts and opportunities. From an environment standpoint, stadium construction and clubs’ resource consumption impact biodiversity and ecosystems, while the sport itself is a significant contributor to global greenhouse gases. Estimates put football’s global carbon footprint at 64-66 million tonnes of CO2 emissions (tCO2e), roughly equivalent to Austria’s annual greenhouse gas emissions. Yet the sport also has the potential to promote some of the key social aspects of sustainability, such as advancing community outreach through educational initiatives and advocating for gender equality.
Why Should Clubs Care?
There are plenty of reasons why football clubs should be prioritising sustainability, not least to mitigate the risk to players, fans and stadiums.
Football is best played in the open air. But as climate change intensifies, so do the operational and health risks of playing outdoors. Without significant action, 25% of English Football League (EFL) stadiums will be at risk of annual flooding by 2050. Rising temperatures increase the likelihood of players and officials experiencing heat stroke and severe dehydration. This was evident during the June 2024 Copa America. Uruguayan footballer Ronald Araujo had to be substituted off due to dehydration as outdoor temperatures exceeded 29ºC in Miami, while an assistant referee was admitted to hospital due to heat stress after collapsing during a match in Kansas City.
The 2026 Men’s World Cup offers another example of how extreme weather is affecting players, fans and workers. The tournament, held across the US, Canada and Mexico, coincides with forecasts of above-average temperatures across much of the US. In response, FIFA has introduced mandatory water breaks for players, expanded water distribution and misting systems, and scheduled matches for late afternoons and evenings. Yet heat-related risks still remain for fans, who are barred from bringing water bottles into stadiums, as well as for the thousands of stadium workers who often do not receive direct employee protections from FIFA.
It’s also good for business.
Investing in sustainability is a strategic move for football clubs. Investors are increasingly demanding visible progress on sustainability and sponsorship deals now consider sustainability as a key decision-making factor. According to a survey by the European Sponsorship Association, over 60% of sponsors said that having a sustainability policy in place was ‘very’ or ‘quite’ important when forming partnerships. By adopting sustainability initiatives, football clubs can future proof their operations, reducing long-term financial risks from climate change impacts while unlocking opportunities for innovation.
Fans care about sustainability. Fans are the heartbeat of football – providing players with motivation and clubs with the revenue to operate. With 66% of UK football fans believing the sport needs to do more to improve sustainability practices and 65% feeling that clubs could do more to encourage sustainable behaviour, it’s clear expectations are high.
Fans have real power to influence a club’s sustainability efforts. In 2023 Bayern Munich dropped Qatar Airways as its shirt sponsor following fan protests over human rights concerns related to the Qatari government, the airline’s owner. In 2021, Huddersfield Town FC’S Supporters Association launched the Sustainable Stadium Campaign to raise awareness of climate issues and push for operational changes at the John Smith Stadium. The campaign’s goals included phasing out single-use plastics, improving recycling capacity, and introducing energy efficiency measures.
Prioritising sustainability helps football clubs prepare for evolving regulations.
In the UK, larger clubs may soon be subject to the UK Sustainability Disclosures Standards. The English Premier League already mandates that all clubs develop an environmental sustainability policy by the end of the 2024 / 2025 season and track greenhouse gas emissions by the end of the following season. Other leagues may decide to follow suit.
In the EU, the Corporate Sustainability Reporting Directive (CSRD) originally required around 150 football clubs listed on European stock markets to disclose sustainability data. The Omnibus Simplification Package proposed in February 2025, has reduced the scope of the regulation, meaning smaller clubs are now exempt but larger clubs, such as FC Barcelona and Real Madrid, remain in scope. This means they will have to conduct a double materiality assessment (DMA) and report on identified environmental, social, and governance (ESG) topics using the updated European Sustainability Reporting Standards (ESRS). Regardless of regulatory changes, football clubs should publicly disclose their sustainability efforts to ensure stakeholder transparency and, where relevant, explore alternatives to mandatory reporting, such as the Voluntary SME (VSME) standard. Originally designed for non-listed micro-, small-, and medium-sized businesses, the EU is now promoting the VSME as a way for companies no longer in scope of CSRD to report.
What Can Clubs Do?
There’s no doubt that football clubs across all leagues will be impacted by the climate crisis, the continued focus on inclusion, evolving regulations, and changing market trends. Here are some key actions clubs can take to enhance their sustainability efforts and get ahead of the game:
1. Reduce environmental impact
Football is an emissions-intensive sport, with its main sources of emissions coming from international travel, stadium construction, and sponsorships with high-emitting companies.
Clubs can begin by investing in renewable energy and sustainable merchandising, implementing resource recycling systems within their operations and introducing alternatives to single-use plastics and vegan/vegetarian options on match days. These are just a few of the environmental initiatives championed by Forest Green Rovers, the “greenest football club in the world”, since it began its sustainability journey in 2010. A standout feature of the club’s sustainability efforts is the 100% organic pitch that captures rainwater and recycles it for irrigation. The club even recycles wastewater from fan toilets back onto the pitch! With growing global concern over climate change, football clubs have an opportunity to lead by example, using their influence to create more sustainable practices both on and off the pitch.
2. Assess sponsorship agreements
Sponsorships are a crucial source of revenue for football clubs. But they often come with a hidden cost to the environment. One report revealed sponsorship deals with high-emitting industries, such as oil and gas, aviation and fast food, account for 75% of the sport’s carbon footprint. Until this report’s publication in early 2025, sponsorship had not been widely recognised as a major source of emissions in football. Clubs should carefully assess their sponsors to ensure they align with sustainable and ethical values, rather than contributing to social and environmental harm, and transparently communicate their sponsor activities to stakeholders.
This tension is currently being played out at the 2026 Men’s World Cup, where FIFA’s partnership with Aramco has drawn global criticism. Under its 2021 climate strategy, FIFA has pledged to reduce emissions by 50% by 2030, and reach net zero by 2040, in line with the UN Sports for Climate Action Framework. Yet, Aramco’s CEO has previously argued that we should keep investing in oil and gas rather than pursue climate transition alternatives. This sponsorship agreement therefore raises the question: how much is one of the world’s largest sporting organisations willing to compromise on its sustainability commitments for commercial gain?
3. Continue to strengthen social sustainability
The social impact football clubs have on the communities around them is arguably their most valuable contribution to society. For years, clubs have engaged in vital community work that not only nurtures the next generation of players, but also promotes health and wellbeing, fosters social cohesion, and supports local economies. Additionally, clubs serve as powerful platforms for addressing issues beyond the sport, such as mental health and domestic violence. Football clubs should continue this impactful work and further strengthen their role in promoting the social aspect of sustainability.
4. Enhance sustainability education
Although community outreach has long been a priority for clubs, its potential role in their sustainability strategies has often been overlooked. Expanding community programmes to include sustainability education is one way to achieve a holistic sustainability approach. For example, Chelsea FC’s Foundation has delivered 90 sustainability sessions to over 3,800 students, raising awareness of critical environmental issues.
Discrimination and the gender pay gap are just two of the many challenges women in the industry face. A 2024 survey found 89% of women working in football experienced discrimination — up 7% from 2023. Meanwhile, the English Football Association (FA) reported its 2023 gender pay gap increased in favour of male employees. This reveals a need for ongoing action to continue to address gender inequalities in the sport — it’s not a time to scale back.
Football clubs can no longer afford to sideline sustainability. While larger clubs may have greater financial resources and stakeholder support, it’s time for clubs across all leagues and countries to take action. To begin, clubs should develop a robust sustainability strategy, collaborate with industry sustainability groups such as Football for Future and communicate progress transparently to avoid greenwashing. Sustainability is not just an ethical responsibility — it is essential for the future of football.
Context is on hand to help with your strategy, reporting and communications needs, with over 25 years of experience working with businesses to accelerate their sustainability practices. If you would like to learn more about what we can do for you, please contact Helen Fisher: helen.fisher@contexteurope.com.
How to align existing reports with CSRD requirements
The impact of the EU Corporate Sustainability Reporting Directive (CSRD) extends far beyond Europe. Changes ushered in by the Omnibus simplification package have meant it is not as comprehensive or far-reaching as first intended. But large organisations globally will still face additional reporting requirements over the next three years. Gradually incorporating the extra requirements over time enables a phased transition and avoids a last-minute rush for compliance.
CSRD requires companies to report on their most material issues, adopting a structured, evidence-based approach aligned with the European Sustainability Reporting Standards (ESRS). A phased approach enables companies to build on their current reporting, adapt to new requirements, and effectively align their approach across multiple frameworks. When first designing the ESRS, regulators aimed to make them interoperable with other standards, including those from the GRI SASB and the International Sustainability Standards Board (ISSB).. This means organisations can map existing disclosures to ESRS requirements rather than rebuilding their reporting system entirely.
Which companies must report under CSRD?
Throughout 2025, it was hotly debated which companies should report under CSRD. Given that, sustainability professionals should be excused for any ongoing confusion about which companies are in scope and which are not. So here’s a quick reminder of the requirements approved by the European Parliament in December 2025.
2025: EU-listed companies with 500+ employees required to report on activities from FY24 onwards.
2028: Non-listed EU businesses and large EU subsidiaries of non-EU businesses required to report on activities from FY27 onwards. ‘Large’ is defined as 1,000+ employees and turnover of €450m+. At this point, listed entities with 500-999 employees no longer have to report, as they don’t meet the threshold for a large business. Larger listed businesses can also revise their reports to align with the slimmed down ESRS.
2029: Non-EU companies that generated turnover of €450m+ in the EU in the previous two years and have a large EU subsidiary or a branch generating €200m+ in turnover are required to report on activities from FY28 onwards.
Understanding the CSRD and ESRS requirements
CSRD puts the principle of double materiality firmly at the heart of reporting. Companies must complete a double materiality assessment to determine the most important issues for their business — the ones on which they have to report publicly. The ESRS set out the detailed structure and content for those disclosures. The standards cover general disclosures as well as 10 topical standards — five environmental, four social and one governance topic — spanning climate, pollution, water, biodiversity, workforce, affected communities, and governance. Companies should also report on entity-specific topics that are material to their business. To date, companies have reported on an average of seven of the 10 topics, often adding artificial intelligence and cybersecurity as entity-specific topics.
What is double materiality?
Double materiality determines what matters to a business and its stakeholders. It considers:
Impact materiality: How a company’s activities affect people and the planet (both positively and negatively) — sometimes described as the inside-out perspective, or impact material. .
Financial materiality: How sustainability matters influence the company’s financial performance and enterprise value — the outside-in perspective or financial materiality.
Under CSRD, companies must report on issues that are material in terms of their impact, financial consequences or both. This differs from other framework, such as SASB or IFRS, which focus solely on financial materiality, or from the GRI Standards, which are founded on the principle of impact materiality while advocating companies increasingly move to a double materiality approach.Our article GRI Standards: What’s changing in 2026 provides further detail on how GRI integrates impact-based disclosures.
Key steps to a CSRD-aligned report
Step 1: Update your materiality assessment
Given the centrality of double materiality to CSRD, the first step towards a CSRD-aligned report is to revisit your materiality assessment. The ESRS outline a structured process, ensuring companies involve and incorporate the views of all stakeholders. This means working with employees and senior leadership across functions and business units to get their direct perspective. They can also represent the views of customers and suppliers in the process, supplementing direct engagement with external stakeholders — or acting on behalf of external groups where it is impractical to involve them. Companies must also explain the processes used to identify these topics and show clear links between their impacts, risks, and policy responses. This requires a formalised baseline regarding What Counts as a Material Impact Under CSRD to confirm compliance boundaries.
Step 2: Map your current report against ESRS requirements
With your double materiality assessment in place, you can start to develop the roadmap to a fully aligned report. For each of your material topics, map your current report against what you are required to disclose based on the draft simplified ESRS published in December 2025. The standards aren’t due to be finalised until mid-2026, but the December guidance is likely to be very close to the final standards.Many companies already structure their sustainability reports around familiar frameworks such as GRI or SASB. These frameworks overlap with ESRS, which means you are likely to have many of the base requirements covered — you only need to identify what’s additional.
Mapping exercises reveal where current disclosures already meet ESRS expectations and where updates or additional detail are required.
Step 3: Strengthen disclosure of governance, policies and due diligence
CSRD and ESRS require organisations to demonstrate that sustainability governance is embedded at the highest levels of decision-making. To do this, you need to provide detailed information in your report on:
Roles and responsibilities for monitoring and managing sustainability topics.
Board and executive level involvement in sustainability planning and execution.
Consideration given to sustainability issues in strategic decision-making.
Due diligence processes applied across the value chain.
Review and approval of sustainability strategy, action plans and reporting.
Existing sustainability reports may address these issues, but often lack the level of specificity expected under the CSRD. Strengthening governance disclosures helps demonstrate accountability, helping satisfy stakeholder expectations and regulatory requirements.
Organisations must also describe their due diligence approach for environmental and social impacts. This closely aligns with established GRI disclosures. Companies familiar with GRI will find that their existing systems already capture elements of due diligence that feed into ESRS. Clearly linking these processes in the report helps demonstrate compliance.
Step 4: Integrate sustainability into strategy and risk management
Your reporting must demonstrate how sustainability is embedded into business strategy. That means having a clear explanation of how material impacts, risks and opportunities are taken into account in key areas. Be clear on how sustainability informs strategic and financial planning, resource allocation and procurement.
ESRS expects companies to address how these factors influence their long-term goals and investment decisions. Organisations may need to expand their disclosures to include more explicit references to scenario analysis, resilience assessments and risk management systems. Companies already aligned with TCFD and working towards IFRS S2 will have experience with climate scenario analysis, which stands them in good stead for CSRD alignment.
Step 5: Improve data quality and traceability
Prepare for the assurance requirements under CSRD by documenting the methodologies, definitions and data sources for each sustainability metric.
Strengthen internal data systems by ensuring:
Clear ownership of data
Clear and consistent definition of reporting boundaries
Estimations and assumptions are backed by explanation and evidence
Transparent data review processes
Preparing for external assurance is essential because CSRD requires limited assurance initially and may progress to reasonable assurance in future cycles. Companies must be ready to demonstrate that their sustainability data meets assurance standards.
Step 5: Update targets, action plans and performance indicators
Review your metrics and targets. You need to be able to measure progress against each of your material topics. You also want to be sure you are measuring what matters in a way that makes sense for the business. Existing sustainability reports may outline your goals, but best practice demands more precise descriptions of:
Target setting
Evidence supporting target selection
Time horizons
Baseline data
Annual progress
Alignment with external frameworks such as the Science Base Targets initiative.
Organisations must link targets to their materiality assessment and strategy. This creates a consistent and credible narrative that supports investor and stakeholder confidence.
How Context Sustainability helps companies align with CSRD
Context Sustainability works with organisations across industries as they continue to transition towards CSRD. We help clients evaluate their existing reports, complete gap analyses, update materiality assessments, and strengthen governance and data systems. Our support allows companies to create sustainability reports that reflect best practice and meet emerging regulatory expectations.
Our approach integrates expertise across multiple frameworks. We help companies align their GRI, SASB, and IFRS S2 disclosures with ESRS requirements, ensuring their reports remain clear, consistent and credible. Companies preparing for assurance also benefit from our guidance on documentation, internal controls, and evidence gathering.
Frequently Asked Questions
What is the most practical first step when updating a legacy sustainability report to meet CSRD standards?
The first step is conducting a formalised double materiality assessment to establish your baseline compliance boundaries. This process determines which specific European Sustainability Reporting Standards topical disclosures are relevant to your operations, preventing your team from collecting unnecessary metrics.
How does the CSRD framework alter the role of corporate board members regarding disclosures?
The directive places explicit legal accountability for sustainability reporting on the company’s administrative, management, and supervisory bodies. Board members must formally sign off on the data systems, risk management frameworks, and materiality choices, subjecting non-compliance to strict corporate governance penalties.
Can a company rely on its current Global Reporting Initiative data to satisfy European mandates?
While GRI data provides an excellent functional foundation due to high technical alignment with European standards, significant data gaps usually remain. Companies must expand their legacy GRI reporting to incorporate forward-looking targets, transition plans, and specific financial materiality risk calculations required by European rules.
Why does the directive mandate the use of the European Single Electronic Format for disclosures?
Standardising disclosures within a single digital format ensures all corporate sustainability reports are machine-readable and highly comparable. This allows asset managers, credit agencies, and regulators to easily extract, filter, and analyse sustainability information using automated data systems.
The Global Reporting Initiative (GRI) remains the most widely used sustainability reporting framework globally. It’s recognised for providing a structured way to explain a company’s impacts on people, planet and society. It provides a strong foundation for reporting as sustainability disclosures become more regulated and receive greater stakeholder scrutiny.
Increasingly, companies need to get to grips with how GRI fits alongside other frameworks and standards that are the basis of regulation in specific countries and regions — for example, the European Sustainability Reporting Standards (ESRS) and the International Sustainability Standards Board’s (ISSB) IFRS S1 and S2 standards that are being widely and rapidly adopted across the world. At the heart of these differences is the approach to materiality. GRI focuses on a company’s impacts, while ISSB is financially focused. The EU Corporate Sustainability Reporting Directive (CSRD) and ESRS consider what matters from both an impact and a financial perspective, as discussed in What counts as material under CSRD.
This article summarises what is firmly established in GRI reporting and what is changing, helping reporting teams prioritise what matters in 2026.
What is now established in GRI reporting
Universal Standards are fully embedded
The revised GRI Universal Standards (GRI 1, 2 and 3) provide the foundation for reporting. They have been in force since 2023. GRI encouraged early adoption and expects that in 2026, companies using GRI will have fully embedded the updated guidance in their approach to:
impact materiality
stakeholder engagement
human rights and due diligence across the value chain
The focus is on how a company explains its approach to identifying, preventing, mitigating and addressing adverse impacts, not just describing outcomes. This increases process transparency and accountability, particularly for human rights and supply chain risks.
A more structured approach to materiality
GRI’s materiality approach remains centred on a company’s significant impacts, but the updated standards now require more rigorous disclosures on how those impacts are assessed. Companies are expected to show how impacts were identified, including how stakeholders were involved in the assessment process and how their views informed decisions. There should also be a clear description of the approach to assessing severity and likelihood of impacts. This structured approach aligns well with ESRS expectations, even though the frameworks are not identical.
GRI Sector Standards in 2026
GRI’s Sector Standards are an important step forward in reporting quality and comparability in some of the most high-impact sectors.
Current Sector Standards
Sector Standards have already been made available for:
Oil and Gas (GRI 11)
Coal (GRI 12)
Agriculture, Aquaculture and Fishing (GRI 13)
Mining (GRI 14)
The mining sector standard comes into effect in 2026, valid for reporting periods beginning on or after 1 January 2026. Mining companies need to reflect this standard in their current reporting plans, as it introduces clearer expectations for site-level impacts, community engagement and environmental management.
Sector Standards in development
GRI is working on further Sector Standards for Textiles and Apparel and for Financial Services. In anticipation, sustainability professionals in these sectors should focus on strengthening assessment of their material impacts and more detailed value chain mapping..
GRI alignment with ISSB and ESRS
Interoperability with ISSB
GRI and the IFRS Foundation continue to collaborate to improve interoperability between GRI and ISSB standards. While the frameworks remain separate, guidance helps organisations align governance, climate and policy disclosures across both the impact and financial materiality lenses. This supports more efficient reporting cycles and reduces duplication.
Alignment with ESRS
GRI and the European Financial Regulatory Advisory Group (EFRAG) worked together closely during development of the original ESRS, resulting in a high level of alignment. But revision to the ESRS in 2025 on the back of the EU Omnibus simplification package has caused the two frameworks to start to diverge. This will be exacerbated in 2026 as GRI’s Topic Standards Project for Labor comes to fruition. This will introduce more detailed disclosure guidance in relation to workforce practices and human rights. Companies already reporting under GRI and that continue to keep pace with the standards as they evolve are generally well prepared for CSRD. ESRS-specific requirements still apply, notably the emphasis on double materiality.
Key themes shaping GRI reporting in 2026
The GRI standards will continue to evolve as the Global Sustainability Standard Board continues to revise and update key aspects of the framework.
Human rights and workforce disclosures
Human rights remain central to GRI reporting, with updated standards addressing rising expectations for evidence of due diligence, effective grievance mechanisms and remediation processes. Workforce disclosures are becoming more detailed, especially around working conditions, supply chain labour risks and workers’ representation.
Supply chain transparency
GRI’s value chain focus means organisations must increasingly explain impacts beyond direct operations. This includes supplier risk mapping, responsible sourcing practices, and actions taken to improve outcomes across the supply chain.
Climate and nature-related impacts
Climate disclosures continue to evolve, influenced by IFRS S2, while nature-related impacts, such as biodiversity, land use, and water, are receiving greater attention. The growing adoption of the Taskforce for Nature-related Financial Disclosures (TNFD) framework is raising expectations for clearer explanations of nature-related impacts and dependencies.
Higher expectations for data quality
Even where assurance is not mandatory, stakeholders expect sustainability data to be traceable, consistent and supported by internal controls. Reporting teams should focus on maintaining and strengthening clear data ownership, documentation of methodologies, and cross-functional collaboration and coordination.
Preparing for GRI reporting in 2026
Organisations can strengthen their GRI reporting by focusing on a few practical priorities:
Materiality. Effective reporting stems from a clear focus on the issues that matter to a business and its stakeholders. Revisit your materiality assessments using a structured, evidence-led approach to ensure impacts are well understood and assessed. Taking a double materiality approach paves the way for reporting across multiple frameworks where companies want to combine GRI disclosures with local mandatory requirements.
Sector Standards. Refresh your knowledge of the Sector Standards that apply to your industry, confirming whether revised standards are in the pipeline. Map current disclosures against draft proposals, enabling you to create a pathway towards adoption of the latest guidance.
Systems and processes. Having data systems and processes that support multiple frameworks is the secret to stress-free reporting. Review your current approach to ensure you can track and record all relevant metrics in sufficient granularity, using the outcome of your standards mapping exercise to check that your systems and processes are future-ready.
Assurance. Make it your mission to be assurance-ready, even where assurance is voluntary. Focus on documenting the data source, methodologies and assumptions that feed into your reporting.
Cross comparison. Reporting to multiple frameworks is becoming the norm for most companies. Compare requirements, using interoperability guidance where it exists, to identify the overlaps between frameworks. This can help reduce duplication across your report and allow you to focus attention where it matters — on transparency and accuracy.
How Context Sustainability supports GRI reporting
Context Sustainability supports organisations navigating GRI reporting in a more regulated environment and with strong moves to greater independent assurance. We help clients refresh materiality assessments, apply relevant Sector Standards, improve data quality, and align GRI reporting with ESRS and ISSB where required.
With a focus on clarity, credibility, and practicality, we help organisations build reporting systems that work across frameworks and support long-term sustainability goals.
Frequently Asked Questions
What does the concept of interoperability mean between the GRI and ESRS frameworks?
Interoperability ensures that organisations utilising GRI Standards can map their existing impact data directly to the corresponding European Sustainability Reporting Standards topical disclosures. This structural alignment eliminates duplication across data collection pipelines and optimises reporting efficiency under the Corporate Sustainability Reporting Directive.
How do the updated GRI Universal Standards impact a company’s value chain disclosures?
The Universal Standards require organisations to provide explicit disclosures regarding their human rights due diligence, impact identification processes, and remediation channels across both upstream and downstream value chains, moving beyond simple direct operational reporting.
Why are sector-specific standards becoming critical under the GRI framework?
GRI Sector Standards establish a standardised baseline for industry-specific impacts, ensuring high comparability between peer organisations. For example, the Mining Sector standard mandates specialised, site-level disclosures concerning localised community impacts and environmental management.
How can companies ensure voluntary GRI reports are prepared for future mandatory assurance?
To achieve assurance readiness, companies must transition away from manual data entry and build structured internal controls. This involves fully documenting calculation methodologies, formalising executive approval workflows, and treating non-financial data with the same operational rigour as financial accounting.
