Practitioner's Guide to ESRS S1

Michelle Horsfield

25 years: Sustainable Finance

In this video, Michelle breaks down ESRS S1, she explains how this standard brings transparency to the way businesses treat their employees, covering everything from fair pay and safety to diversity, grievance mechanisms, and human rights. She also explores who ESRS S1 is for, what companies must disclose, and why it matters not just for investors and regulators, but for job seekers and internal teams too.

Regulation and Initiatives

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Practitioner's Guide to ESRS S1

15 mins 27 secs

Key learning objectives:

Understand the purpose of ESRS S1 and how it supports transparency on workforce impacts
Outline the key disclosure requirements on workforce policies, metrics, and qualitative information
Understand the human rights and ethical dimensions embedded within ESRS S1
Understand how workforce data, such as wages, diversity, and grievances, can reveal a company’s true values

Overview:

ESRS S1 sets out detailed reporting standards on how companies treat their own workers, helping investors, regulators, and even job seekers assess workforce practices. It covers everything from wages and health and safety to grievance processes, diversity, and training. With structured disclosure on both policies and metrics, S1 aims to drive transparency and accountability. The focus is not just on data but meaningful insights into culture, fairness, and rights, placing human dignity at the heart of sustainability reporting and ensuring business practices reflect societal values.

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Summary

What is the purpose of ESRS S1 and who is it for?

ESRS S1 aims to standardise corporate reporting on how businesses impact their own workers. It supports investors in comparing companies on workforce practices and helps job seekers understand company culture. More broadly, it enhances transparency and accountability by requiring detailed reporting on the treatment of employees, from wages to inclusion, safety, and dialogue. It also plays a key role in aligning businesses with EU human rights expectations.

What types of information must companies disclose under ESRS S1?

S1 requires both quantitative data (e.g. wages, gender breakdown, turnover, training hours) and qualitative descriptions (e.g. grievance processes, diversity policies, worker engagement structures). Key areas include fair pay, collective bargaining, anti-discrimination efforts, inclusion of vulnerable groups, and internal remediation. This dual focus allows stakeholders to assess both the numbers and the culture behind them.

Why is the human rights framework so central to ESRS S1?

The standard is grounded in international human rights frameworks like the UNGPs and ILO declarations. It recognises that issues such as fair pay, workplace safety, dignity, and voice are not just ESG metrics they’re rights. AI, supply chains, and vulnerable worker groups raise risks that must be addressed proactively. S1 puts human rights at the centre of workforce transparency, not as an afterthought.

How can the S1 disclosures be practically useful to different audiences?

Investors can assess labour risks, job seekers can evaluate company culture, and regulators can track compliance with EU laws. Internally, it forces HR and legal teams to assess whether they’re truly upholding their responsibilities. The disclosures, made available in digital formats, allow for easy comparison and benchmarking across sectors, bringing workforce treatment into the spotlight in ESG reporting.

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Michelle Horsfield

Michelle Horsfield, an environmental scientist with a climate change specialisation, transitioned into the financial sector four years ago to apply her knowledge to the largest reallocation of capital in history, as the economy moves towards a lower carbon future.

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