ESRS Topic Standards for Fashion: What Double Materiality Usually Pulls In

Mandatory vs. topic standards under ESRS

The Corporate Sustainability Reporting Directive (EU) 2022/2464 obliges all entities that fall within the Wave 2 threshold to report under the European Sustainability Reporting Standards (ESRS). Two standards are non‑optional: ESRS 1, which sets out the general reporting requirements, and ESRS 2, which covers governance disclosures. Beyond these, the ESRS framework provides a catalogue of topic standards identified as E1‑E5 (environmental), S1‑S4 (social), and G1 (governance). Companies select the relevant topic standards based on the outcome of their double‑materiality assessment. Only the mandatory standards apply universally; the topic standards are applied selectively.

Double materiality decides the topic pack

Double materiality is the analytical lens that drives the selection of ESRS topic standards. It requires companies to evaluate both financial materiality (how sustainability issues affect the company’s value) and impact materiality (how the company’s activities affect people and the planet). The result of this two‑sided assessment determines which of the E, S, and G topic standards become part of the reporting package. In practice, a fashion brand will map its value chain, identify the most significant sustainability risks and opportunities, and then match those to the appropriate ESRS topics.

Why Scope 3 and S2 usually win for fashion

For fashion and product‑brand suppliers, the double‑materiality test most frequently highlights two areas:

• Scope 3 emissions – the indirect greenhouse‑gas emissions generated across the entire supply chain, from raw‑material extraction to end‑of‑life disposal. Because the majority of a garment’s carbon footprint resides upstream, this environmental topic aligns with ESRS E‑2 (climate change) and is considered impact‑material.
• S2 – workers in the value chain – the social conditions of employees and contractors throughout the supply network. Labour rights, health and safety, and fair wages are central to impact materiality, while supply‑chain disruptions or reputational damage represent financial materiality.

The combination of these two topics satisfies both halves of the double‑materiality requirement and therefore becomes the core of most fashion‑brand disclosures under the ESRS topic standards.

What Wave 2 brands file and when

Wave 2 applies to companies that meet at least two of the following three quantitative thresholds: more than 250 employees, a balance‑sheet total exceeding €25 million, or a net turnover above €50 million. The first reporting year for Wave 2 is fiscal year 2025, and the inaugural filing deadline is in 2026. All qualifying fashion brands must therefore prepare a CSRD‑compliant report that includes ESRS 1, ESRS 2, and the selected topic standards (most commonly E‑2 and S2), accompanied by external limited assurance.

Product‑level data behind the narrative

ESRS topic standards demand granular, product‑level information to substantiate the narrative around Scope 3 and S2. This includes:

• Material composition of each garment or accessory, enabling calculation of embodied carbon.
• Supplier‑level CO₂ data, collected through questionnaires, third‑party verification, or carbon accounting tools.
• Sourcing details that identify geographic hotspots, recycling rates, and the use of certified sustainable fibres.
• Social‑impact metrics for workers in the value chain, such as wage compliance, health‑and‑safety incident rates, and grievance‑handling mechanisms.

Collecting and harmonising this data across dozens or hundreds of suppliers is a prerequisite for meeting the ESRS disclosure requirements and for passing the external limited assurance process.

How KadmilOS fits in

KadmilOS is purpose‑built for fashion brands that must comply with the FY 2025 CSRD pack. The platform automates the collection of product‑level composition data, aggregates supplier CO₂ figures, and maps social‑impact indicators across the value chain. Its built‑in double‑materiality engine helps sustainability controllers and finance partners identify the most material ESRS topics, while the governance module ensures ESRS 1 and ESRS 2 disclosures are complete and audit‑ready. By delivering a single source of truth for both environmental and social data, KadmilOS reduces the time spent on manual spreadsheets and supports the external limited assurance required from FY 2025 onward.

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