Corporate Sustainability Management Professional
Branch Foundation & Level 1 — Modules B1, 1.1, 1.2, 1.3

This unit builds on the financial materiality concept from F1 and the regulatory applicability overview in F3 to establish the full EFRAG double materiality framework. It covers the regulatory basis in CSRD Article 19a and ESRS 1 Section 3, explaining that CSRD requires entities to disclose information material from an impact perspective, a financial perspective, or both. The unit maps the ESRS 1 definitions of material impact, risk, and opportunity to practical examples from manufacturing and financial services, illustrating how the same sustainability topic can be material from one perspective but not the other, or from both simultaneously.

The unit covers the five-stage EFRAG assessment process at the overview level: scoping the universe of sustainability matters, collecting evidence through stakeholder engagement, scoring impact materiality, scoring financial materiality, and consolidating results into a final determination. This process architecture provides the organising framework for the remaining units. Subject matter experts should draw primarily on EFRAG's ESRS 1 Basis for Conclusions and the EFRAG Implementation Guidance on Double Materiality Assessment as the authoritative specification of assessment requirements.

This unit covers the first stage of the double materiality process: identifying all sustainability matters that could potentially be material. ESRS 1 defines sustainability matters as environmental, social, and governance topics and subtopics. The unit covers the ESRS topic structure (ten topic standards, E1 through G1) and the ESRS sub-topic lists within each standard as the starting universe, then covers the tools used to narrow and prioritise from this universe: ESRS sector-specific guidance, SASB industry standards from F1, and peer company reporting analysis.

The unit also covers value chain scoping as a distinct element of the universe identification step. ESRS 1 requires organisations to consider impacts, risks, and opportunities from upstream (supply chain) and downstream (product use and end-of-life) activities, not only from own operations. The unit introduces the concept of a value chain map for materiality purposes — distinct from a supply chain risk map (covered in Track 6) — which identifies which stages of the chain are relevant for which potential topics, guiding the selection of stakeholders to engage in Unit B1.3.

This unit covers the design and execution of a stakeholder engagement process for double materiality evidence collection. ESRS 1 requires that stakeholder views inform the materiality assessment but does not specify a single engagement method; the unit covers the range of approaches used in practice and the documentation requirements each must satisfy for assurance purposes.

The unit identifies the four primary stakeholder categories: affected stakeholders (workers, local communities, supply chain workers), users of sustainability statements (investors, lenders, insurers, and other capital providers), trade unions and employee representative bodies, and regulatory bodies and standard setters. For each, it covers appropriate engagement formats — surveys, interviews, focus groups, public consultation analysis, regulatory guidance review — and the evidence each format generates for impact and financial materiality scoring.

The unit places particular emphasis on documentation requirements for assurance purposes. An ISAE 3000 limited assurance engagement requires that the assessor can trace each material topic determination to a documented stakeholder input or sector-based evidence source. The unit specifies the components of an assurance-ready engagement file: stakeholder identification record, engagement method description, input summary per stakeholder group, and the mapping between stakeholder inputs and each topic's materiality score.

This unit covers the quantitative and semi-quantitative scoring process for both impact materiality and financial materiality. For impact materiality, the EFRAG framework scores each actual or potential impact on severity (scale, scope, and for negative impacts, irremediability) and likelihood (for potential impacts only). The unit works through the scoring criteria for each dimension, illustrating with four case examples: a negative actual impact, a negative potential impact, a positive actual impact, and a positive potential impact.

For financial materiality, the EFRAG framework scores each sustainability-related risk or opportunity on the magnitude of potential financial effect (revenue, cost, asset value, capital access) and likelihood of the effect crystallising within the reporting horizon. The unit covers the three time horizons in ESRS 1 — short-term (up to one year), medium-term (one to five years), and long-term (beyond five years) — and the requirement to disclose which horizon applies to each assessed risk or opportunity.

The unit covers construction of the materiality matrix and application of a materiality threshold. EFRAG does not specify a single threshold; the unit covers the practical approaches used: absolute score thresholds, relative thresholds based on percentile distribution of scores, and sector-informed thresholds. The capstone of this unit is a completed scoring table and materiality matrix for the case organisation.

This unit covers the final stage of the double materiality process: consolidating impact and financial materiality scores into a final list of material topics, documenting the determination for board approval, and preparing the evidence file for external assurance. The consolidation step requires the assessor to review topics that scored above threshold on one dimension but below threshold on the other, and to document a final determination for each. The unit covers common edge cases: a topic that is financially material but where impact materiality evidence is weak; a topic where stakeholder input drives high impact materiality scores but sector analysis suggests low financial materiality; and a topic where the organisation argues for exclusion on specificity grounds under the ESRS 1 proportionality principle.

The board approval requirement under CSRD Article 29 is addressed: the governing body must approve the sustainability statement, which requires it to have reviewed and agreed with the materiality determination. The unit covers the format of a board materiality paper, including the summary matrix, key determination rationale for inclusion and exclusion decisions, and the confirmation of the engagement process adequacy. The module capstone deliverable is the complete double materiality assessment package: scoping universe, engagement summary, scoring tables, consolidated matrix with threshold documentation, final topic list, and a one-page board summary.

This unit maps the complete architecture of ESRS E1, covering all eleven disclosure requirements (E1-1 through E1-9, plus the mandatory disclosures under ESRS 2 GOV-3 and GOV-4 in relation to climate). It distinguishes the four structural sections: governance (who oversees climate at board and management level), strategy (how climate affects the business model and value chain, and how the organisation intends to transition), risk and opportunity management (how climate risks and opportunities are identified, assessed, and managed), and metrics and targets (quantitative performance data and forward-looking targets). This four-section structure mirrors the TCFD framework — a deliberate alignment that EFRAG built into ESRS E1 to reduce reporting burden for organisations already disclosing under TCFD.

The unit covers limited assurance as it applies to ESRS E1 disclosures under first-wave CSRD. Limited assurance requires that the assurance provider obtains sufficient evidence to conclude that nothing has come to their attention indicating the sustainability statement is not prepared in accordance with applicable criteria. The unit specifies what this means for the specificity and evidentiability of each disclosure section: generic policy statements without specific commitments, quantitative targets without methodology references, and governance descriptions without named accountability assignments do not meet the limited assurance standard.

This unit covers preparation of the governance and strategy sections of the ESRS E1 disclosure. The governance section (E1-GOV, referencing the cross-cutting governance disclosures in ESRS 2) requires documentation of: which board-level body has oversight of climate-related matters and its mandate; how the board receives climate-related information and at what frequency; which management-level roles have accountability for climate strategy and performance; and how climate-related considerations are integrated into business planning and remuneration.

The strategy section (E1-SBM-3 and E1-1) requires documentation of: the organisation's business model exposure to climate-related risks and opportunities across own operations and value chain; the time horizons over which material climate risks and opportunities are assessed; the resilience of the business strategy under at least two climate scenarios (including one below 2 degrees Celsius); and the climate transition plan, which must specify the decarbonisation actions, investment plans, and locked-in assets relevant to the pathway. The unit covers the minimum content requirements for a transition plan at limited assurance standard, and notes that a full transition plan aligned to GFANZ guidance is addressed in Track 4 Module 3.1.

This unit covers preparation of the quantitative metrics and targets sections of the ESRS E1 disclosure. The mandatory metrics section requires disclosure of absolute gross Scope 1, 2 (both location-based and market-based), and Scope 3 GHG emissions in CO2-equivalent tonnes using the GHG Protocol methodology established in F2. The unit maps the F2 inventory deliverable to the ESRS E1 disclosure format, covering the ESRS 2 cross-industry metric requirements (E1-6) and additional E1-specific data points including energy mix by type, energy intensity ratio, and the proportion of assets exposed to physical climate risk.

The targets section (E1-4) requires disclosure of GHG emission reduction targets covering at least Scope 1, 2, and Scope 3 categories material to the organisation. For each target, the disclosure must include: base year and base year emissions, target year, whether the target is absolute or intensity-based, the reduction percentage or intensity improvement, the GHG gases covered, and the target-setting methodology (such as SBTi Corporate Manual v2). The unit covers the distinction between near-term targets (typically 5 to 10 years) and long-term net-zero targets. SBTi target validation methodology is covered in depth in Track 1 Module 2.2; this unit covers only the disclosure format requirements for stating an SBTi-aligned or SBTi-validated target in ESRS E1.

This unit maps the complete architecture of ESRS S1 (Own Workforce), covering the seventeen disclosure requirements organised across the same four-section structure as ESRS E1. The unit covers the ESRS S1 definition of own workforce, which includes employees (those with an employment contract with the organisation) and non-employee workers (self-employed workers and workers from third-party providers who work under the organisation's supervision). The distinction affects the scope of the headcount, remuneration, and working conditions metrics.

The unit covers the conditions under which ESRS S1 applies as a material topic. Unlike ESRS E1, ESRS S1 has a single mandatory disclosure (the description of the approach to engagement with own workforce on impacts) and a larger set of disclosures that apply only when the topic has been determined material in the B1 assessment. The unit explains this structure and the practical implication: organisations that determine own workforce is not material must still make the single mandatory disclosure but do not need to report the full metrics set. For the case organisation, own workforce is material, so all requirements apply.

This unit covers preparation of the policy and action plan disclosures (S1-1 and S1-2) and the metrics disclosures (S1-7 through S1-17) for the case organisation. The policy disclosure requires documentation of the organisation's overall approach to managing impacts on own workers, including references to specific policies covering health and safety, working time, adequate wages, social dialogue, and freedom of association. The unit specifies the content requirements for each policy area and illustrates the difference between a generic policy statement (which does not meet ESRS S1 requirements) and a policy disclosure that specifies the geographic and workforce scope of the policy, the external standard it references, and the monitoring mechanism.

The metrics disclosures under ESRS S1 cover workforce composition (headcount by type, gender, and region), working conditions (percentage covered by collective bargaining agreements, percentage receiving adequate wages relative to statutory or living wage benchmarks), health and safety (accident rate, days lost, and fatality data), and diversity indicators including gender pay gap and representation in leadership. The unit works through the calculation methodology for each metric, specifying the data sources required, reporting period conventions, and the ESRS S1 disclosure format. The gender pay gap calculation receives specific attention because the ESRS S1 methodology differs from national reporting methodologies used in some jurisdictions.

This unit establishes the architectural logic of an ESG data management system by working backward from disclosure requirements to source data. It introduces the concept of a data lineage map: a structured document that traces each disclosed metric from the sustainability report back through the calculation, to the source data, to the business system and organisational unit that holds the data. This reverse-engineering approach ensures the data system is designed to produce exactly the metrics the disclosure frameworks require, rather than collecting available data and adapting it to disclosure formats.

The unit works through the data lineage for five ESRS E1 metrics (absolute Scope 1 GHG emissions, absolute Scope 2 GHG emissions market-based, total energy consumption from fossil fuels, percentage of revenue from EU Taxonomy-aligned activities, and the number of sites in areas at physical climate risk) and three ESRS S1 metrics (total headcount by type and gender, percentage of employees covered by collective bargaining agreements, and the lost-time injury rate). For each metric, the unit identifies the source data required, the business system that holds it (energy management system, HR information system, payroll system, EHS platform), and the organisational function responsible.

This unit covers the process of assigning data ownership across the organisation for each ESG data category identified in Unit 1.2.1. Data ownership means responsibility for ensuring data is collected accurately, the calculation methodology is applied correctly, quality review is completed before passing data to the central ESG reporting function, and supporting documentation is retained for assurance purposes. The unit distinguishes data ownership (the functional manager accountable for the data) from data stewardship (the individual who performs the collection and calculation work), and explains why both roles must be defined for an effective quality control system.

The unit covers the challenges of data ownership assignment in organisations where ESG data crosses multiple functions: energy data spans facilities management, production, and fleet; workforce data spans HR, payroll, and individual business unit management; health and safety data spans site management and EHS. It introduces the concept of a data ownership matrix (a responsibility assignment matrix for ESG data) and covers the escalation path for data quality disputes: who resolves a disagreement between a data owner and the ESG reporting function about methodology or data quality, and how that resolution is documented for the audit trail.

This unit covers the documentation of calculation methodologies for derived ESG metrics at the specificity required for third-party verification. The GHG Protocol Scope 1 and 2 methodology from F2 provides the foundation; this unit extends it to the organisational context by specifying how the methodology is documented at the entity level. The key principle is that a verifier who has never seen the organisation's operations should be able to reproduce the calculation from the methodology document alone.

The unit covers the five elements of a complete methodology document: the scope statement (which sources, legal entities, and reporting period are included), the activity data specification (what data is required, in what unit, for what time period), the emission factor specification (which factor is applied, from which source, at which version), the calculation formula (expressed algebraically), and the rounding and aggregation conventions. The unit provides a worked methodology document for Scope 1 stationary combustion and guides learners through drafting equivalent documents for Scope 2 market-based and for one ESRS S1 workforce metric. Version control requirements — including how methodology changes between reporting periods are documented and disclosed — are covered with reference to the GHG Protocol's base year recalculation policy.

This unit covers the design of the quality review control framework for ESG data, drawing on internal audit and financial control frameworks to adapt standard control concepts to ESG data characteristics. The four control types are each covered in turn: completeness controls (automated or manual checks that all required data has been submitted by all data owners), reasonableness controls (threshold-based checks that flag values outside expected ranges), consistency controls (period-over-period comparisons and cross-metric consistency checks), and authorisation controls (the sign-off workflow confirming a named data owner has reviewed and approved each data submission).

The unit covers audit trail design as a distinct system component. An audit trail for ESG data records every material action taken on a data point from initial collection to disclosure: who submitted the data, when it was submitted, what quality checks were applied, who approved it, whether any corrections were made and on what basis, and which version of the methodology was applied. The unit specifies the minimum elements of an audit trail record and covers the document retention requirements under CSRD, where companies must retain supporting documentation for the sustainability statement for the same period as financial statement documentation — typically five to ten years depending on jurisdiction.

This unit applies the data architecture knowledge from Units 1.2.1 through 1.2.4 to a gap analysis exercise. The gap analysis assesses the case organisation's current data collection capabilities against the full set of data requirements for ESRS E1 and S1 disclosure. For each required data point, learners classify the current status using a three-category framework: Category A (data available at required quality with existing documentation), Category B (data available but requiring process improvement for quality or documentation), and Category C (data not currently collected, requiring new process design or external sourcing).

The gap analysis output drives a prioritised improvement roadmap that sequences Category B and Category C gaps by two criteria: regulatory priority (which gaps affect mandatory disclosures that must be resolved before the first reporting period) and materiality impact (which gaps affect the metrics most significant to investor and assurance audiences). The roadmap specifies for each gap the target classification (A), the actions required to achieve it, the responsible function, and the estimated completion date relative to the first CSRD reporting deadline. The roadmap distinguishes mandatory disclosure data gaps (which have a non-negotiable regulatory timeline) from material-topic metric gaps (which have some flexibility based on data availability provisions in ESRS 1).

This unit provides the structural and scoring overview necessary before working through the questionnaire itself. It covers the CDP questionnaire format (a sequence of numbered questions organised into modules), the response format requirements (multiple choice, free text, quantitative tables, and file uploads), the annual CDP disclosure cycle (submission window, scoring release timeline, and the data verification option), and the audience for each question (some questions feed into investor scoring, some into supply chain buyer data requests, and some into both).

The scoring methodology is covered in detail, working through the most recent published version: the point allocation across the five thematic areas, the concept of dependent questions (where a positive response to one question is required before the following question is scored), and the disqualification criteria that prevent a response from achieving Leadership regardless of other scores — such as failure to disclose Scope 1 and 2 emissions or failure to have a board-level climate oversight mechanism. The unit maps the scoring requirements to the ESRS E1 content produced in Module 1.1, identifying which sections can be addressed with direct reference to the 1.1 deliverable and which require CDP-specific analytical work.

This unit covers the CDP governance module, which asks about board-level oversight of climate change, management-level accountability, and the integration of climate considerations into incentive structures. The Leadership-band requirements are more specific than the equivalent ESRS E1-GOV disclosure: CDP requires identification of a named board committee or individual with climate oversight responsibility, documentation of the frequency of board-level climate reviews, and confirmation that climate-related incentive mechanisms exist for senior management with specific KPI examples.

The unit works through the governance section question by question, showing a Management-level response and an A-List response for each question and explaining precisely what differentiates them. The most common reason for governance responses failing to reach Leadership is insufficient specificity: stating that the board oversees climate risks without specifying the committee, the review frequency, or the information provided to the board. The unit guides learners through drafting governance section responses for the case organisation at A-List standard by building on the board oversight documentation from Module 1.1 Unit 1.1.2 and adding the CDP-specific elements.

This unit covers the CDP risk and opportunity assessment module, the most analytically demanding section of the questionnaire at Leadership level. CDP requires identification of physical and transition risks and opportunities, classification by type and time horizon, financial impact quantification in monetary terms (a specific Leadership-level requirement that ESRS E1 handles through a different framework), and documentation of the management response including the cost of the response. The financial quantification requirement is the element that most commonly prevents Management-level responses from reaching Leadership: many organisations can identify and describe climate risks but have not produced the financial impact estimates that CDP requires.

The unit covers the methodology for producing CDP-compatible financial impact estimates for climate risks, distinguishing two approaches: qualitative range estimates based on scenario analysis (acceptable for some risk types at Leadership) and quantitative point estimates derived from a financial model (required for the most significant risks at Leadership). This unit covers the minimum quantification approach required for CDP Leadership scoring, using the case organisation's top two climate risks as worked examples. The connection to the transition risk modelling covered in Track 5 Module 1.3 is noted for learners who will need to build full quantitative risk models.

This unit covers the CDP business strategy module, which asks how climate-related risks and opportunities are integrated into strategic planning and financial planning. The Leadership-level requirements include: documentation that the organisation uses climate scenario analysis to assess strategic resilience, specification of the scenarios used (including at least one below 2 degrees Celsius), documentation of the financial planning implications of climate risks and opportunities (capital allocation changes, revenue impact assessments, asset impairment reviews), and evidence that climate is integrated into the formal business planning cycle.

The unit covers the scenario analysis requirement in depth because it is both the most frequently cited Leadership differentiator and the most technically complex element of the business strategy section. It explains the types of scenarios accepted by CDP (IPCC, IEA, NGFS, and company-developed scenarios), the minimum analytical requirements for a scenario analysis response to reach Leadership level, and the difference between a scenario analysis that meets CDP's Leadership standard and the full NGFS scenario analysis covered in depth in Track 4 Module 2.3 and Track 5 Module 2.1.

This unit covers the CDP targets and performance module and the engagement module, then guides learners through the module capstone exercise: a scored gap analysis that identifies precisely what changes to a Management-level response would achieve Leadership status. The targets and performance section at Leadership level requires: Scope 1 and 2 emissions data verified by a third party (or an explanation if not), Scope 3 emissions data covering the categories most relevant to the sector, at least one GHG emission reduction target with a stated ambition level that CDP recognises (SBTi-validated, Paris-aligned, or a target with documented methodology), and progress reporting against the target.

The engagement module covers value chain engagement (with suppliers and customers on climate), policy engagement, and industry engagement. Leadership-level responses require specific examples of engagement activities with outcomes, not general statements of intent. The gap analysis capstone exercise provides learners with a pre-scored Management-level CDP response for the case organisation and requires them to: identify the specific response elements that prevent each section from reaching Leadership, draft the revised responses that would achieve Leadership, and calculate the projected score improvement. Course reviewers should assess the gap analysis against the most recent version of the CDP scoring methodology.