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ESG Starter Toolkit
A practical guide to ESG reporting, CSRD compliance, GHG accounting, and climate risk management
Valued at £99 — yours free
Contents
- Section 1: ESG Basics — What It Is and Why It Matters
- Section 2: CSRD Checklist — Are You Ready?
- Section 3: GHG Calculation Starter Template
- Section 4: Climate Risk Framework Overview
1
ESG Basics
What ESG is, why it matters, and what your organisation needs to know
ESG stands for Environmental, Social, and Governance. It is a framework used by investors, regulators, and organisations to assess sustainability performance and non-financial risks.
The Three Pillars
| Pillar | What It Covers | Key Examples |
|---|
| Environmental (E) | Climate change, emissions, resource use, biodiversity | GHG emissions, energy use, water consumption, waste |
| Social (S) | People, communities, labour, human rights | Diversity, employee wellbeing, supply chain labour |
| Governance (G) | Leadership, accountability, ethics, transparency | Board composition, anti-corruption, audit quality |
Why ESG Matters Now
- Regulatory pressure: CSRD (EU), TCFD (UK), SEC climate rules (US), ISSB IFRS S1/S2 (global) are all creating mandatory reporting obligations.
- Investor demand: Over $35 trillion of assets under management now apply ESG screens.
- Supply chain requirements: Large corporates are asking suppliers to disclose ESG data.
- Cost reduction: ESG efficiency measures (energy, waste, water) directly reduce operating costs.
- Talent attraction: 73% of professionals consider ESG credentials when choosing employers.
Key Insight: ESG is no longer optional. The question is not whether to engage with ESG — it is how to do it effectively and efficiently.
Key ESG Frameworks to Know
- CSRD Corporate Sustainability Reporting Directive (EU) — mandatory for large EU companies
- TCFD Task Force on Climate-related Financial Disclosures — climate risk reporting
- ISSB International Sustainability Standards Board — global baseline (IFRS S1 & S2)
- GRI Global Reporting Initiative — widely used voluntary standard
- GHG Protocol The standard for measuring greenhouse gas emissions
- SBTi Science Based Targets initiative — net zero target-setting
2
CSRD Checklist
A practical readiness checklist for the EU Corporate Sustainability Reporting Directive
Who is in scope? CSRD applies to large EU companies (>500 employees from 2024), large non-listed EU companies (>250 employees from 2025), and listed SMEs (from 2026). Non-EU companies with significant EU revenue will also be included.
Phase 1: Governance & Scope
- Determine whether your organisation is in scope for CSRD and when
- Identify the consolidation scope for reporting (group vs. subsidiary level)
- Assign board-level oversight responsibility for sustainability
- Establish a cross-functional ESG working group
- Review existing sustainability reports and identify gaps vs. ESRS requirements
Phase 2: Double Materiality Assessment
- Understand the difference between impact materiality and financial materiality
- Map your value chain (upstream suppliers, own operations, downstream)
- Identify material impacts, risks, and opportunities (IROs) across all ESRS topics
- Conduct stakeholder engagement to validate material topics
- Score and prioritise IROs using a defined threshold
- Document the DMA process for audit purposes
Phase 3: Data Collection & Systems
- Identify data gaps for each material ESRS topic
- Design data collection templates for each business unit
- Establish data quality controls and audit trails
- Set up GHG emissions calculation (Scope 1, 2, and material Scope 3 categories)
- Collect energy, water, waste, and biodiversity data
- Review HR and social data collection processes
Phase 4: Disclosure & Assurance
- Draft disclosures against each applicable ESRS standard
- Prepare the ESRS 2 General Disclosures (mandatory for all in-scope companies)
- Prepare transition plan and climate scenario disclosures (E1)
- Engage assurance provider for limited assurance (required from 2026)
- Integrate sustainability statement into the management report
- Tag disclosures in XBRL/inline XBRL for digital reporting
3
GHG Calculation Starter Template
A simple table-based approach to estimating your organisation's greenhouse gas emissions
Use the GHG Protocol Corporate Standard as your baseline. All emissions must be converted to tonnes of CO₂ equivalent (tCO₂e) using emission factors from Defra (UK), EPA (US), or IPCC.
Formula: Activity Data × Emission Factor = GHG Emissions (tCO₂e)
Scope 1 — Direct Emissions
| Source | Activity Data Unit | Emission Factor Source | Annual Quantity | tCO₂e |
|---|
| Natural gas (heating) | kWh | Defra 2024 | ____ | ____ |
| Diesel (fleet vehicles) | Litres | Defra 2024 | ____ | ____ |
| Petrol (fleet vehicles) | Litres | Defra 2024 | ____ | ____ |
| Refrigerants (fugitive) | kg | IPCC AR6 | ____ | ____ |
| Process emissions | tonne product | Industry-specific | ____ | ____ |
| Scope 1 Total | | | | ____ |
Scope 2 — Indirect Energy Emissions
| Source | Activity Data Unit | Method | Annual Quantity | tCO₂e |
|---|
| Grid electricity (location-based) | kWh | Location-based | ____ | ____ |
| Grid electricity (market-based) | kWh | Market-based | ____ | ____ |
| District heating/cooling | kWh | Supplier factor | ____ | ____ |
| Scope 2 Total | | | | ____ |
Scope 3 — Value Chain Emissions (Key Categories)
| Category | Description | Method | tCO₂e |
|---|
| Cat 1: Purchased goods & services | Upstream supply chain | Spend-based | ____ |
| Cat 3: Fuel & energy activities | Upstream extraction of fuels used | Activity-based | ____ |
| Cat 5: Waste generated | Waste from own operations | Activity-based | ____ |
| Cat 6: Business travel | Flights, rail, hotel stays | Activity-based | ____ |
| Cat 7: Employee commuting | Employee travel to work | Survey-based | ____ |
| Cat 11: Use of sold products | Consumer use-phase emissions | Activity-based | ____ |
| Scope 3 Total | | | ____ |
Total GHG Inventory
| Scope | tCO₂e | % of Total |
|---|
| Scope 1 | ____ | ____% |
| Scope 2 (market-based) | ____ | ____% |
| Scope 3 | ____ | ____% |
| Grand Total | ____ | 100% |
Tip: For Scope 3 spend-based estimates, use the Defra spend-based emission factors or the EEIO (Environmentally Extended Input-Output) models. For a fully automated tool, see our Advanced GHG Emissions Calculator on the BTW AI marketplace.
4
Climate Risk Framework Overview
Understanding physical and transition climate risks — aligned with TCFD recommendations
Climate risk is now a mainstream financial and operational risk. The TCFD framework (adopted by ISSB, CSRD, and regulators globally) organises climate risks into two main categories:
Physical Risks
Risks arising from the physical impacts of climate change on assets, operations, and supply chains.
| Type | Examples | Time Horizon |
|---|
| Acute | Extreme heat events, flooding, hurricanes, wildfires | Near to medium term |
| Chronic | Sea level rise, shifting precipitation, temperature increases | Medium to long term |
Transition Risks
Risks arising from the transition to a lower-carbon economy.
| Category | Examples |
|---|
| Policy & Legal | Carbon pricing, fuel standards, litigation risk, CSRD fines |
| Technology | Disruption from clean technologies, stranded fossil fuel assets |
| Market | Shifts in consumer preferences, commodity price changes |
| Reputational | Greenwashing accusations, investor pressure, media scrutiny |
Climate Scenario Analysis — 3-Step Process
- Select scenarios: Use NGFS (Network for Greening the Financial System) or IPCC SSP scenarios. Recommended: Net Zero 2050 (orderly transition), Delayed Transition, and Hot House World (4°C).
- Identify exposure: Map which assets, operations, and revenue streams are exposed to each physical and transition risk under each scenario.
- Assess financial impact: Quantify or qualify the potential financial impact on revenue, costs, capex, and asset values under each scenario.
TCFD Disclosure Requirements
- Governance: Board oversight and management role in climate risk
- Strategy: Climate risks and opportunities, scenario analysis results
- Risk Management: Process for identifying and assessing climate risks
- Metrics & Targets: GHG emissions (Scope 1, 2, 3), reduction targets, progress
Ready to go further? BTW AI's Company-Level Climate Scenario Analysis Dashboard includes pre-loaded NGFS scenario data, physical risk heatmaps, and TCFD-aligned output reports — available for just £5 on our marketplace.