This study examines the evolution, structure, and implications of the European Sustainability Reporting Standards (ESRS), as a tool of sustainability accounting. The historical review starts with the Brundtland Report and concludes with the Corporate Sustainability Reporting Directive (CSRD). The paper offers a historical review of the integration of environmental and social concerns into corporate reporting. In addition, it analyzes the European legislative framework for non-financial disclosures and explores the structure and characteristics of the ESRS (illustrating good and bad practices for each standard). How the standards influence strategic business decisions and reshape corporate governance is part of our analysis. Furthermore, the paper highlights key strengths of the ESRS, while also addressing critical limitations, conflicts, risks and general challenges. The study concludes with suggestions for future improvements on the ESRS framework, highlighting the need for simplification, technological support and international convergence. It also proposes a research agenda for advancing the field of sustainability accounting.
Keywords: Accounting, Environmental, European sustainability reporting standards (ESRS), Social, and governance (ESG), corporate sustainability reporting directive (CSRD), non-financial reporting, sustainability accounting
