ESRS 2 — Material Impacts, Risks and Opportunities and…

Q: How do I use the SBM-3 page to draft the disclosure from scratch?

Start with the plain-language explainer, then work through the step-by-step preparation section and the draft-output section. The page is designed to help you turn source data into a draft narrative, table and content-index line rather than to act as an official standard.

Q: What data do I need to collect for SBM-3 before I start writing?

The page lists the datapoints to prepare, including the interaction with strategy, the strategic and planned response, financial effects, assessment periods, planning basis and any qualitative explanation where figures are not available. Use that list as your collection checklist before drafting.

Q: How should I decide the scope and methodology for SBM-3?

Use the page’s assessment-period and planning-basis datapoints, together with the resilience assessment and assessment method items, to define what period you are covering and how you reached the result. Keep the approach consistent with the evidence you can show in the pack.

Q: Who should own the SBM-3 disclosure and the underlying data?

The page is set up for use by a sustainability or ESG manager, HR or data owner, and an assurance reviewer, so ownership should sit with the people who can explain the data and provide evidence. Assign clear responsibility for each datapoint and for the final narrative before you draft.

Q: What evidence pack do I need to make SBM-3 assurance-ready?

The page includes a five-item evidence pack for assurance readiness, alongside six assurance claims to verify. Use those items to assemble the documents and support that show how the disclosure was prepared and what it is based on.

Q: What are the common mistakes to avoid when preparing SBM-3?

The page lists common reporting gaps and mistakes, so it is intended to help you spot missing data, weak explanations and unsupported claims before submission. Check the gaps list against your draft and evidence pack to reduce rework.

Q: How do I use the synthetic example disclosures on the SBM-3 page?

Use the synthetic examples as a model for structure, level of detail and how the quantitative table is presented. They are illustrative only, so adapt the format to your own facts and keep any numbers internally consistent.

Q: What should I put in the narrative if I cannot quantify a financial effect for SBM-3?

The page includes a datapoint for why something is not quantified and a qualitative financial effect item, so you can explain the position rather than leaving a blank. Use the narrative starters in the draft-output section to turn that explanation into a clear draft.

Q: How do I use the workbook and printable Library Card for SBM-3?

The Download Centre provides a Prep & Assurance workbook in .xlsx format and a printable Library Card in .pdf format. Use the workbook to organise preparation and assurance checks, and the card as a quick reference while drafting.

Q: What does the 'From company reports' table help me do for SBM-3?

It links to real published reports at the pages where the topic is disclosed, so you can see how others have presented similar information. Use it as a practical reference point, not as a template or official mapping.

Disclosure focus

The practical focus is on whether the organisation has considered its full business, not just a few headline sites or activities. It should describe how the material matters are reflected across operations, value chain and decision-making, and where there are differences in relevance by geography, business line or site type. The aim is to show the breadth of coverage and the real strategic implications, in a way that is clear and specific to the organisation.

This LRA educational guidance supports disclosure preparation. For the exact requirements, always refer to the official European Commission source.

Request the data

Request the strategy-and-financial impact evidence

Translate the disclosure into an internal business question — then adapt it to your organisation's own language.

How do the main sustainability-related issues connect to the business model, what actions are being taken, and what financial effects or planning assumptions support that story?

Use your organisation’s own labels first, then map them to the reporting categories. For example, if you talk about business drivers, investment cases, budget pressures, forecast assumptions, or balance sheet items internally, keep that language in the request and only translate it later for reporting.

Weak request

Please provide the ESRS 2:SBM-3 evidence for material impacts, risks and opportunities, including interaction with strategy and business model, financial effects, resilience, and any non-quantified items.

Why it fails: It uses framework language that many internal owners will not recognise, so they may not know which pack, model, or decision paper to send. It also does not point to the business issue, the source file, the planning basis, or the specific financial outputs needed.

Better request

Please send the latest internal pack for [internal issue name] that shows how it affects the business model or plan, what response is underway or planned, and any revenue, cost, asset, liability, or cash impacts. Include the scenario or planning basis, the time view used, and any items that were not quantified with the reason and the line items likely affected.

Formal email template

Subject: Request for strategy and financial impact evidence for [reporting period]

Dear [name/team],

We are preparing the sustainability reporting pack and need your help with the business impacts linked to [internal issue name].

Please share the material you use internally that explains:
- how this issue affects the business model or operating plan;
- what response is already underway or planned;
- any financial effects you have identified, including revenue, cost, asset, liability, or cash impacts;
- the planning basis, time view, and any scenario or assumption set used;
- any cases where the effect could not be quantified, together with the reason and the related line items that may be affected.

Please send the source file or extract, plus a short note on the boundary, period, and owner for the information. If there are multiple versions, please indicate which one is the latest approved or management-reviewed version.

Please adapt this to your organisation’s own terminology and check the official source before sign-off.

Kind regards,
[preparer name]
[team]
[contact details]

Short Teams / Slack version

Hi [name/team] — could you send the latest internal pack for [internal issue name] covering: business impact, current/planned response, any revenue/cost/asset/liability/cash effects, the planning basis, and any qualitative-only items with the reason they were not quantified? Please include the period, boundary, source file, and owner. Please adapt this to your organisation’s own terminology and check the official source before sign-off. Thanks, [name]

Industry examples

Manufacturing

Context. A plant team tracks energy cost exposure, equipment downtime risk, and capex for process changes in monthly operations and budget packs.

Adapted request. Please share the latest operations and finance pack for [internal issue name] showing how it affects plant output, cost base, and investment plan, plus any revenue, cost, asset, liability, or cash impacts. Include the budget or scenario basis, the time view, and any items left qualitative with the reason.

Example response. A workbook with plant-level assumptions, a capex note, a forecast bridge, and a short narrative on why one risk was not quantified because the estimate range was too wide.

Retail

Context. A trading and planning team monitors supplier disruption, product mix changes, margin pressure, and stock impacts through forecast and trading updates.

Adapted request. Please send the latest trading and planning pack for [internal issue name] showing how it affects sales, margin, stock, and cash, together with the response plan and any scenario assumptions used. If any effect was not quantified, please explain why and note the line items likely affected.

Example response. A monthly trading pack with sales and margin sensitivities, stock write-down assumptions, a scenario summary, and a note that one supplier risk was described qualitatively because the timing of disruption was uncertain.

Draft your disclosure

Notes that turn data into a disclosure

LRA training templates — adapt them to your organisation, and check the official source before sign-off.

Method note

Set out how the figures were prepared, including what each measure covers, the basis used for any estimates or scenarios, the time periods applied, and the reason where an effect is described without a number.

Context note

Explain what the reported amounts and descriptions mean for the business, linking the interaction, the response taken, the expected financial effects, and the parts of the accounts that may be affected.

Fluctuation statement

If the numbers or expectations change, point to shifts in the underlying issue, the response plan, the time horizon, or the planning assumptions used to estimate the effect.

Content index entry

SBM-3 Material Impacts, Risks and Opportunities and Their Interaction with Strategy and Business Model — [location / page] / [notes]

Download Centre

Preparation tools & forms

Download preparation tools for SBM-3 with free verified email access for 24 hours. Source-report links remain public.

Free · Email access

01XLSPrep & Assurance workbookDatapoints, risks, evidence to check, owner and evidence pack.Get it free ↧ 02XLSData-request packRequest email, message template, response fields and sign-off structure.Get it free ↧ 03PDFLibrary CardPrintable one-page summary of this disclosure card.Get it free ↧

Check

For each claim, check the evidence

We based the coverage figure on the same boundary we used for the rest of the report, and we can show why any sites, entities or activities were left out.
Risk Assurer checks whether the boundary is consistent, whether exclusions were deliberate rather than accidental, and whether the figure could be overstated or understated by missing parts of the business.
Evidence to check Boundary memo; list of included and excluded entities/sites/activities; consolidation or reporting scope workpapers; management sign-off on scope decisions; reconciliation of the coverage figure to underlying population data.
We explained how the disclosed operations link back to our business model and strategy, and we kept working papers showing the basis for that mapping.
Risk Assurer probes whether the narrative is supported by evidence, whether the link to strategy is genuine, and whether material items were omitted because they were not traced through the business model.
Evidence to check Strategy papers; business model diagrams; materiality assessment outputs; mapping of impacts, risks and opportunities to business activities and value chain stages; board or management papers approving the linkage.
We set out the actions already taken and the actions planned to deal with the identified matters, and we retained the decision papers behind those choices.
Risk Assurer checks whether the response described is real, current and approved, and whether the report overstates progress or omits planned actions that are still needed.
Evidence to check Action plans; investment or change programme approvals; project status reports; governance minutes; implementation trackers; evidence of completed and planned measures.
We described the current financial effect using the figures we could support, and where we did not quantify it we kept the reasons and the related line-item references.
Risk Assurer probes whether the numbers tie to finance records, whether any unquantified items were properly justified, and whether the affected statement lines were identified correctly.
Evidence to check Finance extracts; calculation sheets; management estimates; audit trail to ledger or reporting packs; rationale for any non-quantified items; mapping to financial statement line items.
We prepared the forward-looking effect view using our planning assumptions and scenario work, and we can show the time bands and the basis used for each estimate.
Risk Assurer checks whether the outlook is grounded in approved assumptions, whether the time horizons are consistent, and whether the estimates are too speculative or selectively presented.
Evidence to check Budget and forecast packs; scenario analysis files; planning assumptions; sensitivity analyses; time-horizon definitions; governance approval of the modelling basis.
Where we did not put a number on an effect, we recorded why, what it means in practice, and which financial statement lines could be touched.
Risk Assurer probes whether the non-quantification is justified, whether the qualitative description is specific enough, and whether the linked financial lines are complete and accurate.
Evidence to check Non-quantification rationale; internal review notes; qualitative impact summaries; mapping to affected line items; evidence that quantification was considered and rejected for stated reasons.

Evidence pack to prepare

The governing policy or written commitment behind this disclosureA methodology / definition note setting out how the disclosure was scoped and preparedSource-system exports the figures or facts were drawn fromThe internal approval / sign-off record for the disclosure before publicationMinutes or records evidencing the relevant engagement or consultation

Common reporting gaps

The information is presented without a date or as-at point.
The scope or boundary of the statement is left undefined.
Key terms are used inconsistently across the report.
Material changes since the previous period are not disclosed.
Assertions are made without supporting detail or a source record.
Boilerplate is used that does not actually answer what is asked.

Where drafts go wrong

Mistakes to avoid and where judgement is needed

The left column is what preparers get wrong while collecting; the right column is where you will have to make and explain a judgement.

Mistakes to avoid

Wrong ownerThe request goes to a team that does not hold the underlying records, so the answer is built from second-hand knowledge instead of the operational source.
Framework language onlyPeople ask for the data using reporting jargon rather than the business’s own terms, and the right team cannot map the request to its records.
Scope left vagueNo one states which part of the business, which activities, or which locations are in scope, so different teams collect different slices of the same topic.
Wrong period basisThe team pulls figures from a different reporting window or cut-off date, so the dataset does not match the period being reported.
Mixed counting basisHeadcounts, values, or event totals are combined even though they were measured on different bases, which makes the final numbers inconsistent.
Source labels stripped outOriginal file names, system tags, or reference codes are lost during consolidation, so the reviewer cannot trace each figure back to its source.
Separate populations mergedData for distinct groups, sites, or business lines is rolled together even though they should stay separate, which hides differences that matter.
Evidence trail missingThe pack contains the numbers but not the supporting metadata, approvals, or sign-off history, so nobody can show how the data was checked.

＋ Show 4 more

Judgement needed

Acquisitions, disposals, and perimeter shiftsUse the reporting boundary that matches the period you are explaining, and if a buy-in, sale, or reorganisation changes the group of entities covered, say when the change happened and whether the figures include the old or new perimeter.
Different local definitions for the same topicWhere countries or business units use different operational definitions, pick one basis for the group narrative, explain the main differences, and show any material split or reconciliation needed to avoid mixing unlike data.
People or activities near the edge of scopeDecide consistently whether to include borderline workers, sites, products, or customers, then disclose the inclusion rule and any exclusions so readers can see how close-to-the-line cases were handled.
Current period, opening position, or forward-looking viewState clearly whether the effect is being shown using the latest period, a starting point, or a future expectation, and keep the basis the same across the linked narrative and figures unless you explain the change.
Measured figures versus management estimatesIf a number is partly observed and partly estimated, say which parts come from records and which come from judgement, and explain the main assumptions, methods, and any known limits on accuracy.
Rounding and small differencesApply one rounding approach across the disclosure, and if totals do not exactly match the parts because of rounding, note that the difference is only a presentation effect.
Privacy limits on location or people dataWhen detailed breakdowns would identify individuals or sensitive sites, group the information at a higher level, explain the aggregation rule, and make clear what has been withheld for privacy reasons.
Choosing the time window for expected financial effectsIf the expected effect could sit in more than one period, set out the time bands you used, explain why they fit the business case, and keep the same bands wherever the analysis is repeated.
Selecting the planning or stress-test basisWhen several internal plans, forecasts, or stress tests exist, identify the one used for the explanation, say why it is the best fit for the issue, and describe any key assumptions that drive the result.
Linking the issue to the affected line itemsIf an issue could flow through several parts of the accounts, name the line items most likely to move, explain the route from the operational issue to those items, and avoid implying precision where the link is only directional.

＋ Show 6 more

Examples

How it reads on the page

Synthetic, written by LRA — not from a company report, not text from any standard.

Illustrative (synthetic) example — industrial equipment manufacturing

We explain that a shift in customer demand toward lower-emission products is already changing how we sell, design and source components, so the board and its committees have approved a product redesign programme and a supplier-screening plan for the next two years. In this scenario, we expect a €120 million revenue effect, €18 million of extra operating spend, a €9 million balance-sheet effect and a €6 million cash effect, with the main lines likely touched being revenue, cost of sales, inventories, trade payables and operating cash flow.
- Our forward view is based on a three-scenario planning exercise covering the next 12, 24 and 60 months, using internal demand forecasts and transition assumptions; we expect the largest changes in the medium term, with a smaller effect in the short term and a more material shift by year five.
- We have not put numbers on some parts of the effect because the timing and size are still too uncertain; those unquantified items are described qualitatively as possible margin pressure, higher working-capital needs and occasional asset write-down risk, and they may affect revenue, operating profit, inventories, receivables and cash flow.
- We judge the business model to be resilient because the planned redesign, supplier changes and pricing actions should allow us to keep serving core customers even if the transition is slower or faster than expected.

Synthetic, illustrative only; figures are internally consistent and intended to show how a reporter might describe the interaction, response, quantified effects, unquantified effects and resilience in plain language.

Illustrative (synthetic) example — food and beverage processing

We describe how hotter summers and water constraints are already influencing sourcing, production scheduling and product mix, and our management team has set a response plan covering water efficiency, recipe reformulation and selective price changes. On the basis of a climate-stress test and internal planning assumptions, we expect a €75 million revenue effect, €11 million of added costs, a €4 million asset and liability effect and a €3 million cash effect, with the most likely affected lines being sales, production costs, property and equipment, provisions and operating cash flow.
- Our outlook uses a two-path planning basis over the short, medium and longer term, and we expect the financial effect to build gradually rather than arrive all at once.
- We have left some items unquantified because the evidence is not yet strong enough to support a reliable estimate; qualitatively, those items could mean lower volumes in peak periods, higher utility and logistics spend, and possible impairment pressure on certain sites, affecting sales, operating expenses, fixed assets, provisions and cash generation.
- Even so, we consider the group reasonably robust because the response plan gives us options to shift sourcing, adjust production and protect supply to key customers if conditions worsen.

Synthetic, illustrative only; figures are internally consistent and intended to show a second plausible reporter with a different sector and a different pattern of effects.

Quality ladder

Basic
I have identified 6 material business issues.
Better
I have identified 6 material business issues, split across 2 impact areas, 2 risk areas and 2 opportunity areas, based on our latest review.
Best
I have identified 6 material business issues across our operations and value chain, covering 2 near-term and 4 longer-term items, using our latest planning review, and the increase from last year reflects two newly assessed supply-chain risks and one delayed opportunity because market timing shifted.

Check your understanding

Scenarios to work through

A manufacturer has identified a major transition risk from tighter product standards. The board has approved a shift toward lower-emission product lines, but the finance team has not yet linked that shift to any forecast changes.

QWhat should the preparer do when describing how this issue connects to the business model and strategy?

Reveal model answer →

A services group expects a new customer requirement to reduce revenue in one region over the next two years, while also increasing compliance spend and contract assets. Management has a rough estimate for revenue and costs, but not for the balance sheet effect.

QHow should the preparer decide what to include about the financial consequences?

Reveal model answer →

A retailer has run an internal planning exercise using three climate pathways and a five-year budget cycle. The exercise shows that one pathway would materially affect store refurbishment timing, but the team is unsure whether to present the analysis as a resilience assessment or as a general planning input.

QWhat is the right judgement on how to explain the basis for the analysis?

Reveal model answer →

A mining group has identified a long-term water-stress risk that could affect production, but the impact is too uncertain to quantify reliably today. The team can describe likely operational effects and knows the issue may affect impairment testing and provisions.

QWhat should the preparer do when the effect cannot be measured with confidence?

Reveal model answer →

✓ Knowledge Hub AI Assistant · Human-in-the-loop

Ask the Knowledge Hub AI Assistant about this disclosure

Get practical answers for your reporting context.

Try How do I prepare SBM-3? What data do I need to collect? What mistakes should I avoid?

Framework references

Relevant ESRS requirements and related disclosures

ESRS

SBM-3

within ESRS 2: General Disclosures

Open official source →

Guides that settle this question

ESRS 2 General Disclosures: basis of preparation, governance, strategy, business model, stakeholders, material IROs, content index and GDR →

Related & explore

General Basis for Preparation of Sustainability Statements → Card Disclosures in Relation to Specific Circumstances → Card Actions and Resources in Relation to Material Sustainability Matters → Card Metrics in Relation to Material Sustainability Matters → Card Policies Adopted to Manage Material Sustainability Matters → Card Browse all disclosures →

More in ESRS 2 →Browse full catalogue →Search all disclosures →

FAQ

Questions this page answers

How do I use the SBM-3 page to draft the disclosure from scratch?+

What data do I need to collect for SBM-3 before I start writing?+

How should I decide the scope and methodology for SBM-3?+

Who should own the SBM-3 disclosure and the underlying data?+

What evidence pack do I need to make SBM-3 assurance-ready?+

What are the common mistakes to avoid when preparing SBM-3?+

How do I use the synthetic example disclosures on the SBM-3 page?+

What should I put in the narrative if I cannot quantify a financial effect for SBM-3?+

How do I use the workbook and printable Library Card for SBM-3?+

What does the 'From company reports' table help me do for SBM-3?+

How do I turn SBM-3 data into a draft output the business can review?+

	Report A	Report B	Report C
Datapoint 1	✓ p.213	unclear	✓ p.87
Datapoint 2	✓ p.214	—	✓ p.90

Material Impacts, Risks and Opportunities and Their Interaction with Strategy and Business Model

What to collect before drafting

Interaction with strategy

Strategic response

Planned response

Revenue effect

Cost effect

Balance sheet effect

Cash movement effect

Expected financial change

Assessment periods

Planning basis

Why not quantified

Qualitative financial effect

Affected statement lines

Resilience assessment

Assessment method

Assessment periods used

How to prepare it

Request the strategy-and-financial impact evidence

Notes that turn data into a disclosure

Preparation tools & forms

For each claim, check the evidence

We based the coverage figure on the same boundary we used for the rest of the report, and we can show why any sites, entities or activities were left out.

We explained how the disclosed operations link back to our business model and strategy, and we kept working papers showing the basis for that mapping.

We set out the actions already taken and the actions planned to deal with the identified matters, and we retained the decision papers behind those choices.

We described the current financial effect using the figures we could support, and where we did not quantify it we kept the reasons and the related line-item references.

We prepared the forward-looking effect view using our planning assumptions and scenario work, and we can show the time bands and the basis used for each estimate.

Where we did not put a number on an effect, we recorded why, what it means in practice, and which financial statement lines could be touched.

Mistakes to avoid and where judgement is needed

Mistakes to avoid

Judgement needed

How it reads on the page

Scenarios to work through

Ask the Knowledge Hub AI Assistant about this disclosure

Check your text

Relevant ESRS requirements and related disclosures

Questions this page answers

Secure your enrolment

Material Impacts, Risks and Opportunities and Their Interaction with Strategy and Business Model

What to collect before drafting

Interaction with strategy

Strategic response

Planned response

Revenue effect

Cost effect

Balance sheet effect

Cash movement effect

Expected financial change

Assessment periods

Planning basis

Why not quantified

Qualitative financial effect

Affected statement lines

Resilience assessment

Assessment method

Assessment periods used

How to prepare it

Request the strategy-and-financial impact evidence

Notes that turn data into a disclosure

Preparation tools & forms

For each claim, check the evidence

We based the coverage figure on the same boundary we used for the rest of the report, and we can show why any sites, entities or activities were left out.

We explained how the disclosed operations link back to our business model and strategy, and we kept working papers showing the basis for that mapping.

We set out the actions already taken and the actions planned to deal with the identified matters, and we retained the decision papers behind those choices.

We described the current financial effect using the figures we could support, and where we did not quantify it we kept the reasons and the related line-item references.

We prepared the forward-looking effect view using our planning assumptions and scenario work, and we can show the time bands and the basis used for each estimate.

Where we did not put a number on an effect, we recorded why, what it means in practice, and which financial statement lines could be touched.

Mistakes to avoid and where judgement is needed

Mistakes to avoid

Judgement needed

How it reads on the page

Scenarios to work through

Ask the Knowledge Hub AI Assistant about this disclosure

Check your text

Relevant ESRS requirements and related disclosures

Questions this page answers

Get in touch