B1 and B2 Explained: Company Profile, Practices, Policies and Future Initiatives

How to report the undertaking accurately - from legal profile to sustainability maturity

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B1 and B2 sit next to each other because they answer two foundational questions. B1 tells the reader which undertaking or group is reporting, which module it has selected and which legal, financial, workforce and site facts define the report. B2 tells the reader what the undertaking is actually doing, governing and planning in relation to sustainability issues.

The risk is that reporting teams turn both disclosures into one polished “about us” narrative. That weakens traceability. Company profile fields need controlled master data; sustainability maturity claims need approved documents and operating evidence. The two streams should meet only after each has passed its own review.

Paragraph 27 requires the undertaking to identify Option A (Basic Module only) or Option B (Basic plus Comprehensive Module) and to make an explicit statement of compliance with the selected option. That statement is not a decorative label: it should match the disclosures actually prepared, including “if applicable” items and any omissions permitted and identified under paragraph 22.

B1 also states whether the report is individual or consolidated. A consolidated report lists the subsidiaries and registered addresses covered. The reporting team should therefore resolve the entity list before collecting metrics. Otherwise, turnover may cover one perimeter, employee data another, and site data a third.

B1 then requires a compact profile: legal form; NACE sector classification code or codes; total assets; turnover; number of employees in headcount or full-time equivalents; country of primary operations and location of significant assets; and geolocation of sites owned, leased or managed. Each field has a natural source system. Re-keying these values into a sustainability document without reconciliation creates avoidable inconsistencies with financial statements, registers, websites and customer portals.

NACE is the EU statistical classification of economic activities. Eurostat states that NACE Rev. 2.1 is used for European statistics from 2025 onwards, with a progressive roll-out across statistical domains. For B1, the reporting team should confirm which code set is relevant to its filing and reporting context, rather than guessing from the company name or copying a code supplied by a customer.

Start with the activities that create turnover or represent significant operations, not only the registered corporate purpose.

Use more than one code where diversified activities genuinely require it, but avoid an uncontrolled list of every minor activity.

Store the classification version, selected code, description, rationale, owner and approval date.

Reassess after acquisitions, disposals, major product changes or legal restructuring.

The undertaking may report the number of employees in headcount or FTE in B1. Whichever basis is chosen, it should be defined and used consistently with the workforce disclosures. Headcount answers how many employees are employed; FTE expresses their working time as full-time positions. A reporting team should not switch between the two because one produces a more attractive number.

The site register should be more than a list of postal addresses. It should identify each location, the entity responsible for it, whether it is owned, leased or managed, its activity, operating status, reporting-boundary status and coordinates. This register becomes the spine for biodiversity, water, pollution, energy and waste disclosures later in the Basic Module.

If the undertaking has obtained a sustainability-related certification or label, B1 requires a brief description, including the issuer, date and rating or score where relevant. The most common reporting error is to present a site-level certificate as a group-wide certification or to omit that the certificate has expired, is pending renewal or covers only a management system rather than the sustainability performance described elsewhere.

Record the certificate or label name, issuer, scheme version, holder, certified site/entity, scope, issue date, expiry date and current status.

Distinguish certification, rating, score, label, membership and self-declaration.

Do not imply that certification assures every datapoint in the sustainability report.

Link the public certificate only when the link is stable and the scope is clear.

Figure 1. B1 establishes the reporting base; B2 states the maturity supported by evidence; C2 adds description under Option B.

Paragraph 29 applies when the undertaking has put in place specific practices, policies or future initiatives for transitioning towards a more sustainable economy. It then states whether it has practices, sustainability policies and whether they are publicly available, future initiatives or forward-looking plans being implemented, and targets used to monitor policy implementation. Paragraph 30 frames these items as actions to reduce negative impacts and enhance positive impacts on people and the environment.

The safest way to prepare B2 is to build an inventory of candidate items and classify each against the defined terms. The Standard’s definitions create meaningful boundaries between the labels.

A company may have a genuine ambition before it has a target. For example, “we intend to reduce waste” communicates direction, but it does not state how much, by when, across which operations or against which starting point. B2 does not force the undertaking to upgrade that ambition into a target. A transparent maturity statement is more useful than a fabricated metric.

Figure 2. Evidence tests distinguish a practice, policy, future initiative and target.

If the undertaking uses Option B, paragraph 31 requires it to complement B2 with C2. C2 briefly describes the practices, policies and future initiatives already identified; states when they cover suppliers or clients; briefly describes targets identified to monitor policies; and permits disclosure of the most senior accountable person or body when one has been determined.

The reporting team treats the operational energy and safety activities as practices. It does not describe the two-page statement as a fully developed management policy until ownership, perimeter, objectives and implementation are clarified. The 2030 statement is presented as an ambition, not a target. The water-meter installation is described as a future initiative only after procurement is approved and installation has begun.

The company also corrects its B1 site register: the second production site was missing because the property database recorded only owned sites. Both leased sites are added with coordinates, and the certification register makes clear that ISO 14001 covers only the first site.

Why it works: the wording distinguishes reporting basis, practices, an initiative under implementation, the absence of approved targets and the limited certification scope. Evidence would include the module checklist, site register, practice records, approved metering plan, policy review record and certificate.

1. Using the website as the source for legal and financial profile data. Public pages may be stale or simplified. Reconcile to legal, finance and HR records.

2. Mixing individual and consolidated fields. A group turnover figure paired with parent-only employees produces an incoherent profile. Lock the boundary first.

3. Treating every ESG activity as a policy. Classify operating initiatives as practices unless the policy evidence test is met.

4. Reporting intentions as initiatives being implemented. Require approval and evidence that actions have started.

5. Calling an ambition a target. Require a measurable outcome and time boundary, plus controlled scope and monitoring.

6. Ignoring certificate scope and expiry. Maintain a certificate register and review status at the reporting date.

7. Geolocating only environmentally “important” sites. Start with the full B1 site population and document any presentation judgement.

No sustainability policy is assumed. B2 states whether specific practices, policies, future initiatives and targets are in place, and a company can report that none has yet been put in place when that is the fact.

Report the NACE code or codes that describe the undertaking's actual revenue-generating or significant activities, using the classification version relevant to the filing and reporting context. More than one code can be used for genuinely diversified activities, with the selected code, description, rationale, owner and approval date retained.

Start with all owned, leased and managed sites within the reporting boundary, including offices; geolocating only environmentally important locations is identified as a mistake. The controlled site register should identify each location, responsible entity, activity, operating status, boundary status and coordinates, with any presentation judgement documented.