Disclosure Requirement S1-4 – Taking action on material impacts on own workforce, and approaches to managing material risks and pursuing material opportunities related to own workforce, and effectiveness of those actions

35. The undertaking shall disclose how it takes action to address material negative and positive impacts, and to manage material risks and pursue material opportunities related to its own workforce, and the effectiveness of those actions.

36. The objective of this Disclosure Requirement is twofold. Firstly, it is to enable an understanding of any actions and initiatives through which the undertaking seeks to:

    • (a) to prevent, mitigate and remediate negative material impacts on its own workforce; and/or

    • (b) to achieve positive material impacts for its own workforce.

Secondly, it is to enable an understanding of the ways in which the undertaking is addressing the material risks and pursuing the material opportunities related to its own workforce.

37. The undertaking shall provide a summarised description of the action plans and resources to manage its material impacts, risks, and opportunities related to its own workforce in accordance with ESRS 2 MDR-A Actions and resources in relation to material sustainability matters.

38. In relation to the material impacts related to its own workforce, the undertaking shall describe:

    • (a) actions taken, planned or underway to prevent or mitigate material negative impacts on its own workforce;

    • (b) whether and how it has taken action to provide or enable remedy in relation to an actual material impact;

    • (c) any additional actions or initiatives it has in place with the primary purpose of delivering positive impacts for its own workforce; and

    • (d) how it tracks and assesses the effectiveness of these actions and initiatives in delivering outcomes for its own workforce.

39. In relation to paragraph 36, the undertaking shall describe the processes through which it identifies what action is needed and appropriate in response to a particular actual or potential negative impact on its own workforce.

40. In relation to material risks and opportunities, the undertaking shall describe:

    • (a) what action is planned or underway to mitigate material risks for the undertaking arising from its impacts and dependencies on its own workforce and how it tracks effectiveness in practice; and

    • (b) what action is planned or underway to pursue material opportunities for the undertaking in relation to its own workforce.

41. The undertaking shall disclose whether and how it ensures that its own practices do not cause or contribute to material negative impacts on own workforce, including, where relevant, its practices in relation to procurement, sales and data use. This may include disclosing what approach is taken when tensions arise between the prevention or mitigation of material negative impacts and other business pressures.

42. When disclosing the information required under paragraph 40, the undertaking shall consider ESRS 2 MDR-T Tracking effectiveness of policies and actions through targets if it evaluates the effectiveness of an action by setting a target.

43. The undertaking shall disclose what resources are allocated to the management of its material impacts, with information that allows users to gain an understanding of how the material impacts are managed.