Navigating ESRS, VSME, and European market-based accounting
The Corporate Sustainability Reporting Directive (CSRD) transforms sustainability reporting into mandatory financial-grade accounting. Learn how to meet your European Sustainability Reporting Standards (ESRS) for Scope 2, navigate supply chain reporting (VSME), and automate the Guarantees of Origin (GO) operations that make your claims audit-proof.
THE DIRECTIVE
THE STANDARDS
THE EXECUTION
How ESRS approaches Scope 2 emissions
Under CSRD, companies are required to report their environmental impact using the European
Sustainability Reporting Standards (ESRS). Specifically, ESRS E1 (Climate Change) mandates
that companies report their gross Scope 2 GHG emissions.
ESRS relies entirely on the foundational accounting rules set by the
GHG Protocol Scope 2 Guidance
. This means mandatory dual-reporting for your purchased electricity.
Location-Based
Market-Based
The Residual Mix Penalty
If you do not procure renewable certificates, you cannot simply use the average grid mix for your market-based reporting.
You must calculate your footprint using the European “Residual Mix” — the grid average after all the clean energy claimed by other companies has been removed. This significantly inflates your reported carbon footprint.
The EU Standard: RED and Guarantees of Origin (GOs)
Official Issuance
Tracked and Cancelled
Exclusive Ownership
Market Boundaries
Vintage Matching
Local Compliance
The documentation burden
Unlike previous voluntary frameworks, CSRD requires mandatory independent assurance (statutory audits).
Because the market-based method relies entirely on contractual instruments, the burden of proof falls entirely on you. During your financial and sustainability audits, assurance providers will demand detailed GO cancellation statements for every megawatt-hour claimed, across every European operating region. They expect to see the exact origin of this energy down to the specific power generation device.
The Scope 3 Challenge and VSME
CSRD’s impact cascades down the supply chain. Large corporates must report their Scope 3 emissions, which means they need their suppliers to report their Scope 2 emissions.
To standardize this, the EU introduced VSME (Voluntary SME standard). This framework helps non-listed small and medium enterprises report their climate data to larger supply-chain partners. However, tracking, verifying, and collecting device-level GO cancellation creates significant overhead for your down-stream supply chain of SME suppliers.
Soldera automates your CSRD compliance
Device-level, audit-ready statements
Every GO managed through Soldera is automatically cancelled in the correct national registry and supplied with the actual, official registry cancellation statement. Track origin down to the specific generation device for your ESRS disclosures.
Automatic quality criteria enforcement
Our system matches your consumption with GOs that meet all Renewable Energy Directive, market boundary, and local requirements. No manual checking, no spreadsheet errors.
Double-counting prevention
Soldera interfaces directly with primary government registries, ensuring absolute exclusive ownership and preventing double-counting across the EU.
Scope 3 and consolidated export
Extend the platform to your supply chain so SME suppliers can procure, cancel, and report compliant GO data directly back to you, seamlessly powering your CSRD Scope 3 reporting.
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