🧾 Introduction

ESRS G1 Business Conduct is the dedicated governance standard for reporting on ethics, integrity and responsible behaviour under the European Sustainability Reporting Standards.

Its objective is to enable users of sustainability statements to understand the strategy and approach, processes and procedures, and performance of an undertaking in respect of business conduct.

Whenever business‑conduct‑related impacts, risks or opportunities are material, ESRS G1 business conduct disclosures become mandatory.

The standard applies across sectors and is relevant for own operations and, where applicable, the value chain.

⚙️ Scope and Sustainability Matters of ESRS G1

ESRS G1 covers one overarching topic—business conduct—structured into several sub‑topics:

• Corporate culture
• Protection of whistle‑blowers
• Animal welfare
• Political engagement and lobbying
• Management of relationships with suppliers, including payment practices
• Corruption and bribery, including prevention, detection, training and incidents

The disclosures combine narrative explanations and quantitative indicators. Some are mandatory where the topic is material; others depend on materiality assessments or are voluntary to enhance transparency.

🏛️ Objective and Interaction with Other ESRS and Frameworks

The standard is designed to show how ethical behaviour is embedded in corporate governance and day‑to‑day practices. ESRS G1 is applied together with:

• ESRS 1 – General requirements, which sets the overall principles for sustainability reporting.
• ESRS 2 – General disclosures, which organises information into governance, strategy, impact‑risk‑opportunity management, and metrics and targets.

Key cross‑references include:

• Governance disclosures on the role and composition of the Administrative, Management and Supervisory Bodies (ESRS 2 GOV‑1).
• Strategy and business model disclosures (ESRS 2 SBM‑2 and SBM‑3).
• Processes for identifying and assessing material impacts, risks and opportunities (ESRS 2 IRO‑1).
• Minimum disclosure requirements on policies, actions, resources, metrics and targets (ESRS 2 MDR‑P, MDR‑A, MDR‑M, MDR‑T).

ESRS G1 Business Conduct also aligns with established instruments such as the United Nations Convention against Corruption and the Whistleblower Directive, reinforcing consistency between statutory compliance and sustainability reporting.

🧾 Governance: Role and Expertise of the Governing Bodies

🏛️ Role of the Administrative, Management and Supervisory Bodies

In connection with ESRS 2 GOV‑1, undertakings must describe how the highest governance bodies oversee business conduct. This includes:

• How responsibilities for ethics, business conduct and anti‑corruption are allocated within boards or committees.
• How these bodies receive information on business‑conduct‑related impacts, risks and opportunities and how often they review it.

Where material, companies also explain the expertise of members of the Administrative, Management and Supervisory Bodies in business conduct matters, such as prior experience in compliance, ethics or risk management.

These disclosures demonstrate that business conduct is treated as a central governance issue, not only as an operational matter.

🛡️ Managing Impacts, Risks and Opportunities

🧾 Business conduct policies and corporate culture (G1‑1)

Undertakings must explain:

• Key business conduct policies, including codes of conduct and specific rules on conflicts of interest, gifts, hospitality and fair dealing.
• How these policies support the identification, assessment, management and remediation of material impacts, risks and opportunities linked to business conduct.
• The approach to promoting an ethical corporate culture, for example through leadership tone, internal communication and accountability mechanisms.

🤝 Relationships with suppliers (G1‑2) and payment practices (G1‑6)

On supplier relationships, ESRS G1 business conduct requires information on:

• How procurement processes are managed to ensure fair and responsible behaviour.
• Expectations that suppliers act consistently with the undertaking’s business conduct policies.

For payment practices, quantitative disclosures cover:

• Standard payment terms expressed in days.
• Average number of days taken to pay invoices.
• Main categories of suppliers and the share of payments made within agreed terms.
• Number of legal proceedings currently outstanding for late payments.

These disclosures are particularly important for understanding impacts on small and medium‑sized enterprise suppliers.

🛡️ Anti‑Corruption and Anti‑Bribery System (ESRS G1‑3)

⚙️ System design and procedures

ESRS G1‑3 sets detailed expectations for the anti‑corruption and anti‑bribery system, which must prevent, detect, investigate and respond to allegations or incidents.

Where material, undertakings disclose:

• Procedures for preventing, detecting and handling suspicions or incidents of corruption and bribery.
• Whether investigations are performed by individuals or committees that are independent from the management chain involved in the case.
• How outcomes of investigations are escalated to the Administrative, Management and Supervisory Bodies.
• Where no procedures exist, a statement to that effect and plans to establish them.
• How policies and procedures are communicated so that workers and, where relevant, suppliers and other partners can access and understand them.

Undertakings may also describe risk assessments, internal programmes, internal controls and communication activities related to corruption prevention.

🎓 Training and awareness

Training is a core pillar of ESRS G1‑3. Disclosures typically include:

• The nature, scope and depth of anti‑corruption and anti‑bribery training programmes.
• The proportion of functions or positions exposed to higher corruption risk that are covered by training.
• The extent to which members of the Administrative, Management and Supervisory Bodies receive specific training.

Companies can provide further analysis, for example by region or workforce category, where training programmes differ significantly.

📊 Metrics and Targets under ESRS G1 Business Conduct

🎯 Targets relating to business conduct

In line with ESRS 2 MDR‑T, undertakings must disclose, where applicable:

• Performance against each business‑conduct‑related target, including explanations of trends or significant changes.
• How each target is monitored and reviewed and whether progress is consistent with initial expectations.

🛡️ Incidents of corruption or bribery (G1‑4)

Incidents must be reported when corruption or bribery is a material issue. Materiality‑dependent metrics include:

• Number of convictions for violations of anti‑corruption or anti‑bribery laws.
• Total amount of fines imposed for those violations.
• Actions taken to address breaches of anti‑corruption procedures and standards.

Additional, mainly voluntary, disclosures can provide deeper insight:

• Number and nature of confirmed incidents of corruption or bribery.
• Incidents involving own workers that resulted in dismissal or disciplinary sanctions.
• Incidents where contracts with business partners were terminated or not renewed due to corruption‑related violations.
• Public legal cases involving the undertaking or its workers and their outcomes, including cases initiated in earlier years but concluded in the current period.

Incidents involving value‑chain actors are included only when the undertaking or its employees are directly involved.

🗳️ Political influence and lobbying activities (G1‑5)

For political engagement, ESRS G1 business conduct requires transparency on:

• Whether any metrics on political contributions or lobbying are validated by an external body and, if so, which one.
• Monetary value of direct and indirect financial political contributions.
• Monetary value of direct and indirect in‑kind political contributions.
• Main geographical areas and categories of recipients or beneficiaries, reported as breakdowns.

Undertakings may additionally disclose total expenses for lobbying‑related contributions and membership fees for lobbying associations.

✅ Implementing ESRS G1 Business Conduct in Practice

To comply with ESRS G1 Business Conduct, undertakings should consider the following steps:

• Gap analysis
• Compare existing ethics, anti‑corruption, whistle‑blowing, political engagement and supplier policies with ESRS G1 disclosure requirements.

• Governance alignment
• Define clear responsibilities for business conduct within governing bodies and senior management.
• Ensure members of the Administrative, Management and Supervisory Bodies have or acquire relevant expertise.

• Process integration
• Integrate business‑conduct‑related impacts, risks and opportunities into enterprise‑wide risk management and into the ESRS 2 IRO‑1 assessment process.

• Data systems
• Establish robust systems to capture data on incidents, training coverage, political contributions, lobbying expenses and payment performance.

• Consistency and traceability
• Align narrative disclosures, metrics and targets so that reported information is coherent and traceable to underlying policies and controls.

🤝 How ComplyMarket Supports ESRS G1 Business Conduct Reporting

ComplyMarket helps organisations implement ESRS G1 efficiently by:

• Mapping existing ethics, compliance and anti‑corruption frameworks against ESRS G1 to identify gaps.
• Structuring and documenting business conduct policies, investigations and training for ESRS/CSRD reporting.
• Designing data collection for corruption incidents, political contributions and payment practices, aligned with ESRS 2 metrics and targets.
• Advising governing bodies and sustainability teams on how to evidence oversight and expertise in business conduct.

This support enables undertakings to produce reliable ESRS G1 disclosures, reinforce internal controls and meet investor and regulatory expectations on ethical business conduct.