A Kraków-based manufacturing group with operations across three EU member states received a notification in late 2024: its parent company's auditors would require full European Sustainability Reporting Standards (ESRS) compliance for the Polish subsidiary's first reporting period. The legal and finance teams had six months to build a reporting framework from scratch. No internal ESG function existed. The deadline was fixed.

ESRS implementation for Polish reporting entities requires a structured sequence: materiality assessment, gap analysis, data architecture, and auditor-ready disclosure. Under the ustawa o rachunkowości (Accounting Act) as amended to transpose the Corporate Sustainability Reporting Directive (CSRD), large Polish entities and listed SMEs face mandatory sustainability reporting obligations phased in from 2025. The first reporting period for large public-interest entities covers financial year 2024, with subsequent waves extending to large non-listed companies by 2026.

This case study follows that Kraków manufacturer through four stages: establishing scope, running the double materiality assessment, building data systems, and delivering the first ESRS-compliant report. Each stage produced transferable lessons for other Polish entities entering the same process.

What was the starting position for the Polish entity?

The subsidiary operated in the Małopolska region, employing around 800 people across two production sites. Its parent group reported under German GAAP and had already mapped ESRS requirements at group level. The Polish entity, however, had no standalone sustainability data, no ESG policy documentation, and no designated reporting officer. The gap was substantial.

The first task was scoping. Under CSRD, the entity qualified as a large undertaking – exceeding the balance sheet threshold of EUR 20m and the net turnover threshold of EUR 40m simultaneously. That triggered mandatory ESRS reporting. The National Court Register (KRS) filing confirmed the entity's legal form as a spółka z ograniczoną odpowiedzialnością (limited liability company, sp. z o.o.), which determined the supervisory structure relevant to governance disclosures.

Three institutional touchpoints were identified early. The Polish Financial Supervision Authority (KNF) had issued guidance on sustainability disclosures for financial-sector entities – useful by analogy. The Polish Accounting Standards Committee had published interpretive notes on CSRD transposition. The Ministry of Finance maintained the official register of auditors authorised to conduct limited assurance engagements on sustainability reports. Mapping these bodies in week one saved significant time later.

The legal team drafted a project charter covering timeline, budget, and responsibility matrix. The compliance function (newly created for this project) was given a direct reporting line to the management board. That governance decision proved critical: ESRS requires board-level approval of the sustainability statement.

How did the double materiality assessment work in practice?

Double materiality sits at the heart of ESRS. It requires the entity to assess both impact materiality (how the company affects people and the environment) and financial materiality (how sustainability matters affect the company's finances). Neither assessment alone is sufficient. Both must be documented and defensible to auditors.

The team ran a 12-week process. In the first four weeks, the compliance lawyer coordinated stakeholder mapping – identifying 23 stakeholder groups ranging from direct employees to upstream raw-material suppliers in three countries. Each group was interviewed or surveyed. The responses fed a materiality matrix scored on probability and magnitude.

We supported a comparable double materiality exercise for a logistics group in the Mazowieckie region (autumn 2025), ultimately reducing the number of material topics from 18 to 9 – cutting first-year reporting scope by half and saving an estimated PLN 400,000 in data-collection costs.

For the Kraków manufacturer, climate change (ESRS E1) and own workforce (ESRS S1) emerged as the two highest-priority topics. Supply chain labour standards (ESRS S2) and business conduct (ESRS G1) followed. Topics such as biodiversity (ESRS E4) were assessed as not material for this entity and excluded – a defensible decision that must be documented with reasoning. The exclusion of a topic does not eliminate the obligation to explain why it was excluded. Auditors will test that reasoning.

One frequent mistake: treating double materiality as a one-time exercise. ESRS requires annual review. Building the assessment into the compliance calendar – not just the first reporting cycle – avoids rework.

What data architecture and governance changes were required?

ESRS is data-intensive. ESRS E1 alone requires Scope 1, 2, and 3 greenhouse gas emissions data. ESRS S1 requires headcount breakdowns by gender, contract type, and location. ESRS G1 requires documentation of anti-corruption training completion rates and whistleblower compliance mechanisms. For an entity with no prior ESG data infrastructure, the collection challenge is significant.

The project identified three data gaps within the first month. Energy consumption was tracked at site level but not disaggregated by source. Workforce data sat across two HR systems that did not communicate. Supplier contracts contained no sustainability clauses, making supply-chain data collection entirely manual.

Remediation took ten weeks. The IT function integrated the two HR systems into a single reporting database. Energy metering was upgraded at both production sites – a capital expenditure of approximately PLN 180,000. A supplier questionnaire was designed and distributed to the 40 highest-spend vendors, covering environmental and labour standards aligned to ESRS S2 and the AML and anti-corruption requirements of ESRS G1.

Governance changes accompanied the data work. A sustainability committee was established at board level, meeting quarterly. Internal audit was given a new mandate covering ESG data integrity. The whistleblower channel – already required under the ustawa o ochronie sygnalistów (Whistleblower Protection Act) – was extended to cover sustainability-related reports. That extension satisfied both the standalone whistleblower compliance obligation and the ESRS G1 disclosure requirement simultaneously.

For a practical reference on designing compliance programmes that integrate ESG, AML, and whistleblower obligations within a single framework, see our guide on compliance programme design for United States subsidiaries in Poland.

What lessons does this matter produce for other Polish entities?

The Kraków manufacturer delivered its first ESRS-compliant sustainability statement on time. Limited assurance was obtained from a registered auditor within the 90-day window following the financial year-end. Three lessons stand out for entities at an earlier stage.

First, start with governance, not data. The single most important early decision was creating a board-level reporting line for the compliance function. Entities that treat ESRS as a finance-department project – without board ownership – consistently underestimate the governance disclosure requirements of ESRS G1 and face last-minute escalations.

Second, use the materiality assessment to limit scope, not expand it. Polish entities with limited ESG history often over-report in year one, fearing auditor challenge. The correct approach is the opposite: a well-documented materiality assessment that excludes non-material topics is more defensible than a report that covers everything superficially. Auditors assess process quality, not topic count.

Third, integrate rather than duplicate. The entity's whistleblower channel, AML procedures, and ESG reporting all draw on overlapping data and governance structures. Building them as one integrated compliance system – rather than three parallel workstreams – reduced total implementation cost by an estimated 30 percent. Our analysis of environmental due diligence obligations, which frequently intersects with ESRS E1 and E2 disclosures, is set out in detail in our guide on environmental due diligence for Polish real estate.

For foreign-owned Polish subsidiaries, a fourth consideration applies. Parent-group reporting timelines often run ahead of local statutory deadlines. Entities in that position face a dual obligation: satisfying the group consolidation timetable (often 60 days after year-end) and meeting the Polish statutory filing deadline. Aligning both calendars in month one avoids conflicts. Our separate case study on compliance programme design for Ukraine subsidiaries in Poland addresses analogous timing challenges for cross-border structures.

The lost opportunity risk is real. Entities that delay ESRS implementation forfeit the ability to shape their first materiality assessment calmly. A rushed assessment produces a wider material topic list, higher data-collection costs, and a sustainability statement that is harder to defend under limited assurance. The window for structured preparation closes approximately nine months before the reporting period ends.

Frequently asked questions

Q: Which Polish entities are required to report under ESRS, and from when?

A: Under the Accounting Act as amended for CSRD transposition, large public-interest entities with more than 500 employees were required to report from financial year 2024. Large non-listed companies exceeding two of three thresholds – EUR 20m balance sheet, EUR 40m turnover, 250 employees – must report from financial year 2025. Listed SMEs follow from 2026, with an opt-out available until 2028. The KRS filing and annual financial statements are the starting point for determining which wave applies.

Q: How long does a first ESRS implementation typically take for a mid-sized Polish manufacturer?

A: A realistic timeline for a first full implementation – covering governance setup, double materiality assessment, data architecture, and auditor-ready disclosure – is nine to twelve months. Entities that begin the process fewer than six months before year-end typically face scope reductions or assurance qualifications. The compliance lawyer's role is heaviest in months one through four, covering governance documentation, stakeholder mapping, and policy drafting.

Q: Is it a misconception that ESRS only applies to listed companies in Poland?

A: Yes, that is a common misconception. CSRD and its Polish transposition extend mandatory ESRS reporting to large non-listed companies meeting the financial thresholds described above. Listing status is relevant only to the timing of the obligation – listed entities entered the first wave – not to the question of whether the obligation applies at all. Many Polish family-owned manufacturers and private-equity portfolio companies fall within scope and are unaware of it until an audit or financing process surfaces the gap.

KORDECKI & Partners is a law firm based in Warsaw and Krakow, advising business clients across 30 jurisdictions. Our team combines expertise in Polish and international law with a practical approach to ESG compliance, CSRD implementation, whistleblower programme design, and sustainability reporting assurance. We work with Polish entrepreneurs, foreign investors, and in-house legal teams. To discuss your situation, contact info@kordeckipartners.com.

Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. KORDECKI & Partners assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@kordeckipartners.com.