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Definition

High climate impact sector

A high climate impact sector is a sector in Sections A to H or L of the EU's NACE classification; operating in one triggers extra ESRS fossil-energy disclosures and, under current standards, an energy-intensity disclosure.

What is a high climate impact sector?

ESRS applies this category to activities in Sections A to H and Section L of the NACE classification in Regulation (EC) No 1893/2006. It classifies work performed, not an undertaking's emissions.

Why does a high climate impact sector matter to you?

When climate and its energy information are material, current E1-5 paragraph 38 requires five fossil-energy categories in megawatt-hours (MWh). Paragraphs 40 to 43 also require total energy from covered activities divided by their net revenue, plus a reconciliation of that revenue to the financial statements.

The Commission adopted revised ESRS on 3 July 2026, but it was not in force on 20 August. Revised E1-7 paragraph 27 keeps the fossil split and removes the energy-intensity disclosure. Once effective, undertakings subject to ESRS may choose the revised standards for financial years beginning in 2026; the revised standards apply for financial years beginning on or after 1 January 2027.

How do you apply the high climate impact sector test?

List your operating activities, assign NACE codes from the work performed, and keep the descriptions that support each code. Check whether each code falls in Sections A to H or L. Under current E1-5 Application Requirement 33 (AR 33), one qualifying activity makes the paragraph 38 fossil split cover every operation. AR 36 limits both sides of the energy-intensity ratio, MWh and net revenue, to qualifying activities.

What mistakes should you avoid?

  • Copying a customer's industry code instead of classifying your activity.
  • Excluding non-covered operations from the current paragraph 38 fossil split.
  • Mixing company-wide MWh with qualifying-activity revenue for intensity.
  • Using revised E1-7 without recording the version and reporting year.

Are all automotive suppliers in a high climate impact sector?

No. NACE 29.31 and 29.32 motor-vehicle parts manufacturing are in Section C. Sales or engineering work needs a separate code check.

Does this classification put my company in CSRD scope?

No. Check whether the company is subject to its country's CSRD rules and which ESRS version applies. Then assess materiality and apply the sector test.

Example

Hypothetical Polish scenario: Suppose a Polish automotive tier-2 supplier's 2026 operations register lists three activities: electrical component production under NACE 29.31, other motor-vehicle parts production under NACE 29.32, and engineering consultancy under NACE 71.12.

The first two activities sit in Section C, while engineering consultancy under NACE 71.12 sits outside Sections A to H and L. The supplier therefore has two covered activities and one non-covered activity. Because at least one activity qualifies, current E1-5 AR 33 makes the paragraph 38 fossil-energy split cover all three operations.

Where it comes up

Current ESRS fossil-energy split and energy intensity for high climate impact sectorsCommission Delegated Regulation (EU) 2023/2772, ESRS E1-5 paragraphs 38 and 40-43; AR 33 and AR 36Official sourceRevised ESRS fossil-energy split for high climate impact sectorsC(2026) 5010 final, ESRS E1-7 paragraph 27 and the ESRS glossary definition; adopted 3 July 2026Official sourceNACE classification of motor-vehicle parts manufacturingRegulation (EC) No 1893/2006, Annex I, Section C, classes 29.31 and 29.32Official source

Related terms

Energy consumption and mix (ESRS E1-5)

Energy consumption and mix under ESRS E1-5 reports the MWh your own operations consume, split among fossil, nuclear, and renewable sources, with extra fossil detail for specified energy-intensive industry categories, such as manufacturing.

ESRS (European Sustainability Reporting Standards)

ESRS tell companies reporting under the CSRD which sustainability information to disclose and how to document material impacts, financial risks, governance, strategy, policies, actions, metrics, and targets.

Corporate Sustainability Reporting Directive (CSRD)

The Corporate Sustainability Reporting Directive (CSRD) requires qualifying EU undertakings and groups, plus certain non-EU groups, to publish assured sustainability information under European Sustainability Reporting Standards (ESRS).

Sustainability Reporting

Sustainability reporting is the process of publishing evidence-backed information about a company's environmental, social, and governance impacts, risks, opportunities, policies, targets, and performance for a defined period and business boundary.

Sources

  • European Union

    Current E1-5 paragraphs 38 and 40-43, AR 33, AR 36, and the high climate impact sector definition

    2026-08-20

  • European Commission

    Revised E1-7 paragraph 27, application dates, and the revised glossary definition

    2026-08-20

  • European Union

    NACE Sections and classes 29.31, 29.32, and 71.12 used in the example

    2026-08-20

Last verified 2026-08-20

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High climate impact sector Definition | Keslio