CSRD and ESRS: What Manufacturers Must Report

CSRD is usually introduced as a reporting obligation, which understates what changes. Sustainability information moves from a voluntary report written by a communications function to audited disclosure sitting alongside financial statements.

For a manufacturer the consequence is specific: several required datapoints cannot be produced from corporate systems, and the evidence standard for the rest rises because an assurance provider now examines it.

Who is in scope, and when?

Scope phases in by company size and listing status. Large undertakings meeting size thresholds, listed companies including listed small and medium enterprises on a later timetable, and certain non-EU undertakings with substantial EU turnover are all captured.

The scoping detail has been subject to amendment, so the reliable approach is to confirm your first reporting year against the current transposition in your member state rather than against commentary. What is stable is the direction and the evidence standard.

What are the ESRS?

E1 and E5 are where manufacturers spend most of the effort. E1 requires greenhouse gas disclosure including Scope 3, and E5 requires resource inflows and outflows, which is a material accounting exercise rather than a financial one.

Why Scope 3 is the hard part of E1

Scope 1 and 2 are measurable from your own energy consumption. Scope 3 category 1, purchased goods and services, is typically the largest share of a manufacturer’s footprint and depends entirely on supplier data.

Spend-based estimation is permitted and increasingly hard to defend under assurance, because it does not respond to actual supplier performance. The direction of travel is toward supplier-specific figures for material categories, which is the same evidence a passport carries.

What ESRS E5 actually asks for

• Resource inflows, including the mass of materials used and the share that is secondary.
• Resource outflows, including products, materials and waste by category.
• Information on durability, reparability and recyclability of products placed on the market.
• Waste diverted from and directed to disposal, by treatment route.
• Policies, actions and targets relating to circular economy.

The first two are a material flow analysis in reporting clothing. Organisations that have run one find this straightforward; those that have not are usually building it under deadline — the method is set out in material flow analysis for manufacturers.

What double materiality means in practice

You assess both how sustainability matters affect the company financially and how the company affects people and the environment. A topic material under either lens must be reported.

This is broader than financial materiality alone and is the provision that pulls product impacts into scope. A manufacturer whose products are durable and recyclable is reporting an outward impact regardless of whether it is financially material.

Assurance changes the evidence standard

Reported information is subject to assurance, beginning at limited assurance with an intention to move toward reasonable assurance over time. That is the single change with the largest operational consequence.

A figure that was previously acceptable because nobody examined it now needs a documented derivation and a source. Supplier values arriving by email without attribution do not survive that examination, which is why signed evidence matters more than it did.

The value chain problem

ESRS requires information from the value chain, and most of it is held by parties with no reporting obligation of their own. Transitional provisions allow explanation where value chain data cannot be obtained, which is relief rather than exemption.

Using that relief requires explaining what you tried. An organisation that made no attempt is in a weaker position than one that requested data, documented the response and disclosed the gap.

How this connects to the passport

Both ask the same suppliers for the same evidence on different timetables and in different formats. Running them as separate programmes means asking twice, and supplier response rates fall sharply on a second request for information already provided.

Holding the evidence once against the product record, with its asserting party, lets CSRD reporting aggregate upward and passport fields resolve downward. That is the practical case, and it depends on collecting at product granularity from the start.

What does the reporting actually look like?

A sustainability statement inside the management report, tagged in a machine-readable format, following a prescribed structure. It is not a standalone brochure and it cannot be written in the register a voluntary report used.

The digital tagging requirement matters more than it sounds. Tagged disclosure is machine-comparable across companies, which means an analyst or a regulator can compare your durability disclosure directly with a competitor’s without reading either document.

That comparability is the point of the exercise, and it changes what a poorly evidenced figure costs. Under voluntary reporting a weak number sat in a PDF nobody aggregated; under CSRD it sits in a dataset that will be aggregated by parties you do not control.

Where manufacturers usually underestimate the work

• Scope 3 category 1, which needs supplier data at a granularity most systems do not hold.
• E5 resource outflows, which require waste data by treatment route rather than by contractor.
• Product durability and reparability disclosures, which sit in engineering rather than finance.
• The value chain evidence trail, which has to survive an assurance provider rather than an internal review.
• Consolidating subsidiaries with different systems onto one reporting basis.

The third is the one that surprises people most. Durability and reparability are engineering properties reported through a financial process, and neither function is used to supplying the other with audit-grade evidence on a fixed calendar.

What about companies not yet in scope?

They are reached indirectly and sooner than the phase-in suggests. A supplier to an in-scope manufacturer receives value chain data requests immediately, because the customer cannot report without them.

This is the mechanism by which CSRD reaches far beyond its formal scope, and it is the same mechanism the passport uses. A smaller manufacturer will be asked for product-level environmental data by customers long before any instrument obliges them directly, which makes preparation a commercial matter rather than a compliance one.

Who should own it internally?

Finance usually ends up owning the report because it sits in the management report and faces assurance, while sustainability owns the content and engineering and procurement own most of the underlying data. That split is workable and only if someone owns the seams.

The seams are where first-year engagements fail: a durability figure engineering considers approximate, presented in a document finance signs, evidenced by a supplier record procurement never asked for. None of the three functions is wrong, and nobody was accountable for the join.

What to do first

1. Confirm your first reporting year against the transposition in your member state.
2. Run a double materiality assessment, since it determines what you must report at all.
3. Map ESRS E1 and E5 datapoints against data you already hold, and mark the gaps.
4. Consolidate supplier requests so CSRD and passport evidence arrive in one exercise.
5. Fix attribution: figures need a source and a date before an assurance provider asks.

The fifth is the least visible and the most likely to cause a problem late. Data that exists but cannot be traced to a source is the standard finding in a first assurance engagement, and correcting it retrospectively means going back to suppliers a second time.