CSRD for Manufacturing
Manufacturing companies face some of the most demanding CSRD requirements — significant Scope 1 emissions from process heat, complex Scope 3 supply chains, pollution disclosures under ESRS E2, and worker safety requirements under ESRS S1. Here is a sector-specific guide to CSRD compliance for manufacturers.
Manufacturing companies face some of the most demanding CSRD requirements — significant Scope 1 emissions from process heat, complex Scope 3 supply chains, pollution disclosures under ESRS E2, and worker safety requirements under ESRS S1. Manufacturing companies will find most ESRS topical standards material following their double materiality assessment — more so than service sector companies.
The ESRS materiality landscape for manufacturers
Manufacturing companies will find most ESRS topical standards material following their double materiality assessment — more so than service sector companies. The typical manufacturing CSRD report covers:
ESRS E1 (climate): Material for virtually all manufacturers due to significant Scope 1 (process heat, combustion) and Scope 3 (purchased raw materials, downstream product use). The transition plan (E1-1) and emission targets (E1-4) are central disclosures.
ESRS E2 (pollution): Material for most manufacturers — process emissions to air (NOx, SOx, particulate matter, VOCs), effluent discharge to water, and hazardous waste generation. IED-permitted facilities already have the underlying data.
ESRS E5 (circular economy): Material for manufacturers using significant raw materials — resource inflow tracking, waste management, and product end-of-life recyclability are core E5 disclosures.
ESRS S1 (own workforce): Material — manufacturing has among the highest workplace accident rates of any sector. Health and safety metrics (TRIR, fatalities, lost days) are scrutinised heavily by investors and regulators.
ESRS S2 (value chain workers): Material for manufacturers with global supply chains sourcing from high-risk geographies — particularly relevant for electronics, automotive, garments, and food manufacturers.
ESRS G1 (governance): Material — anti-corruption in procurement and supplier relationships is a standard materiality conclusion for manufacturers with international supply chains.
Scope 1 and 2 — manufacturing-specific data challenges
Manufacturing Scope 1 is typically more complex than office-based businesses — multiple emission sources, varied fuel types, and process-specific emission factors require careful methodology documentation.
Stationary combustion: Gas-fired boilers, furnaces, kilns, ovens, and dryers are the primary Scope 1 source for most manufacturers. Extract annual gas consumption from utility bills. Apply fuel-specific emission factors (DEFRA 2025: natural gas = 0.18316 kg CO2e/kWh). For oil-fired equipment, use diesel or fuel oil factors as appropriate.
Process emissions: Some manufacturing processes emit GHGs through chemical reactions — cement clinker production releases CO2 from limestone decomposition; steel production via basic oxygen furnace releases process CO2; chemical manufacturing may involve oxidation reactions that release CO2 or other GHGs. These process emissions require engineering calculations separate from combustion.
Fugitive emissions: Refrigerant leakage from industrial cooling systems — common in food processing, pharmaceuticals, and chemical manufacturing. Track refrigerant purchases and top-ups. Apply GWP factors from IPCC AR6 for the specific refrigerant type (HFC-134a GWP100 = 1530; HFC-404A GWP100 = 3922).
Scope 2 in manufacturing: Electricity for motors, machinery, lighting, and compressed air is typically the largest Scope 2 source. Sub-metering by production line or process area improves data quality and identifies energy efficiency opportunities. Market-based Scope 2 can be reduced through on-site renewable generation (rooftop solar on factory roof) or renewable energy procurement.
EU Taxonomy for manufacturers — specific activity coverage
Manufacturing is one of the best-covered sectors in the EU Taxonomy for Climate Change Mitigation — several key manufacturing activities have defined Technical Screening Criteria.
Steel manufacturing: TSC requires GHG intensity below 0.325 tCO2e/t steel for EAF (electric arc furnace) route. Most scrap-based EAF producers are close to or below this threshold. Blast furnace primary steel producers face a much harder pathway — CapEx plans for DRI (direct reduced iron) + green hydrogen are the primary Taxonomy alignment route.
Cement manufacturing: TSC based on clinker-to-cement ratio and thermal energy intensity. Supplementary cementitious materials (fly ash, slag, calcined clays) reduce the clinker ratio — a well-established decarbonisation pathway that improves Taxonomy alignment.
Chemical manufacturing: Selected chemicals have TSC — particularly low-carbon hydrogen, ammonia, and specific basic chemicals. Most speciality chemical manufacturing is not yet covered by TSC.
Battery manufacturing: TSC based on carbon footprint of battery cell production per kWh. Increasingly relevant as European battery gigafactories come online.
For manufacturers in unlisted activities: disclose zero Taxonomy-eligible revenue from your core manufacturing activity, but identify eligible CapEx — on-site renewable energy installation, building renovation to NZEB standard, and EV fleet acquisition all qualify as taxonomy-aligned CapEx regardless of whether the core manufacturing activity is listed.
Frequently asked questions
We have 50 production sites across 15 countries — how do we manage CSRD data collection at scale?
Centralise data collection through a standardised template pushed to each site annually. Identify a sustainability data owner at each site. Use an ESG data platform to aggregate site-level data — manual consolidation from spreadsheets is error-prone at this scale. Conduct a data quality review of each site's submissions before consolidation. Focus assurance preparation on your highest-emission sites.
How do we handle Scope 3 Category 1 for complex multi-tier bill of materials?
Start with a spend-based Category 1 estimate using procurement expenditure by commodity category — this gives a rough total (±50%) and identifies the highest-emission spend categories. Then focus activity-based or supplier-specific calculation on the top 5–10 commodity categories by emission, which typically represent 80%+ of Category 1 total. Full bill-of-materials lifecycle assessment is a multi-year ambition, not a first-year requirement.
Our process uses SVHCs that are difficult to substitute — how do we handle E2-5 disclosure?
Disclose the SVHC use, the quantity, the technical reason substitution is not currently feasible, and the timeline for substitution where a pathway exists. ESRS E2-5 does not require immediate elimination of SVHCs — it requires transparency about use and a credible substitution plan. If no viable substitute exists, explain the research and development investment in alternative materials.