CSRD guide for the manufacturing sector

CSRD transforms sustainability reporting from a voluntary narrative exercise into a regulated financial reporting obligation. For manufacturing companies, this means implementing the same data governance, controls, and audit preparation that finance teams apply to financial statements — across energy, emissions, OHS, supply chain, and product stewardship.

Manufacturing companies face a distinctive challenge: their most material ESG data lives in operational systems — SCADA, MES, ERP, waste management — not in sustainability databases. The gap isn't ambition, it's architecture.

This guide covers what CSRD specifically requires from manufacturing companies, which ESRS disclosures carry the highest materiality, how to connect CSRD to existing operational infrastructure, and how to build a system that serves audit without disrupting production.

Implementation Timeline: UK vs EU

The original European timeline classified companies into waves: those already complying with NFRD (public companies with >500 employees) had to report in 2025 (FY2024 data), other large companies in 2026 (FY2025 data), listed SMEs in 2027 (FY2026 data), and non-European companies in 2029 (FY2028 data).

However, after the 2025 reforms ("stop-the-clock" and Omnibus), these dates were delayed by two years: large companies (non-NFRD) will report from FY2027 (report in 2028) and listed SMEs from FY2028 (report in 2029).

Summary Timeline for Spain/EU:

2025: First wave reports begin (NFRD companies with FY2024 data)

2027: Large companies not previously in NFRD start (FY2027 data, report in 2028)

2028: Listed SMEs begin (FY2028 data, report in 2029)

2029: Foreign companies with EU subsidiaries or significant sales start (FY2028 data, report in 2029)

The UK Position: Different Path, Same Direction

In the United Kingdom, CSRD as an EU directive does not apply. However, sustainability disclosure is gaining force through local regulations.

Since April 2022, large UK companies (all with >500 employees or £500M sales) must publicly disclose climate information according to TCFD (Task Force on Climate-related Financial Disclosures) taxonomy.

Additionally, the Government plans to adopt the IFRS Foundation standards (IFRS S1 general and IFRS S2 climate) as UK Sustainability Reporting Standards (UK SRS). These standards are expected to enter force from 2026 (for FY2025 reports).

Key Differences: EU (CSRD) vs UK

Base Regulation
Spain/EU (CSRD): CSRD Directive (EU) with mandatory ESRS standards.
United Kingdom: National laws such as the Companies Act and FCA, plus future "UK SRS" based on IFRS.

Mandatory Subjects
Spain/EU (CSRD): Large EU companies, listed companies including certain SMEs, EU parent subsidiaries, and non EU companies with more than €150M in EU sales.
United Kingdom: Large UK companies subject to TCFD since 2022 and, in the future, listed companies applying IFRS S1 and S2.

Materiality
Spain/EU (CSRD): Double materiality. Requires reporting both the impact on society and the environment and the financial impact on the business.
United Kingdom: Financial or investor focused approach, centred on sustainability risks and opportunities affecting the business, similar to ISSB.

Standards
Spain/EU (CSRD): Detailed and audited ESRS, European Sustainability Reporting Standards.
United Kingdom: IFRS S1 and S2 issued by ISSB, to be adopted as UK SRS under consultation, plus TCFD climate requirements.

Timelines
Spain/EU (CSRD): Phased implementation. Annual reports from 2025 covering FY24 for large companies, with a two year delay for others.
United Kingdom: Climate reporting obligation from FY22, ongoing. IFRS standards expected to become mandatory from 2026, tentative.

Audit
Spain/EU (CSRD): Mandatory external audit of the sustainability report.
United Kingdom: Not yet mandatory, pending SDR and UK SRS regulatory evolution.

Penalties
Spain/EU (CSRD): National fines, potentially up to a percentage of revenue, for CSRD non compliance.
United Kingdom: Fines under the Companies Act, not ESG specific, with FCA supervision.

The main takeaway: whether you're in the EU or UK, rigorous ESG reporting is becoming mandatory. The frameworks differ, but the direction is the same: more transparency, more verification, more accountability.

How Manufacturing Operations Teams Should Implement CSRD

Step 1: Double Materiality with an Operational Lens

Manufacturing double materiality assessments typically identify as material: climate change (energy intensity, Scope 1-3 emissions, transition risk from carbon pricing), pollution (local air, water, soil from production processes), circular economy (waste, packaging, product end-of-life), own workforce (OHS, labor rights, contractor safety), supply chain workers (upstream sourcing risks), and business conduct (anti-corruption, responsible procurement).

Run the assessment with Operations, EHS, Procurement, and Finance co-leading — not just sustainability teams. The financial materiality thresholds must connect to existing risk quantification frameworks.

Step 2: Connect ESRS to Existing Management Systems

The most efficient CSRD implementation in manufacturing maps ESRS requirements directly to existing management systems. ISO 14001 environmental management maps to ESRS E topics. ISO 45001 OHS management maps to ESRS S1. ISO 50001 energy management maps to ESRS E1. Supplier qualification systems map to ESRS S2 and G1. This avoids building parallel systems and leverages existing certifications as evidence.

Step 3: Design ESG Close Aligned with Production Reporting

Align your ESG data close with your existing production reporting cycle — monthly production reports already aggregate energy, waste, and OHS data by facility. Extend this cadence to include ESG KPI sign-off, evidence packaging, and variance review.

CSRD Mistakes That Cost Manufacturing Companies the Most

1. Running Double Materiality Without Finance and Operations

Materiality assessments run only by sustainability teams miss the financial drivers that connect ESRS disclosures to financial statement assumptions. Operations input is essential for impact materiality — the people closest to the processes understand actual environmental and social impacts.

2. Not Aligning CSRD Assumptions with Financial Models

If your ESRS E1 transition plan assumes carbon pricing of €X but your impairment model ignores carbon costs, auditors will flag the inconsistency. Manufacturing companies with energy-intensive processes have the highest exposure to this type of inconsistency.

3. Leaving Supply Chain Data Until Year-End

Supplier ESG data has long lead times. If you start requesting it in Q4, you won't have quality data for annual reporting. Design supplier data collection as a rolling process: define requirements, build them into supplier contracts and portals, and collect quarterly.

4. Not Preparing for Product Carbon Footprint Requests

Manufacturing customers increasingly demand product-level carbon data as part of their own Scope 3 reporting. If your CSRD infrastructure can't produce product-level emission intensity, you'll face both regulatory and commercial pressure simultaneously.

Choosing a CSRD Platform for Manufacturing

Operational System Integration

The manufacturing CSRD platform must integrate with ERP, SCADA, BMS, MES, WMS, and OHS software. Manual data entry for multi-site operations is not viable — and manual re-entry breaks the audit trail that assurance requires.

Multi-Site Consolidation

Manufacturing groups need facility-level data collection with consistent methodologies enforced across sites, rollup to group level, and entity structure matching financial consolidation. The platform should handle 3 to 200+ facilities with the same architecture.

ESRS and Taxonomy Coverage

Verify coverage of all material ESRS topical standards for manufacturing (E1, E2, E5, S1, S2, G1), EU Taxonomy KPI calculation (turnover, CapEx, OpEx) linked to GL data, and XBRL tagging for digital reporting.

Controls Architecture

Look for COSO ICSR-compatible control frameworks: segregation of duties, approval workflows, methodology version control, and evidence storage linked to individual data points. These determine whether your CSRD data survives limited assurance.

Why Dcycle is the Best Solution for Manufacturing CSRD

When choosing an ESG management platform for CSRD compliance, what really matters isn't just functionality – it's the ability to deliver a comprehensive, flexible solution oriented to the real value of ESG data.

We are not auditors or consultants. We are a solution designed for companies that want to measure, manage and communicate their ESG impact simply and efficiently.

Our objective is clear: enable every organisation to collect all their ESG information and distribute it automatically to different use cases, without complications or manual processes.

We centralise environmental, social and governance data from any source – ERP, CRM, spreadsheets, internal systems – and convert it into standardised, traceable metrics ready for official reports. Companies can generate documentation compatible with EINF, CSRD, SBTi, European Taxonomy, ISOs or any other standard in minutes.

Why Manufacturing Companies Choose Us

Designed for Operational Reality: We understand that in manufacturing, sustainability data is operational data. Our platform integrates with the systems and processes you already use.

Automated and Simplified: Everything works in the cloud, with no complex installations or technical development needed. In a few clicks, teams can visualise performance, identify improvement areas and prepare audit-ready reports.

Complete Traceability: Every metric links back to source evidence – invoices, meter readings, production logs, waste transfer notes. This isn't just good practice, it's a requirement for external assurance.

Multi-Framework Support: Generate reports for CSRD, Taxonomy, SBTi, ISO and any other framework from a single dataset. No duplication, no inconsistencies.

Strategic, Not Just Compliance: We firmly believe sustainability should be a strategic lever for competitiveness, not an administrative burden. Our mission is clear: convert ESG data into smarter, more efficient and more profitable business decisions.

With Dcycle, manufacturing companies can control their information, reduce costs, automate processes and guarantee complete traceability of their ESG indicators.

In a market where measuring well is the difference between moving forward and falling behind, our proposition is simple: make sustainability work as a real engine for growth.

Frequently Asked Questions (FAQs)

What should I prioritise when implementing CSRD in manufacturing?

When implementing CSRD, prioritise three core elements: automation, traceability and adaptability.

Automation means collecting data directly from source systems (meters, ERP, production systems) without manual intervention. This reduces errors, saves time and ensures consistency.

Traceability means every number can be traced back to a source document with a clear calculation methodology. This is essential for audit and builds confidence in your data.

Adaptability means your system can accommodate different reporting frameworks (ESRS, Taxonomy, SBTi, ISOs) and evolve as regulations change, without requiring major reconfiguration.

Also ensure your solution is easy to implement, scalable and compatible with your existing systems. This avoids excessive costs and lets you start working quickly while maintaining data reliability from day one.

What are the main challenges for manufacturers under CSRD?

The main challenges are:

Data fragmentation: Sustainability data lives across multiple systems (energy bills, production logs, waste contractors, HR systems, purchasing records). Consolidating it requires careful integration.

Plant-level granularity: Corporate aggregates aren't enough. You need data by facility, process line and product category to support both reporting and operational improvements.

Supply chain complexity: Scope 3 emissions often represent 70-90% of total footprint for manufacturers. Collecting reliable supplier data is difficult, especially from smaller partners.

Resource constraints: Most manufacturers don't have dedicated sustainability teams. CSRD competes for attention with production, quality, delivery and cost objectives.

Audit readiness: Unlike previous sustainability reports, CSRD requires external assurance. Your data and processes must meet audit standards.

How does CSRD differ between EU and UK manufacturers?

EU manufacturers must comply with CSRD and ESRS, which require double materiality, detailed disclosures across environmental, social and governance topics, and external audit.

UK manufacturers follow TCFD for climate (already mandatory for large companies since 2022) and will likely adopt IFRS S1/S2 standards focused on financial materiality and investor decision-usefulness.

The practical difference: CSRD is more comprehensive (covering broader ESG topics) and more prescriptive (specific datapoints and methodologies), while UK standards focus more narrowly on climate and financial impact.

However, the direction is the same: more rigorous ESG disclosure, more verification, more accountability. UK manufacturers with EU customers, EU operations or EU-listed securities will likely need to comply with both frameworks.

Can small manufacturers benefit from CSRD compliance even if not required?

Absolutely. Even if you're below the mandatory thresholds, building a CSRD-aligned ESG system delivers concrete benefits:

Customer requirements: Large manufacturers increasingly require ESG data from suppliers. Having robust data positions you as a preferred partner.

Access to finance: Banks and investors offer better terms to companies with transparent ESG performance and credible improvement plans.

Operational efficiency: Measuring energy, materials, waste and water properly almost always reveals cost-saving opportunities.

Risk management: Understanding your environmental and social risks helps you prepare for regulatory changes, resource scarcity and market shifts.

Talent attraction: Skilled workers increasingly prefer employers with strong sustainability credentials.

The investment in ESG data infrastructure pays dividends whether or not compliance is mandatory.

How long does it take to implement a CSRD-ready system?

For a typical manufacturing company, a realistic timeline is:

90 days for minimum viable system: Scope definition, materiality assessment, top data sources connected, basic controls in place and first draft disclosures with identified gaps.

6-12 months for full implementation: All material datapoints automated, complete controls, evidence management, workflow approvals, audit-ready documentation and first complete CSRD report.

Ongoing improvement: ESG reporting is not a one-time project. Expect continuous refinement of data quality, expansion of Scope 3 coverage, deeper supply chain engagement and more sophisticated analytics.

The key is to start with a solid foundation – clear scope, cross-functional governance, robust data model and the right technology platform. Building on shaky foundations wastes time and creates problems later.

With the right approach and the right tools, CSRD compliance becomes a manageable process that strengthens your business rather than burdening it.