CSRD in Manufacturing: ESRS, Double Materiality & Sustainability Reporting.

The NFRD (Directive 2014/95) only obliged around 11,000 large EU public-interest entities, with generic content and no mandatory external verification. The CSRD (Directive 2022/2464) expands the number of obliged companies to over 50,000, introduces detailed and standardised ESRS reporting standards, requires the double materiality principle, and makes external assurance of the sustainability report mandatory, starting at a limited level.

The European Sustainability Reporting Standards (ESRS) are the technical standards that implement the CSRD. There are 12 standards: 2 cross-cutting (ESRS 1, general principles, and ESRS 2, mandatory general disclosures), 5 environmental (climate change, pollution, water and marine resources, biodiversity, circular economy), 4 social (own workforce, workers in the value chain, affected communities, consumers) and 1 governance standard (business conduct). The Commission is also developing sector-specific standards, with manufacturing among those prioritised given its emissions and environmental impact.

Double materiality requires analysing two directions simultaneously: financial materiality (how sustainability matters affect the company's value and results) and impact materiality (how the company's activities affect people and the environment, regardless of any direct financial effect). An ESRS topic is material — and therefore must be reported — if it is relevant under either dimension. This assessment determines which thematic standards apply to each specific company.

Yes, the European Commission is developing sector-specific ESRS standards that complement the cross-cutting and thematic ones with requirements tailored to each industry. For manufacturing, these standards go deeper into process emissions, industrial energy efficiency, hazardous waste management, and plant health and safety, with quantitative indicators comparable across companies in the same sector.

Unlike previous voluntary ESG reports, the CSRD makes external assurance by an independent auditor mandatory. The initial phase requires limited assurance, similar to a review; the Commission plans to move toward reasonable assurance — equivalent to that required for annual financial statements — in later phases of the rollout.

Companies subject to the CSRD must also report alignment indicators under the Taxonomy Regulation (2020/852): what percentage of their turnover, capital expenditure (capex) and operating expenditure (opex) comes from economically sustainable activities under the technical screening criteria. Both regulations share the goal of directing capital toward sustainable activities and use consistent definitions.

Each Member State sets its own penalty regime through the national transposition of the Directive. In Spain, the framework runs through audit legislation, with financial penalties that can be significant depending on severity, plus the risk that the auditor issues a qualified opinion on the sustainability report — which carries direct reputational impact with customers and lenders.

This page provides the general overview of the CSRD for the industrial sector: standards, double materiality, and general timeline. For a precise determination of which phase applies to your company based on employees, turnover and balance sheet, see our detailed CSRD applicability FAQ, which breaks down the 2024-2028 timeline by company size.