Revealed: Critical Gaps Found in Meeting CSRD Requirements

Research by Assent, a leading solutions provider for supply chain sustainability management, has evaluated the readiness of manufacturers for new ESG reporting requirements under the EU’s Corporate Sustainability Reporting Directive (CSRD). 

The CSRD goes into effect in April 2025 and requires companies to report on the impact of corporate activities on the environment and society under commitments made as part of the European Green Deal.  

It places a more stringent focus on supply chain engagement and transparency, impacting manufacturers with complex global supply chains. Specifically, companies must disclose information about environmental and social risk and impact including carbon emissions, human rights practices, biodiversity impact, and labour conditions. 

For its CSRD Readiness Report Assent engaged public and private manufacturing businesses across sectors within the EU including industrial equipment, electronics, medical devices, automotives, and retail. It found that many industries have “critical gaps in meeting the CSRD requirements”. 

Lifting the lid on CSRD compliance

Assent outlines several key challenges facing manufacturers. These include the complexity of gathering, verifying, and reporting extensive data from across the entire supply chain. In particular, it says, collating accurate data from a broad supplier ecosystem will be a 'seriously challenging task'. 

In addition, it points to the difficulty of standardising compliance across different global jurisdictions that have varying data collection and governance landscapes. 

To understand where companies are falling short, Assent collected publicly available sustainability reports from more than 150 manufacturers, conducting in-depth evaluation using criteria aligned with CSRD requirements. The criteria evaluates a business’s ability to report on common material topics relevant to the manufacturing industry. 

CSRD readiness in numbers 

• 99% of companies have integrated ESG into their business strategies, signalling a clear alignment with long-term sustainability goals. 
• 24% of companies assessed provided biodiversity disclosures that meet the CSRD requirements, with most companies lacking structured targets or disclosures related to biodiversity.
• 49% of companies set targets for water use and marine conservation, highlighting the need for better resource management to address water scarcity and marine health.
• 56% of companies disclosed Scope 3 emissions targets, meaning approximately half lacked a comprehensive approach to supply chain emissions reduction, which is crucial for full CSRD alignment.
• 57% of companies assessed their financial risks related to material ESG topics, which is required to meet investor and regulatory expectations.
• 58% of companies accounted for their community impacts and set related targets, underscoring the need for greater community engagement to reduce the risks of reputational damage.

Based on its evaluation, Assent recognised 15 companies that have emerged as leaders in CSRD readiness. 

They are: Brembo, Delta Electronics, Dow, Evonik Industries, Heidelberg, Hutchinson, Kongsberg, NXP, Perkins, Rockwool International, Sames, Schneider Electric Repair, Siemens, Toyota Europe, and Volkswagen.

A wake up call for manufacturers

Assent says its research is a 'wake up call' that 'highlights the urgent need for manufacturers to revamp their sustainability reporting practices’. 

Jamie Wallisch, Sustainability Expert at the business, explains: “Our recent study highlights that manufacturers hold a false sense of security regarding their CSRD readiness. Regardless of their size or headquarter location, manufacturers today operate on a global scale. 

“Companies need to take a more holistic approach to determine which ESG topics are material to their businesses and start engaging with entities in their value chain to address potential gaps in their CSRD reporting.”

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