Tracking Down the Gaps in Manufacturing SustainabilityTracking Down the Gaps in Manufacturing Sustainability

A new report reveals that manufacturers are struggling to obtain the data needed to meet the EU’s CRSD reporting requirements.

Rob Spiegel

January 31, 2025

3 Min Read
Tracking Down the Gaps in Manufacturing Sustainability
Assent

At a Glance

  • Three quarters of manufacturers currently have critical gaps in meeting the CSRD requirements.
  • The complexity of the manufacturing supply chain doesn’t help as companies face CSRD requirements.
  • Manufacturers need to take a holistic approach to determine which ESG topics are material to their businesses.

As industrial companies move to improve their sustainability practices, manufacturers are struggling to keep up. Increasing regulations are making sustainability a mandate for conducting business. The complexity of the manufacturing supply chain doesn’t help. Assent Inc. a company that provides supply chain sustainability management, evaluated over 150 manufacturers across multiple sectors to assess their readiness for new environmental, social, and governance (ESG) reporting requirements. ESG reporting is mandated under the EU’s Corporate Sustainability Reporting Directive (CSRD), which begins to go into effect during 2025.

With over 84 disclosure topics and 1,000 data points potentially required, the CSRD requires a new level of supply chain engagement and transparency for companies to meet the expansive disclosure requirements across ESG topics. Assent’s CSRD Readiness Report: Evaluating Sustainability Reporting in Manufacturing reveals that while over 99% of manufacturers are integrating ESG considerations into their business strategies, there are gaps in reporting on numerous ESG topics mandated by the EU directive. Three quarters of manufacturers do not currently meet complete CSRD requirements.

Critical gaps revealed in Assent’s report

Related:Sustainability in Manufacturing Offers Opportunities for Growth & Innovation

Assent’s sustainability report shows that manufacturers in the industrial equipment, electronics, medical devices, automotive, and other manufacturing industries currently have critical gaps in meeting the CSRD requirements in the following areas:

  • 24% of the 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

The report shows that manufacturers tend to believe they are ready to meet the requirements. "Our recent study highlights that manufacturers hold a false sense of security regarding their CSRD readiness," Jamie Wallisch, sustainability expert at Assent, told Design News. "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."

Related:The Tricky World Analyzing Materials for Sustainability

The CSRD is just one legal requirement that continues to drive a need for increased transparency, accountability, and supply chain due diligence for companies. Large EU publicly listed companies are required to submit their first reports according to the CSRD standards in 2025 based on 2024 data, and large EU companies that are not publicly listed will need to meet the new reporting obligations in 2026. Global companies with EU subsidiaries that meet the size threshold also come into scope in 2026.

Difficulties facing manufacturers

One of the major hurdles manufacturers face is the difficulty in collecting data.  “Manufacturers struggle in their ability to capture data when it comes to regulatory compliance. With the complexity of their business, it’s difficult to get the information that’s required,” said Wallisch. The supply chains are vast and complex. How can they capture the data and put it in reports? Manufacturers are slow in complying with ESG because of the difficulty in capturing data. It is getting better, however, because of the expectations from stakeholders.”

Related:Tire Makers Rolling Towards Greater Sustainability

Meeting the requirements tends to be easier for larger companies because they have greater leverage over suppliers. That results in their ability to get compliance data. “The bigger players create and establish the expectation of the market. If the big players say they need the data, they generally get access,” said Wallisch. “Big players know their power over the industry. They spearhead the market and push it down as an established pattern. The smaller manufacturers tend to wait to see if it’s a required need.”

About the Author

Rob Spiegel

Rob Spiegel serves as a senior editor for Design News. He started with Design News in 2002 as a freelancer covering sustainability issues, including the transistion in electronic components to RoHS compliance. Rob was hired by Design News as senior editor in 2011 to cover automation, manufacturing, 3D printing, robotics, AI, and more.

Prior to his work with Design News, Rob worked as a senior editor for Electronic News and Ecommerce Business. He served as contributing editolr to Automation World for eight years, and he has contributed to Supply Chain Management Review, Logistics Management, Ecommerce Times, and many other trade publications. He is the author of six books on small business and internet commerce, inclluding Net Strategy: Charting the Digital Course for Your Company's Growth.

He has been published in magazines that range from Rolling Stone to True Confessions.

Rob has won a number of awards for his technolloghy coverage, including a Maggy Award for a Design News article on the Jeep Cherokee hacking, and a Launch Team award for Ecommerce Business. Rob has also won awards for his leadership postions in the American Marketing Association and SouthWest Writers.

Before covering technology, Rob spent 10 years as publisher and owner of Chile Pepper Magazine, a national consumer food publication. He has published hundreds of poems and scores of short stories in national publications.

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