Sector · Manufacturing

Double materiality for manufacturing.

Manufacturing undertakings face concentrated impact materiality across climate, pollution, circularity and value-chain labour — overlaid with CBAM, the Industrial Emissions Directive and the ESPR. This sector guide outlines the typical material IROs, the regulatory overlay, and the DMA pitfalls observed in Wave 1 filings.

4 of 10
ESRS topics typically material
C10–C33
NACE code range
~3,200
EU Wave 2 in-scope est.
VALUE CHAIN POSITION · MANUFACTURING 3 STAGES
UPSTREAM Raw materials Components Energy inputs Contract labour E1 · E2 · S2 OPERATIONS Manufacturing plants Process emissions Water use Waste generation Workforce E1 · E2 · E5 · S1 DOWNSTREAM Distribution Product use End-of-life Clienti E5 · S4 · G1

Where manufacturing’s material topics cluster.

All 10 ESRS topics plotted on a dual-materiality map calibrated to the sector. Click any topic for the specific IROs, scoring rationale and disclosure mapping. Switch between typical and heightened scenarios — the latter reflects exposure to carbon-intensive processes, regulated sites, or complex supply chains.

Live · Sector Materiality Heatmap
10 ESRS topics · impact vs financial materiality
Impact materiality Financial materiality low high low high
High materiality Medium Low Not typically material
Click any topic on the map to view IROs and scoring

12 illustrative IROs for manufacturing.

Impacts, risks and opportunities drawn from the topical ESRS and EFRAG IG 1, contextualised to manufacturing’s typical operations and value chain. Filter by category.

Impact E1

Direct Scope 1 process emissions

Combustion and process emissions from manufacturing operations contribute directly to global warming. Severity depends on sector intensity and plant location.

Impact E2

Air and water pollution from site operations

Release of regulated pollutants into air or water bodies. Impact scale depends on sensitivity of receiving environment and treatment controls.

Impact E5

Generation of hazardous and non-hazardous waste

Manufacturing processes produce process-specific waste streams with varying disposal pathways and environmental burden.

Impact S2

Labour conditions in upstream supply chains

Extractive and component suppliers may operate in jurisdictions with weaker labour protections. Severity takes precedence over likelihood for human-rights impacts under ESRS 1 §45.

Risk E1

Carbon pricing exposure via ETS and CBAM

Direct exposure to EU ETS allowance costs; CBAM extends carbon-cost parity to imports. Magnitude scales with carbon intensity of inputs.

Risk E2

Industrial Emissions Directive compliance

IED permit conditions tightening on NOx, SOx and dust. Non-compliance triggers fines and operating restrictions.

Risk E5

Raw material price volatility

Virgin material supply shocks, export restrictions, and CRM dependency increase input cost volatility. Material for manufacturers with thin margins.

Risk S1

Site-level health and safety incidents

Manufacturing environments carry occupational safety risks. Incidents trigger regulatory response, operational disruption, and reputational damage.

Opportunity E1

Taxonomy-aligned turnover from low-carbon products

Products and processes meeting EU Taxonomy technical screening criteria can be reported as aligned turnover, improving capital access.

Opportunity E5

Circular business model propositions

Remanufacturing, product-as-a-service, and secondary-materials supply routes create new revenue streams and hedge against raw material risk.

Opportunity E1

Energy efficiency and electrification

Process electrification and efficiency investments reduce operating costs and lower exposure to energy price and carbon cost volatility.

Opportunity G1

Responsible-sourcing supplier certification

Certified supplier programmes reduce S2 value-chain risk while unlocking premium contracts with ESG-oriented customers.

EU regulations that intersect the DMA.

These adjacent EU regulations shape which impacts and financial effects are likely to score as material for a manufacturing undertaking. Read them into the DMA as evidence sources.

Regulation (EU) 2023/956

Carbon Border Adjustment Mechanism (CBAM)

Definitive regime from 1 January 2026. Imposes a carbon cost on EU imports of cement, iron and steel, aluminium, fertilisers, electricity and hydrogen. Affects E1 financial materiality.

Directive (EU) 2024/1785

Industrial Emissions Directive (IED 2.0)

Revised IED tightens BAT conclusions, extends scope to additional activities, and adds transformation plan requirements. Affects E1 and E2 impact and financial materiality.

Regulation (EU) 2024/1781

Ecodesign for Sustainable Products (ESPR)

Expands ecodesign requirements beyond energy-using products. Introduces the Digital Product Passport. Affects E5 impact materiality and S4 consumer disclosures.

Regulation (EU) 2023/1542

Batteries Regulation

Due diligence, recycled content, carbon footprint and extended producer responsibility for batteries. Affects S2, E5 and E1 IROs for manufacturers in scope.

Regulation (EU) 2017/821

Conflict Minerals Regulation

Due diligence requirements for importers of tin, tungsten, tantalum and gold. Evidence input for S2 value-chain worker IROs.

Directive (EU) 2008/98 (as amended)

Waste Framework Directive

Waste hierarchy, extended producer responsibility, end-of-waste criteria. Shapes E5 resource use and circular economy materiality.

Six DMA errors seen in Wave 1 manufacturing filings.

Patterns drawn from EFRAG’s 2025 implementation review and a review of published Wave 1 manufacturing CSRD reports. Treat as a pre-flight checklist before the DMA is signed off.

Pitfall 01

Scope 3 emissions undercounted or omitted

Upstream purchased goods (Cat. 1) and downstream use of sold products (Cat. 11) are often where manufacturing Scope 3 concentrates, yet are frequently treated as “not material” without analysis.

Pitfall 02

CBAM not reflected in financial materiality

Definitive CBAM regime in force from January 2026. Financial materiality scores for E1 need to reflect CBAM exposure on imported inputs, not only direct carbon costs.

Pitfall 03

Value-chain labour impact assessed only for direct suppliers

S2 requires assessment beyond Tier 1. Severity-over-likelihood (ESRS 1 §45) applies to potential human-rights impacts deep in the chain.

Pitfall 04

Waste treated as operational, not impact material

E5 resource use covers waste generation and circularity, not just waste compliance. Impact materiality extends to end-of-life of products sold.

Pitfall 05

Stakeholder engagement limited to the workforce

ESRS 1 §24 distinguishes affected stakeholders from users of sustainability statements. Local communities near sites and value-chain workers both need to be considered.

Pitfall 06

Transition plan disclosures not linked to DMA outputs

The climate transition plan should reflect material E1 IROs identified in the DMA. Disjoint between the DMA and the transition plan is a common assurance flag.