27/08/2026
Category
ESG & Sustainability Reporting
The Corporate Sustainability Reporting Directive is no longer a European concern only. Asian manufacturers inside EU value chains are receiving data requests from customers who must report under CSRD, and the directive’s reach means many non-EU companies will eventually report themselves. This guide explains when CSRD applies to Asian companies, what double materiality demands, and how to prepare operations and data systems before the requests become obligations. —
If your manufacturing company exports to the European Union, the Corporate Sustainability Reporting Directive is likely already on your radar. The CSRD represents the most significant expansion of sustainability disclosure requirements in Europe’s history, and its reach extends well beyond EU borders. For Asian manufacturers in Singapore, Taiwan, Thailand, Indonesia, and Malaysia, understanding CSRD compliance is no longer a distant consideration. It is an operational priority with a defined timeline. The CSRD was adopted by the European Commission in January 2023 and entered into force shortly after. It replaces the earlier Non-Financial Reporting Directive (NFRD), which was widely regarded as too narrow in scope and too flexible in its requirements. Where the NFRD applied to approximately 11,700 companies, the CSRD is expected to cover around 50,000 companies across the EU and beyond. This dramatic expansion reflects the European Union’s conviction that sustainability disclosure must be comprehensive, standardised, and enforceable to drive meaningful change in corporate behaviour.
For manufacturers based outside the European Union, the CSRD applies under specific conditions. A non-EU parent company is required to comply if it generates more than EUR 150 million in net revenue within the EU over two consecutive financial years and has at least one EU subsidiary or branch. The compliance timeline for these so-called third-country undertakings is financial years beginning on or after 1 January 2028, with the first reports due in 2029. This threshold is significant. Many mid-to-large manufacturers across Asia meet these criteria, even if they do not have a substantial physical presence in Europe. A semiconductor components supplier in Taiwan that sells to German automotive manufacturers, a petrochemical company in Thailand with European distribution partners, or a steel producer in Indonesia exporting to EU construction firms could all fall within scope. It is important to understand that when the CSRD applies to a non-EU parent company, the reporting obligation extends to the company’s worldwide operations, not just its EU activities. This means that a Singapore-based manufacturer would need to report on its facilities across all geographies, covering the full scope of its environmental and social impact.
Although the compliance date for non-EU companies is 2028, the organisations that will report successfully are those that begin their preparation now. CSRD compliance requires far more than writing a sustainability report. It demands a systematic approach to data collection, internal controls, governance structures, and assurance processes. Many of the companies we work with at Evercomm are approaching CSRD readiness as a multi-year programme. They are using the time before the mandatory deadline to establish data infrastructure, conduct gap analyses, train their teams, and pilot their reporting processes. This approach significantly reduces the risk of last-minute scrambling, inaccurate disclosures, and failed assurance engagements. For CFOs and Compliance Officers, the practical implication is clear: the data systems, governance frameworks, and assurance processes required for CSRD compliance take 18 to 24 months to implement properly. Starting early is not an exercise in over-preparation. It is a recognition of the scale and complexity of what is required.
The CSRD carries meaningful enforcement mechanisms. EU member states are required to establish effective, proportionate, and dissuasive penalties for non-compliance. While the specific penalties vary by jurisdiction, they can include financial sanctions, public statements of non-compliance, and the withdrawal of management report approval. Beyond regulatory penalties, the commercial consequences of failing to comply are substantial. EU-based customers, investors, and business partners are increasingly expecting their supply chain to meet European disclosure standards. A company that cannot produce a CSRD-compliant sustainability statement risks being excluded from supplier programmes, losing access to EU markets, and facing increased scrutiny from financial institutions.
| Standard | Covers | Relevance to Manufacturers |
|---|---|---|
| ESRS 1 and 2 | General principles and disclosures | Applies to all reporters: governance, strategy, materiality process |
| E1 Climate change | Emissions, targets, transition plans | Core requirement for any manufacturer |
| E2-E5 | Pollution, water, biodiversity, circularity | Materiality-dependent for industrial operations |
| S1-S4 | Own workforce to consumers | Standard disclosures on people and communities |
| G1 | Business conduct | Ethics, anti-corruption, supplier conduct |
The European Sustainability Reporting Standards (ESRS) are the detailed disclosure standards that sit beneath the CSRD. Developed by the European Financial Reporting Advisory Group (EFRAG), the ESRS define exactly what information companies must disclose, how it must be structured, and what level of detail is required. The ESRS consist of 12 standards organised into four categories.
The two cross-cutting standards apply across all disclosure topics:
ESRS 2 is particularly important because it requires companies to disclose information about their governance of sustainability matters, their transition plans, their risk management processes, and their performance against specific targets. These disclosures are mandatory for every company within scope of the CSRD.
The five environmental standards address the most significant environmental impacts of business operations:
For manufacturers in industries such as semiconductors, steel, and petrochemicals, the environmental standards will typically require the most extensive data collection and the most rigorous internal controls. These industries are energy-intensive, resource-intensive, and often operate in regions with significant water stress and biodiversity sensitivity.
The social standards cover a broad range of labour and human rights issues:
The governance standard, ESRS G1 (Business Conduct), addresses anti-corruption, lobbying, and payment practices. For many Asian manufacturers, the social standards present a particular challenge. Supply chains in the region are often complex and multi-tiered, making it difficult to obtain reliable data on working conditions, health and safety practices, and labour standards beyond the first tier of suppliers. Building the processes and relationships needed to collect this data takes time, which is another reason why early preparation is essential.
EFRAG is also developing sector-specific ESRS standards that will provide additional, tailored disclosure requirements for high-impact industries. While these are still in development, sectors expected to receive specific standards include agriculture, mining, oil and gas, road transport, and coal power generation. Manufacturers in these sectors should monitor these developments closely, as sector-specific standards may introduce additional disclosure requirements beyond the topical ESRS.
To see how Evercomm helps industrial enterprises measure, reduce, and finance their transition to sustainable operations, visit https://evercomm.io.
Yes. The CSRD applies to non-EU companies that generate more than EUR 150 million in net revenue within the EU and have at least one EU subsidiary or branch. This means many Asian manufacturers exporting to EU markets, including those in Singapore, Taiwan, Thailand, Indonesia, and Malaysia, fall within scope. Non-EU parent companies are required to report on their worldwide operations, not just their EU activities.
Double materiality is a core concept of the CSRD that requires companies to assess sustainability topics from two perspectives. Financial materiality considers how sustainability risks and opportunities affect the company’s financial performance. Impact materiality considers how the company’s activities affect people and the environment. A topic is material if it is significant from either perspective, and companies must disclose information on all topics that meet either threshold.
The European Sustainability Reporting Standards (ESRS) are a set of 12 standards developed by EFRAG that define what companies must disclose under the CSRD. They include two cross-cutting standards covering general principles and the actual and potential impacts on people and the environment, five environmental standards (climate change, pollution, water, biodiversity, and resource use), four social standards (own workforce, value chain workers, affected communities, and consumers), and one governance standard covering business conduct.
Non-EU companies meeting the revenue threshold of more than EUR 150 million within the EU are required to comply with the CSRD for financial years beginning on or after 1 January 2028. Their first CSRD-compliant reports would be due in 2029. However, many companies are beginning preparation now because the data collection, systems, and processes required for compliance take considerable time to establish.
While both frameworks require sustainability disclosures, the CSRD differs from GRI in several key ways. The CSRD mandates double materiality assessment, whereas GRI focuses primarily on impact materiality. CSRD reports must be integrated into the company’s annual management report and subject to limited assurance, evolving to reasonable assurance. The ESRS standards under CSRD are more prescriptive in their data requirements and specify specific disclosure points that companies must address.
Under ESRS E1 (Climate Change), manufacturers must disclose Scope 1, Scope 2, and material Scope 3 GHG emissions using the GHG Protocol methodology. They must also provide a transition plan aligned with the Paris Agreement, disclose climate-related risks and opportunities, describe resilience strategies including scenario analysis, and report on internal carbon pricing and targets. Data must be granular, traceable, and supported by documented methodologies.
Directly, yes, in two cases: non-EU companies with significant EU turnover and EU subsidiary or branch activity will face reporting obligations on their EU operations in later waves. Indirectly, it already applies across Asian supply chains, because EU customers must report value chain data under ESRS and are sending detailed data requests to their Asian suppliers.
Double materiality assesses sustainability topics from two directions: how they affect the company’s finances (financial materiality) and how the company impacts people and environment (impact materiality). A topic is reportable if it is material in either direction. This dual lens is why CSRD reaches further than investor-focused regimes and why boilerplate responses fail.
Treat the request as a data contract. Inventory exactly which metrics are requested, map them to your internal systems, and respond with figures that are traceable to source with documented methodologies. Suppliers who respond with verified, consistent data across customers turn compliance requests into a procurement advantage over rivals who answer with estimates.
CSRD is the directive that mandates sustainability reporting and specifies who must report. The EU Taxonomy is a classification system used inside those reports to define which activities are environmentally sustainable, expressed as eligibility and alignment percentages of turnover, CAPEX, and OPEX. CSRD asks whether you report; taxonomy asks how green the activity is.
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Since 2013, we have been helping businesses optimise resource efficiency, reduce carbon emissions, manage climate risk scenarios, and meet international compliance standards ensuring long-term operational and financial sustainability.
Our advanced planning and simulation tools provide precision-driven carbon, energy and waste reduction strategies tailored to your unique operations. Grounded in internationally recognised ISO Standards, Evercomm ensures data integrity, credibility, and verifiability in emissions reduction tracking and reporting. By integrating globally recognised compliance frameworks, including GRI, SBTi, ISSB, and ESRS, we enable organisations to meet stringent regulatory requirements while reinforcing their business resilience.
As a trusted partner, Evercomm helps businesses turn compliance obligations into strategic advantages ensuring they stay ahead in a rapidly shifting economic and regulatory environment.
