CSRD ESRS E5: what plastic disclosures companies must make

What ESRS E5 covers and why plastics are central

The European Sustainability Reporting Standards, adopted under the EU's Corporate Sustainability Reporting Directive (CSRD), determine what sustainability information in-scope companies must disclose. ESRS E5, titled Resource Use and Circular Economy, addresses material flows of resources — including plastic — through an organisation's value chain. It is one of five environmental standards alongside Climate Change (E1), Pollution (E2), Water (E3), and Biodiversity (E4).

For consumer-facing companies, packaging-intensive manufacturers, and retailers, ESRS E5 is among the most operationally demanding standards. It requires companies to trace material inputs and outputs across upstream and downstream value chain stages — a task that, for plastics, means quantifying the polymer tonnage embedded in supplier-provided packaging, own-production components, and consumer-disposed end-of-life material. The data collection challenge is significant because plastic is rarely measured systematically as a standalone material category in enterprise resource planning systems.

Application timeline

CSRD application is phased. Companies already subject to the Non-Financial Reporting Directive — approximately 11,700 large public-interest entities across the EU — must file CSRD-compliant reports for FY2024. All other large companies meeting two of three size thresholds (250+ employees, €50M+ turnover, €25M+ balance sheet) must file for FY2025. Listed SMEs join from FY2026. Non-EU companies with significant EU business are captured under the VSME and large-company thresholds depending on EU revenue exposure.

Limited assurance over sustainability disclosures is mandatory from the first filing year. Reasonable assurance — a materially higher standard — is required from FY2028. This means companies must begin building audit-grade data systems for plastic measurement now, not at the point of FY2028 reporting.

The double materiality assessment and plastics

Disclosure obligations under CSRD are contingent on a double materiality assessment (DMA): the structured process by which companies determine which sustainability topics are material and therefore subject to mandatory reporting. A topic is material if it is material from an impact perspective (the company's activities cause significant positive or negative environmental or social impacts) or from a financial perspective (sustainability risks and opportunities could have material financial effects on the company).

For most companies using plastic at scale, ESRS E5 will satisfy both tests. On the impact side, plastic use generates waste, contributes to pollution, and depletes non-renewable petrochemical feedstocks — impacts that are measurable, widespread, and causally linked to company activity. On the financial side, EPR fee obligations in France, Germany, and the UK, incoming recycled content mandates under the PPWR (30% by 2030), and reputational exposure from plastic pollution incidents create quantifiable financial risk. The EFRAG implementation guidance states that companies concluding ESRS E5 is not material must document and justify this conclusion — a position that will be very difficult to defend for any consumer goods, packaging, or retail entity operating at significant scale.

The five disclosure requirements

ESRS E5 is structured around policies, targets, actions, and metrics. The metric requirements represent the data-intensive disclosures most directly relevant to plastic footprint quantification.

• E5-1 (Policies): Companies must describe policies related to resource use, including commitments to circular economy principles, recycled content targets, or plastic reduction strategies. Policies must be board-approved and cover material value chain stages.
• E5-2 (Targets): Where companies have set targets related to resource use — such as a percentage of recycled content by a given year or an absolute plastic reduction goal — these must be disclosed with baseline years, intermediate milestones, and the methodology used to set and track them.
• E5-3 (Actions and resources): Companies must disclose the specific actions being taken to achieve resource use targets and the financial resources allocated to these actions. For plastics, this includes investment in packaging redesign, supplier development, alternative materials procurement, and plastic credit programmes — which must be characterised as offset actions distinct from primary reduction efforts.
• E5-4 (Resource inflows): This is the primary plastic disclosure metric. Companies must quantify material inflows by category, including the weight of plastic materials consumed, disaggregated by renewable and non-renewable origin and, where material, by polymer type. The standard permits estimation where primary data is unavailable, but requires disclosure of the estimation methodology and its uncertainty range.
• E5-5 (Resource outflows and waste): Companies must report waste generated — including plastic packaging waste — by waste category and disposal route (reuse, recycling, landfill, incineration, open burning). For companies with significant consumer-facing plastic footprints, this requires Scope 3 downstream waste estimation, the data point most commonly absent from corporate sustainability data systems.

The Scope 3 downstream challenge

The most significant operational challenge in ESRS E5 compliance for consumer goods and retail companies is Scope 3 downstream plastic waste — the packaging in which their products are sold, disposed of by consumers, and entering the waste stream. This category typically accounts for 70 to 90 percent of a consumer brand's total plastic footprint, yet is the most difficult to quantify: it requires data on consumer disposal behaviour, national collection rates, and waste management outcomes in each market where products are sold.

EFRAG's implementation guidance acknowledges that spend-based and Bill of Materials estimation approaches will be acceptable for Scope 3 plastic data in initial reporting cycles, provided uncertainty ranges are disclosed. However, auditors conducting limited assurance are examining the coherence of Scope 3 methodologies, and mismatches between stated uncertainty and the apparent precision of reported figures are generating qualified opinions in first-cycle CSRD reports. EY and Deloitte have both issued internal guidance warning that plastic footprint disclosures are likely to attract emphasis-of-matter opinions in FY2024 filings given the material uncertainty inherent in estimation-based approaches.

Plastic credits and E5-3 disclosure

ESRS E5 does not require companies to disclose plastic credit purchases as a standalone metric. However, plastic credit programmes are directly relevant to E5-3, which requires disclosure of actions taken to address resource use impacts. EFRAG's guidance distinguishes between actions that reduce the company's footprint (primary) and actions that compensate residual impact through offsets (secondary).

Companies that use plastic credits to support plastic neutrality claims while disclosing inadequate reduction actions or targets risk regulatory scrutiny under both CSRD and the EU Green Claims Directive, which prohibits environmental claims not substantiated by defined criteria. The defensible disclosure approach combines: a quantified plastic footprint (E5-4 and E5-5), documented reduction targets and actions (E5-2 and E5-3), and credit programme disclosure that clearly characterises credits as addressing residual plastic rather than substituting for reduction effort.

Practical preparation

Companies facing CSRD E5 obligations should take four preparatory steps. First, complete a double materiality assessment scoping exercise to confirm ESRS E5 materiality for plastics across the value chain — most consumer-facing companies will find it is material. Second, initiate a Bill of Materials audit for own-production packaging to establish Scope 1 and Scope 2 plastic data with audit-grade accuracy, resolving the common 10 to 30 percent discrepancy between supplier-declared and physically verified packaging weights. Third, design a Scope 3 estimation methodology for downstream consumer packaging using a recognised approach such as the Plastic Disclosure Project framework or the WBCSD Plastic Protocol. Fourth, align internal reporting processes so that E5 disclosures are supported by the same data systems used for EPR fee calculations — the two obligations share a common data foundation that should be integrated rather than maintained separately, reducing duplication and improving data quality over successive reporting cycles.