CSRD guide for the consumer products sector

When we analyse how CSRD (Corporate Sustainability Reporting Directive) impacts the consumer products sector, the first thing we need to understand is that this isn't just another sustainability report sitting on your corporate website.

We're talking about a fundamental transformation in how consumer brands measure, manage and communicate their product footprint and supply chain impact. CSRD converts sustainability data into a regulatory requirement with the same rigour as financial reporting.

Consumer product companies that understand their value chain impact and convert it into actionable data gain efficiency, reduce risks and prepare for the regulatory demands that are coming. Those that don't will simply lose market access.

This guide explores everything you need to know about CSRD in the consumer products sector: what it requires, when it applies, which metrics matter most, and how to build a product-level data system that goes beyond compliance.

What is CSRD and Why Does it Matter for Consumer Products?

The Corporate Sustainability Reporting Directive is the European regulation that replaces the old NFRD (Non-Financial Reporting Directive). It requires standardised and auditable ESG (Environmental, Social and Governance) disclosures based on double materiality.

Double materiality means two things:

• How your company's activities affect the environment and society
• How ESG risks and opportunities affect your business financially

Unlike previous regulations, CSRD applies to a much broader range of companies. It's not just for large listed corporations anymore. The directive covers:

All listed companies on regulated markets (except micro-enterprises) and large companies exceeding two of these three thresholds: 250 employees, €40M revenue, or €20M balance sheet. It also includes parent companies, substantial subsidiaries, and third-country companies with significant EU presence (e.g., >€150M EU revenue).

Before the "Omnibus" simplification package of December 2025, CSRD affected tens of thousands of European companies. The recent reforms have adjusted thresholds and timelines, but the core requirement remains: if you're a significant consumer brand in the UK or selling across Europe, CSRD will impact you.

Why Consumer Product Companies Can't Ignore This

For consumer brands, sustainability data is product data. Your packaging materials, ingredient sourcing, manufacturing processes, distribution footprint, product use and end-of-life management are all under scrutiny. CSRD requires you to measure, verify and report these activities with audit-grade quality.

More importantly, not measuring means not selling. Increasingly, retailers, investors, regulators and conscious consumers demand transparency on product-level ESG performance. Brands that can demonstrate their impact with reliable and comprehensive ESG data maintain shelf space, win tenders and build stronger market positions.

The consumer products sector faces unique challenges: your impact lives across the entire value chain (from raw materials to end-of-life), your data is scattered across suppliers in multiple countries, and consumers can directly challenge your sustainability claims through anti-greenwashing regulations.

CSRD Requirements Specific to Consumer Products

CSRD doesn't define sector-specific standards (the planned sectoral projects were postponed or made voluntary). However, the ESRS (European Sustainability Reporting Standards) framework establishes environmental and social indicators applicable to all industries.

In consumer products, the most relevant topics are typically: climate impact across the value chain, packaging and circular economy, raw material sourcing, chemical safety, supply chain labour conditions and product claims and consumer protection.

Key Environmental Metrics for Consumer Brands

According to ESRS, consumer product companies must report on several critical areas:

Climate (ESRS E1)

• Total energy consumption and associated costs
• GHG emissions across Scopes 1, 2 and 3 (raw materials, manufacturing, distribution, use, disposal)
• Emission intensity per product category or functional unit
• Percentage of renewable energy used
• Reduction targets and transition plans aligned with Paris Agreement

Pollution (ESRS E2)

• Substances of concern in products and packaging
• Chemical safety and substitution programmes
• Microplastics and persistent pollutants
• Air and water emissions from manufacturing

Water and Marine Resources (ESRS E3)

• Water consumption in raw material production (especially agriculture)
• Water stress in sourcing locations
• Discharge quality and treatment
• Impact on marine ecosystems (for fishing, aquaculture-based products)

Biodiversity (ESRS E4)

• Impact on ecosystems from raw material sourcing
• Deforestation-free sourcing commitments (coffee, cocoa, palm oil, soy, leather)
• Land use change and habitat protection

Circular Economy (ESRS E5)

• Packaging materials and weights
• Recyclable content and recyclability
• Design for durability, repair and reuse
• Waste generation and valorisation
• Product take-back and end-of-life management

Social and Governance Metrics

Beyond environmental data, consumer brands must also report on:

Own Workforce (ESRS S1)

• Health and safety in manufacturing facilities
• Workforce diversity and equal treatment
• Collective bargaining coverage
• Training and development programmes

Value Chain Workers (ESRS S2)

• Labour conditions in supplier factories
• Due diligence in high-risk countries
• Child labour and forced labour prevention
• Living wages and working hours compliance
• Subcontractor audits and remediation

Consumers and End-Users (ESRS S4)

• Product safety and quality
• Information and labelling accuracy
• Consumer complaints and recalls
• Accessibility and inclusion

Business Conduct (ESRS G1)

• Anti-corruption in sourcing and distribution
• Fair competition compliance
• Whistleblowing channels
• Responsible marketing and claims

Implementation Timeline: UK vs EU

The original European timeline classified companies into waves: those already complying with NFRD (public companies with >500 employees) had to report in 2025 (FY2024 data), other large companies in 2026 (FY2025 data), listed SMEs in 2027 (FY2026 data), and non-European companies in 2029 (FY2028 data).

However, after the 2025 reforms ("stop-the-clock" and Omnibus), these dates were delayed by two years: large companies (non-NFRD) will report from FY2027 (report in 2028) and listed SMEs from FY2028 (report in 2029).

Summary Timeline for Spain/EU:

2025: First wave reports begin (NFRD companies with FY2024 data)

2027: Large companies not previously in NFRD start (FY2027 data, report in 2028)

2028: Listed SMEs begin (FY2028 data, report in 2029)

2029: Foreign companies with EU subsidiaries or significant sales start (FY2028 data, report in 2029)

The UK Position: Different Path, Same Direction

In the United Kingdom, CSRD as an EU directive does not apply. However, sustainability disclosure is gaining force through local regulations.

Since April 2022, large UK companies (all with >500 employees or £500M sales) must publicly disclose climate information according to TCFD (Task Force on Climate-related Financial Disclosures) taxonomy.

Additionally, the Government plans to adopt the IFRS Foundation standards (IFRS S1 general and IFRS S2 climate) as UK Sustainability Reporting Standards (UK SRS). These standards are expected to enter force from 2026 (for FY2025 reports).

Key Differences: EU (CSRD) vs UK

Key Differences: EU (CSRD) vs UK

Base regulation
Spain/EU (CSRD): CSRD Directive (EU) with mandatory ESRS standards.
United Kingdom: National laws such as the Companies Act and FCA rules, plus future UK SRS based on IFRS.

Mandatory subjects
Spain/EU (CSRD): Large EU companies, listed companies including certain SMEs, EU parent subsidiaries, and non-EU companies with more than €150M in EU sales.
United Kingdom: Large UK companies subject to TCFD since 2022; in the future, listed companies applying IFRS S1 and S2.

Materiality
Spain/EU (CSRD): Double materiality. Companies must report both their impact on society and the environment and the financial impact on the business.
United Kingdom: Financial or investor focused materiality. Emphasis on sustainability risks and opportunities affecting the business, similar to ISSB.

Standards
Spain/EU (CSRD): Detailed and audited ESRS, European Sustainability Reporting Standards.
United Kingdom: IFRS S1 and S2 issued by ISSB, to be adopted as UK SRS under consultation, plus TCFD climate requirements.

Timelines
Spain/EU (CSRD): Phased implementation. First reports in 2025 covering FY24 for large companies, with a two year delay for other entities.
United Kingdom: Climate reporting required from FY22. IFRS based standards expected to become mandatory from 2026, subject to final regulation.

Audit
Spain/EU (CSRD): Mandatory external audit of the sustainability report.
United Kingdom: Not yet mandatory, pending further development of SDR and UK SRS regulation.

Penalties
Spain/EU (CSRD): National fines, potentially based on a percentage of revenue, for non compliance.
United Kingdom: Fines under the Companies Act and FCA supervision, not ESG specific sanctions at this stage.

How to Build a CSRD Compliance System for Consumer Products

Creating a robust CSRD reporting system isn't just about writing a report once a year. It requires building a product-level data infrastructure that can withstand audits and support operational decisions.

Step 1: Define Scope and Governance

Start by clarifying which entities, brands, product categories and geographies fall within your reporting scope. For consumer brands, this typically includes all owned brands, licensed products and significant joint ventures.

Establish a CSRD committee with representatives from Finance, Sustainability, R&D, Quality, Procurement, Supply Chain, Legal and Marketing. This cross-functional team ensures data flows from all relevant areas and aligns with business strategy.

Step 2: Conduct Double Materiality Assessment

The foundation of CSRD is double materiality. You need to determine which ESG topics are material to your business from two perspectives:

Impact materiality: How do your products affect the environment and people throughout their lifecycle? Consider raw material extraction, manufacturing emissions, packaging waste, chemical safety, water use, labour conditions in supplier factories, consumer health, etc.

Financial materiality: How do ESG risks and opportunities affect your business performance? Consider regulatory compliance costs (PPWR, EUDR, chemical restrictions), supply chain disruptions, consumer backlash from greenwashing, access to sustainable finance frameworks, brand reputation, shelf space requirements, etc.

For consumer brands, common material topics include climate change (E1), pollution and chemicals (E2), water (E3 for agricultural products), biodiversity (E4 for natural ingredients), circular economy and packaging (E5), supply chain labour (S2), and business conduct including claims (G1).

Step 3: Map Your Value Chain and Identify Hotspots

Think of your value chain in tiers:

Tier 1: Direct suppliers (manufacturers, co-packers, contract manufacturers)

Tier 2: Raw material processors (textile mills, ingredient processors, chemical suppliers)

Tier 3+: Primary producers (farmers, mines, forestry, fisheries)

Downstream: Distributors, retailers, consumers, waste managers

Create a hotspot analysis by product category:

• Which raw materials have highest environmental/social risk?
• Which manufacturing processes are most energy/water intensive?
• Which packaging materials are most problematic?
• Which sourcing countries have highest labour risk?
• Which products have highest use-phase impact?

This analysis guides your data collection priorities.

Step 4: Build Product-Level Data Infrastructure

Unlike corporate-level reporting, consumer products require granular, product-level data. This means:

Bill of Materials (BOM) with ESG attributes:

• Every ingredient/component with origin, certifications, impact factors
• Packaging specification (materials, weights, recyclability, recycled content)
• Manufacturing process data (energy, water, waste per unit)
• Version control for recipe/formulation changes

Supply chain traceability:

• Supplier master data (location, certifications, audit status, risk tier)
• Purchase order linkage (which products use which suppliers)
• Country-of-origin tracking (especially for EUDR compliance)
• Tier 2/3 visibility for critical materials

Lifecycle impact data:

• Scope 3 emissions by product category
• Water footprint for water-intensive products
• Packaging end-of-life fate and recycling rates
• Use-phase energy consumption (for electrical products)

Step 5: Set Realistic Targets and Transition Plans

CSRD requires you to set objectives with baseline year, scope, methodology and associated CAPEX/OPEX. Whenever possible, align those goals with recognised frameworks such as the SBTI to ensure scientific credibility and consistency. Don't just pick arbitrary numbers – link objectives to product innovation.

• Packaging reduction and lightweighting programmes
• Recyclable/reusable packaging targets
• Sustainable material sourcing commitments (certified, regenerative)
• Chemical substitution roadmaps
• Product durability and repair initiatives
• Carbon footprint reduction by product line
• Supply chain decarbonisation (renewable energy in factories)
• Living wage programmes for key sourcing regions

These aren't just "sustainability initiatives" – they're innovation programmes and risk mitigation strategies that also reduce environmental impact.

Technology Solutions for CSRD Compliance

The complexity of CSRD pushes consumer brands to adopt specialised ESG and product data management platforms. Spreadsheets and disconnected systems simply cannot deliver the traceability, accuracy and audit-readiness required.

What to Look for in a CSRD Platform for Consumer Products

A robust solution should provide:

Product-Level Data Management: Integration with PLM (Product Lifecycle Management), R&D formulation systems, and quality systems to capture BOM, recipes, specifications and changes.

Supply Chain Transparency: Supplier portals, due diligence workflows, audit management and traceability tools that connect tier 1 to tier 3 suppliers.

Lifecycle Impact Calculation: Built-in methodologies for calculating product Carbon Footprint (ISO 14067), water footprint, and multi-impact environmental assessment (PEF - Product Environmental Footprint).

Packaging and Circular Economy: Tools to track packaging materials, weights, recyclability, recycled content and compliance with PPWR (Packaging and Packaging Waste Regulation).

Traceability and Evidence Management: Every data point linked to source documents (supplier declarations, test certificates, audit reports, invoices) with version control and audit trails.

Multi-Framework Compatibility: Generate reports compliant with ESRS, CSRD, Taxonomy, ISO standards, PEF, EPD and customer-specific requirements from a single dataset.

Digital Product Passport Ready: Structure data to support future Digital Product Passport (DPP) requirements under Ecodesign for Sustainable Products Regulation (ESPR).

Leading Platform Options

Several technology solutions serve the consumer products sector:

Dcycle stands out as a comprehensive ESG management platform that automates data collection, executes double materiality analysis and generates auditable XBRL reports according to ESRS. It centralises all ESG information in one place, compatible with CSRD, Taxonomy, ISO and more. We are not auditors or consultants – we are a solution for companies that need to collect all their ESG information and distribute it automatically across different use cases.

Other options include PLM systems with ESG modules (for product data), supply chain transparency platforms (for traceability), LCA software (for product footprinting), and general-purpose ESG software adapted to consumer goods.

The right platform depends on your product portfolio complexity, geographic spread, supply chain structure and existing systems. But regardless of which you choose, implementing a purpose-built ESG platform is no longer optional – it's a prerequisite for efficient CSRD compliance.

Recommendations Before Implementing CSRD

Before you dive into CSRD implementation, consider these strategic recommendations:

Define Product-Level Materiality

Don't just assess materiality at corporate level. Different product categories have different hotspots:

Fashion: Fibre sourcing, dyeing/finishing, microfibre shedding, durability Cosmetics: Palm oil, microplastics, packaging, chemical safety Food: Deforestation, water use, agriculture emissions, packaging, food waste Electronics: Rare earth minerals, energy use-phase, repairability, e-waste Home Care: Chemical ingredients, packaging, water use in consumer use-phase

Tailor your data collection and reporting to category-specific risks.

Segment Your Supply Base for Engagement

CSRD success depends on efficient value chain data management. You can't treat all suppliers equally.

Segment by criticality:

• Strategic tier 1 (top 20%): Demand primary data, conduct audits, provide capacity building
• Managed tier 1 (middle 60%): Standard questionnaires, accept secondary data with improvement roadmap
• Transactional tier 1 (long tail): Industry averages, flag high-risk only

For tier 2/3: Focus traceability on high-risk materials (deforestation commodities, conflict minerals, water-stressed regions).

Prepare for Customer Data Requests

Even if you're not directly obligated, your retail customers will demand product-level ESG data.

Large retailers increasingly require:

• Product carbon footprint per SKU
• Packaging materials and recyclability
• Sourcing country and certifications
• Social compliance audit status
• Chemical composition and safety data

Having robust, verified data positions you as a preferred supplier. Lack of data means lost shelf space.

Align Innovation Roadmap with ESG Data Needs

Use CSRD preparation as an opportunity to redesign products for sustainability and data transparency:

• Simplify formulations to reduce ingredients and improve traceability
• Standardise packaging materials across product lines
• Shift to certified or traceable raw materials
• Design for recyclability and end-of-life
• Build sustainability into NPD (New Product Development) stage gates

Products designed with sustainability in mind are easier to report on and meet evolving regulations.

Why Dcycle is the Best Solution for Consumer Products CSRD

When choosing an ESG management platform for CSRD compliance, what really matters isn't just functionality – it's the ability to deliver a comprehensive, product-centric solution oriented to the real complexity of consumer goods.

We are not auditors or consultants. We are a solution designed for companies that want to measure, manage and communicate their product and supply chain impact simply and efficiently.

Our objective is clear: enable every organisation to collect all their ESG information at product level and distribute it automatically to different use cases, without complications or manual processes.

We centralise environmental, social and governance data from any source – PLM, procurement systems, supplier portals, quality systems, LCA databases – and convert it into standardised, traceable product metrics ready for official reports. Companies can generate documentation compatible with EINF, CSRD, ISO 14067, PEF, EPD or any other standard in minutes.

Why Consumer Brands Choose Us

Product-Level by Design: We understand that in consumer goods, sustainability lives at the SKU/formulation level. Our platform structures data around products, BOMs and supply chains, not just corporate aggregates.

Value Chain Transparency: Manage multi-tier supplier data, due diligence workflows, audit status and traceability documentation in one place. Support both mandatory due diligence (EUDR, CSDDD) and CSRD reporting needs.

Lifecycle Impact Built-In: Calculate product carbon footprint, water footprint and multi-impact environmental profiles with recognised methodologies (ISO 14067, PEF). Link calculations to BOM changes automatically.

Complete Traceability: Every metric links back to source evidence – supplier declarations, certifications, test reports, ingredient specs, packaging drawings. This isn't just good practice, it's a requirement for external assurance and claims substantiation.

Multi-Regulation Ready: Generate reports and data exports for CSRD, Taxonomy, PPWR, EUDR, DPP and customer-specific requirements from a single dataset. No duplication, no inconsistencies.

Strategic, Not Just Compliance: We firmly believe sustainability should be a strategic lever for innovation and market access, not an administrative burden. Our mission is clear: convert ESG data into smarter product decisions and competitive advantage.

With Dcycle, consumer brands can control their information, reduce compliance costs, automate reporting, win retail partnerships and guarantee complete traceability of their product sustainability claims.

In a market where transparency determines market access, our proposition is simple: make product sustainability work as a real engine for growth.

Frequently Asked Questions (FAQs)

What should I prioritise when implementing CSRD for consumer products?

When implementing CSRD in consumer products, prioritise three core elements: product-level data infrastructure, value chain traceability and claims substantiation.

Product-level infrastructure means structuring ESG data around your BOM, formulations and specifications. Every product must have traceable sustainability attributes that can be aggregated to corporate reporting.

Value chain traceability is non-negotiable for consumer brands. Your impacts and risks live in supplier factories, raw material farms and packaging production. Build supplier engagement programmes with clear data requirements by tier.

Claims substantiation protects you from anti-greenwashing enforcement. Every sustainability statement about your products must be backed by CSRD-quality data and recognised methodology.

Also ensure your solution integrates with PLM, procurement and quality systems, supports recognised calculation standards (ISO 14067, PEF) and can generate both regulatory reports and customer-specific data exports.

What are the main challenges for consumer brands under CSRD?

The main challenges are:

Product portfolio complexity: Different product categories have completely different hotspots and data needs. Fashion data models don't work for food or cosmetics.

Multi-tier supply chain opacity: Visibility beyond tier 1 suppliers is limited, especially for raw materials (agriculture, chemistry, textiles). Tracing palm oil to plantation or cotton to farm is complex.

Data fragmentation: Product data lives in PLM, formulation systems, packaging specs, supplier portals, quality databases and marketing systems without integration.

Scope 3 dominance: For most consumer brands, 80-95% of impact is Scope 3 (raw materials, manufacturing, transport, use, disposal). Corporate operations are negligible.

Regulatory convergence: CSRD overlaps with PPWR, EUDR, ESPR/DPP, anti-greenwashing and CSDDD. You need one integrated system, not five separate compliance projects.

Claims and communication risks: Marketing and sustainability must align. Unsubstantiated claims create legal exposure.

How does CSRD differ between EU and UK consumer brands?

EU consumer brands must comply with CSRD and ESRS, which require double materiality, detailed value chain disclosures and external audit. They also face product-specific regulations (PPWR, EUDR, ESPR) that feed into CSRD.

UK consumer brands follow TCFD for climate (already mandatory for large companies since 2022) and will likely adopt IFRS S1/S2 standards focused on financial materiality and investor decision-usefulness.

The practical difference: CSRD is more comprehensive (covering full ESG scope) and more product-granular (expects value chain detail), while UK standards focus on climate and financial risks.

However, UK brands selling into EU face CSRD indirectly: EU retailers and distributors will demand product-level ESG data for their own CSRD reporting. Product regulations (PPWR, EUDR) also apply to products sold in EU regardless of company domicile.

Smart UK brands build CSRD-compatible systems even if not legally obligated, because market access demands it.

Can small consumer brands benefit from CSRD preparation even if not required?

Absolutely. Even if you're below the mandatory thresholds, building a CSRD-aligned product sustainability system delivers concrete benefits:

Retail requirements: Major retailers increasingly require product-level ESG data as condition of listing. Having robust, verified data positions you as a preferred supplier and protects shelf space.

Consumer trust: Conscious consumers demand transparency. Verified sustainability data (not just marketing claims) builds brand loyalty and justifies premium pricing.

Regulatory readiness: Even if CSRD doesn't apply today, product regulations (PPWR, EUDR, anti-greenwashing) do apply. The same data infrastructure serves both.

Innovation efficiency: Measuring product footprints reveals hotspots and improvement opportunities. Brands that measure early can innovate faster (lighter packaging, better materials, cleaner processes).

Investor and finance access: ESG performance increasingly determines access to growth capital and favourable financing terms.

The investment in product-level ESG infrastructure pays dividends whether or not CSRD compliance is mandatory.

How long does it take to implement a CSRD-ready system for consumer products?

For a typical consumer brand, a realistic timeline is:

90 days for minimum viable system: Materiality assessment, hotspot analysis for top product categories, BOM data structure defined, key suppliers identified, packaging database started, controls framework documented.

6-12 months for full implementation: Product-level data for major SKUs, supplier engagement programme launched, Scope 3 methodology documented, packaging compliance tracking (PPWR), traceability for high-risk materials (EUDR), evidence management, first complete CSRD report with identified gaps.

Ongoing evolution: Product sustainability is not a one-time project. Expect continuous portfolio expansion (new products, formula changes), supplier coverage improvement, methodology refinement and adaptation to evolving regulations.

The key is to start with a solid foundation – clear materiality by product category, BOM-centric data model, supplier segmentation strategy, integration with PLM/procurement and the right technology platform.

With the right approach and the right tools, CSRD compliance becomes a manageable process that strengthens your brand and products rather than burdening them. In consumer goods, the brands that master product-level sustainability data will win the shelf space and consumer trust of tomorrow.

The Convergence of CSRD with Product Regulations

Here's a critical insight for consumer brands: CSRD doesn't exist in isolation. It converges with multiple product-specific regulations that create a unified compliance landscape.

Key Regulatory Convergences:

Packaging and Packaging Waste Regulation (PPWR)

• Sets mandatory targets for recyclable packaging, recycled content, reusability
• Creates data requirements that feed directly into ESRS E5 (circular economy)
• Requires proof of compliance with design requirements

EU Deforestation Regulation (EUDR)

• Mandates traceability and due diligence for deforestation-risk commodities (coffee, cocoa, palm oil, soy, cattle, rubber, wood)
• Creates geo-location data requirements for sourcing
• Due diligence processes feed into ESRS reporting on biodiversity and value chain

Ecodesign for Sustainable Products Regulation (ESPR) and Digital Product Passports (DPP)

• Will require digital documentation of product sustainability attributes
• Creates a "single source of truth" for product environmental data
• DPP data structure can serve as foundation for CSRD product metrics

Empowering Consumers Directive (Anti-Greenwashing)

• Restricts unsubstantiated environmental claims
• Requires proof for sustainability statements on products
• Makes CSRD-quality data essential for marketing and labelling

Corporate Sustainability Due Diligence Directive (CSDDD)

• Requires identification and mitigation of adverse impacts in value chain
• Focuses on human rights and environmental harm prevention
• Due diligence processes provide data for CSRD S2 (value chain workers) reporting

The smart strategy: build one integrated data system that serves CSRD, PPWR, EUDR, DPP and claims substantiation simultaneously.

Common Pitfalls and How to Avoid Them

Many consumer brands stumble during CSRD implementation. Here are the most common mistakes and how to prevent them:

Mistake 1: Treating CSRD as a "Sustainability Report"

The problem: Companies assign CSRD to the sustainability team without involving R&D, Quality, Procurement or Finance.

Why it fails: CSRD requires product-level data that lives in formulation systems, BOMs, supplier contracts and quality specs. Sustainability teams can't access or validate this data alone.

Solution: Establish a cross-functional CSRD programme led jointly by Sustainability and Finance, with active participation from R&D, Quality and Procurement. Make it clear this is regulatory compliance, not a CSR initiative.

Mistake 2: Corporate Aggregates Without Product Granularity

The problem: Companies report corporate totals for emissions, packaging, water without product-level detail.

Why it fails: You can't demonstrate improvement, identify hotspots, respond to customer queries or substantiate product claims without granular data. Auditors will challenge aggregates without traceable foundations.

Solution: Build your data model at product/SKU level from day one. Aggregate up to corporate for CSRD reporting, but maintain granular data for operational management, innovation and customer requirements.

Mistake 3: Underestimating Scope 3 Complexity

The problem: Brands assume they can quickly get primary data from all suppliers, especially in tier 2 and tier 3.

Why it fails: Smallholder farmers, textile mills in developing countries, and ingredient processors often lack ESG data systems. Demanding too much too fast damages relationships without improving data quality.

Solution: Implement a data quality hierarchy:

• Level A (primary supplier-specific): Actual data from strategic suppliers (top 20% by value/impact)
• Level B (modelled with local factors): Activity data plus regional emission/water factors
• Level C (secondary/database): Industry averages from LCA databases (ecoinvent, Agribalyse, etc.)

Document coverage, methodology and multi-year improvement plan.

Mistake 4: Disconnected Data Systems

The problem: ESG data lives separately from product development, quality, procurement and financial systems.

Why it fails: Data becomes outdated when recipes change, suppliers switch, or packaging is redesigned. No one knows the "current" data. Reconciliation is impossible.

Solution: Integrate ESG attributes into your master data management:

• PLM systems hold BOM with sustainability attributes
• Procurement systems track supplier ESG status
• Quality systems capture certifications and test results
• ERP connects sales/production to calculate intensities
• ESG platform consolidates, validates and reports

Mistake 5: Weak Claims Substantiation

The problem: Marketing makes sustainability claims that aren't backed by CSRD-quality data and methodology.

Why it fails: Anti-greenwashing enforcement is increasing. Unsubstantiated claims create legal risk, consumer backlash and regulatory penalties.

Solution: Establish a claims governance process:

• Every sustainability claim must be supported by auditable data
• Methodology must align with recognised standards (ISO 14067 for carbon, PEF for multi-impact)
• Internal review before external communication
• Regular refresh of supporting data