Sustainability & Compliance 5 June 2026 · 8 min read

CSRD & ESRS E1: What Carbon Reporting Now Means for Importers

The Corporate Sustainability Reporting Directive is not just a disclosure exercise. For European importers, the climate standard (ESRS E1) demands emissions data that lives primarily outside your four walls: in your suppliers' factories, on the ocean, and in the trucks carrying your goods across borders. Getting that data right, and getting it audit-ready, is the operational challenge.

What CSRD is and who it covers

The Corporate Sustainability Reporting Directive (CSRD) replaces the earlier Non-Financial Reporting Directive (NFRD) and substantially expands both the scope of companies required to report and the depth of what must be disclosed. The directive is being phased in across several waves, starting with large listed companies and large public-interest entities and extending progressively to large non-listed companies and eventually to listed SMEs.

The size thresholds for the "large company" category are broadly: more than 250 employees, more than €40 million in net turnover, or more than €20 million on the balance sheet, with companies meeting two of the three thresholds in scope. Importantly, thresholds and timelines are subject to ongoing EU legislative adjustments. Companies should verify their exact phase-in date against the current directive text and applicable national transpositions. Nothing in this article is legal or compliance advice.

The practical effect is that a significant portion of medium-to-large European importers will be in scope within the next few years, either directly, or as material suppliers to an entity that is already reporting.

ESRS E1: the climate standard

CSRD reports are structured around the European Sustainability Reporting Standards (ESRS). The climate standard (ESRS E1) covers climate change mitigation, climate change adaptation, and energy use. For most importers, the mitigation disclosures are the operative ones: they require a breakdown of greenhouse gas emissions across Scope 1, Scope 2, and Scope 3, a climate transition plan, and disclosure of physical and transition climate risks assessed through a double materiality lens.

Double materiality: both directions count

ESRS uses a double materiality framework. This means you assess two things simultaneously: how climate issues create financial risks or opportunities for your business (financial materiality, or "outside-in"), and how your business activities contribute to climate change (impact materiality, or "inside-out"). If either direction is material, the topic must be reported. For most importers trading in physical goods, climate will be material on the impact side almost by definition: the carbon footprint of imported goods and their transport is real and measurable. Claiming it is not material requires a documented and auditable justification.

The three scopes, and why Scope 3 is the hard one

The GHG Protocol's three-scope framework underpins ESRS E1's emissions disclosures:

Scope 1 covers direct emissions from sources you own or control: combustion in your own facilities, owned vehicles, refrigerant leaks. For pure importers without manufacturing, this is often a small number.
Scope 2 covers indirect emissions from purchased electricity, heat, steam, or cooling. Calculable from utility bills and grid emission factors. Manageable once you have a system.
Scope 3 covers all other indirect emissions across the value chain, both upstream (your suppliers, the manufacturing of what you buy, the transport to get goods to you) and downstream (customer use, end-of-life). For importers, the upstream categories dominate.

For a typical European importer, Scope 3 represents the vast majority of total emissions. ESRS E1 does not require Scope 3 disclosure in all cases. It depends on the outcome of the materiality assessment. Where upstream transport and purchased goods are a primary activity, materiality is difficult to argue away.

The Scope 3 categories that matter most for importers

Category 1 (purchased goods and services) captures the emissions embedded in the goods you buy, including the manufacturing, raw material extraction, and processing that happened before the product arrived at your supplier's door. Category 4 (upstream transportation and distribution) captures the emissions from moving goods to you: ocean freight, air freight, port handling, inland trucking. These two categories, for most importers, account for the bulk of reported Scope 3 emissions.

Category 1 data is the most difficult to obtain. Supplier-specific primary data (actual energy consumption and process emissions at the manufacturing facility) is the gold standard under ESRS. In practice, most suppliers, especially in Asia, cannot provide this data in a structured format. The fallback is spend-based or activity-based estimation using published emission factors (DEFRA, ecoinvent, industry databases). These produce defensible estimates but not primary data, and ESRS expects a clear disclosure of methodology and data quality.

What data you actually need

Building a defensible ESRS E1 disclosure requires assembling data from several sources:

ESRS E1 data requirements for importers

Scope 1: facility combustion, owned fleet, refrigerantsUtility invoices, fleet data, maintenance logs

Scope 2: purchased electricity & heatUtility invoices + grid emission factors by location

Scope 3 Cat. 1: purchased goods (manufacturing emissions)Supplier data or spend/activity × emission factors

Scope 3 Cat. 4: upstream transport & distributionShipment records: weight, distance, mode, load factor

Emission factorsPer mode/carrier; DEFRA, ecoinvent, GLEC Framework

Audit trailSource documents, methodology notes, version control

The transport emissions calculation (Category 4) is where trade and logistics data becomes directly relevant. To estimate freight emissions accurately, you need shipment-level records: the weight or volume shipped, the origin and destination, the transport mode (ocean, air, road, rail), and ideally the load factor or container fill rate. Aggregate estimates based on "we imported roughly X tonnes last year" produce numbers with wide uncertainty bands that will not survive third-party limited assurance review, which CSRD mandates from 2026 for the larger cohorts.

Why spreadsheets break and audit-readiness matters

A spreadsheet can produce an emissions number. What it cannot produce is an audit trail. CSRD requires limited assurance from an accredited third-party auditor on sustainability information, the same auditor or a qualified sustainability auditor. That auditor will ask: what is the source for each data point, what methodology was applied, how were emission factors selected, and how were changes in scope or methodology handled year-on-year.

A spreadsheet that lives on someone's laptop, built with emission factors copied from a 2021 DEFRA file, with totals pasted from three different exports, is not audit-ready. The audit trail requirement means that the calculation process itself must be documented and reproducible. That is a systems requirement, not a reporting one.

The further problem is that the data for Scope 3 Category 4 (upstream transport emissions) is scattered across customs declarations, carrier invoices, freight forwarder reports, and booking systems. None of these were designed to feed an emissions calculation. Pulling them together manually once a year, reconciling against what was actually shipped, and normalising across modes and carriers is a substantial data management task. Doing it accurately enough to satisfy an auditor is harder still.

Connecting emissions to trade data

The most defensible transport emissions calculation is one built from actual shipment records rather than estimated aggregate activity. When your freight data (shipment weight, route, mode, carrier) is already structured for trade and cost analysis (as it would be in a system designed around true landed cost for importers), it is a short step to apply GLEC-Framework-aligned emission factors to each shipment and roll up to an annual Scope 3 Category 4 figure with full lineage.

The same logic applies to CBAM. If you are already tracking embedded emissions for CBAM compliance, that data can inform ESRS E1 Category 1 estimates for the covered product categories. The two regulatory regimes (CBAM and CSRD) draw on overlapping data, but are managed in separate compliance silos in most companies today. Integrating them is not just an efficiency gain; it reduces the risk of inconsistent numbers in different regulatory submissions. See also the Orca Glossary for definitions of key terms.

What to do now

The immediate practical step for importers approaching CSRD in-scope status is a data inventory: what trade, transport, and supplier data do you currently have, in what format, and with what level of granularity? That assessment determines whether you can produce a defensible Category 4 calculation from existing records or whether you need to start capturing shipment data more systematically.

The second step is a methodology decision: will you use spend-based, activity-based, or hybrid approaches for Category 1, and which emission factor databases will you rely on? These choices should be documented and applied consistently, because ESRS requires year-on-year comparability and disclosure of any methodology changes.

The goal is not a perfect number. It is a documented, reproducible, and improving one, grounded in real trade data rather than back-of-envelope estimates, and capable of withstanding the scrutiny of limited assurance review.

Build audit-ready carbon reporting from your trade data

Orca Carbon links shipment-level trade records to GLEC-aligned emission factors, producing Scope 3 Category 4 calculations with full lineage, ready for ESRS E1 disclosure and third-party assurance review.

Open Orca Carbon Talk to the founders

Frequently asked questions

Which companies are covered by CSRD and when?

CSRD is being phased in across several waves. Large listed companies and large public-interest entities were first, followed by large non-listed companies meeting two of three size thresholds (250+ employees, €40m+ turnover, €20m+ balance sheet). Listed SMEs and non-EU companies with significant EU revenues have later phase-in dates. Thresholds and timelines are subject to ongoing EU legislative review, so companies should check the current directive text and national transpositions. This article is not legal advice.

What is ESRS E1 and why does it matter for importers?

ESRS E1 is the European Sustainability Reporting Standard covering climate change. It requires disclosure of Scope 1, Scope 2, and material Scope 3 emissions, climate transition plans, and physical climate risks. For importers, Scope 3 Category 1 (purchased goods and services) and Category 4 (upstream transportation and distribution) are typically the largest emission sources, meaning that imported goods and their freight are usually where the majority of emissions sit.

What does double materiality mean in practice?

Double materiality means you assess both how climate issues affect your business (financial materiality) and how your business affects the climate (impact materiality). For importers, this typically means considering how carbon pricing, supply disruption, and regulatory change affect financial performance, and also how the carbon footprint of your imports contributes to climate impact. If either dimension is material, it must be reported. You cannot exclude climate on the basis that only one direction of the assessment is relevant.

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