Knowledge & Insights about Environmental Impact & Carbon Management | Carbmee

Visit the Carbmee Knowledge Hub for blogs, whitepapers, events, and webinars on carbon management and environmental reporting.

Explore a curated selection of our resources designed to empower your journey toward sustainable transformation, from insightful blogs and thought-leading webinars to in-depth whitepapers and in-person events.

Expertise to drive sustainable transformation

The evolving landscape of environmental regulations and corporate responsibility is rapidly transforming carbon emissions from an externality into a tangible cost factor. Through mechanisms such as carbon taxes, border carbon adjustment mechanisms (CBAM), and internally implemented carbon pricing strategies, organizations are increasingly facing direct financial implications tied to their greenhouse gas footprint. 

This fundamental shift necessitates a paradigm change in how businesses approach environmental sustainability. It is no longer sufficient to treat emissions as a separate operational concern; rather, organizations must strategically integrate the modeling of their emissions data alongside core financial data. This holistic approach empowers businesses to make risk-aware and cost-efficient decisions, driving both financial success and environmental stewardship. 

By understanding the financial implications of their carbon footprint, companies can proactively mitigate risks, identify opportunities for cost reduction through emissions abatement, and ultimately enhance their long-term resilience and competitiveness in a carbon-constrained world.

To effectively link emissions to financial strategy, organizations must establish clear and measurable metrics that bridge the gap between environmental impact and economic performance. Key metrics to consider include:

A self-imposed cost on carbon emissions generated by an organization's internal operations. This price can be used for internal decision-making, such as evaluating investment opportunities or incentivizing emissions reductions across different departments or business units.

Strategic Significance: Provides a mechanism to internalize the cost of carbon, fostering a culture of emissions awareness and accountability. Enables the evaluation of projects and investments based on their true cost, including their carbon impact. Can drive innovation in low-carbon technologies and processes.

An assessment of the potential financial risks associated with non-compliance with various carbon regulations and reporting requirements in different geographical regions where the organization operates or has value chain activities. This includes analyzing the stringency of regulations, potential penalties, and the likelihood of future regulatory changes.

Strategic Significance: Highlights areas of significant regulatory risk, allowing organizations to prioritize compliance efforts and potentially restructure operations or supply chains to minimize exposure. Informs strategic decisions regarding market entry and expansion based on the carbon regulatory landscape.

The cost associated with reducing a specific amount of greenhouse gas emissions through a particular project, technology, or operational change. This metric is typically expressed as cost per ton of CO2 equivalent reduced ($/tCO2e).

Strategic Significance: Enables a comparative analysis of different emissions reduction opportunities, allowing organizations to prioritize the most cost-effective abatement strategies. Crucial for developing carbon reduction targets and pathways that are economically viable. Supports informed decision-making regarding investments in low-carbon technologies.

A modified return on investment calculation that incorporates the financial impact of carbon emissions (e.g., carbon taxes, avoided compliance costs, internal carbon price). This provides a more comprehensive view of a project's profitability by accounting for its environmental performance.

Strategic Significance: Offers a more accurate assessment of the long-term financial viability of projects and investments, particularly those with significant carbon implications. Can reveal hidden costs or benefits associated with emissions that traditional ROI calculations might overlook. Encourages investment in projects with lower carbon footprints and higher overall value.


Metric: Scope 1, 2, and 3 Emissions Tracking

Comprehensive monitoring and reporting of direct emissions from owned or controlled sources (Scope 1), indirect emissions from purchased electricity, heat, or steam (Scope 2), and all other indirect emissions that occur in an organization's value chain (Scope 3).

Strategic Significance: Provides a complete understanding of an organization's carbon footprint, identifying key emission hotspots and areas for targeted reduction efforts. Essential for accurate carbon accounting, reporting to stakeholders, and setting meaningful reduction targets. Forms the foundation for effective carbon pricing strategies.

Defining the Key Metrics for Integrated Carbon-Financial Analysis

Despite the clear strategic importance of integrating carbon pricing with financial strategy, organizations often encounter several hurdles in implementation:

Lack of Integration Between Carbon Pricing and Core Financial Processes: A significant challenge arises when carbon pricing mechanisms are not effectively linked to established financial processes such as procurement decisions, capital expenditure planning, and budgeting cycles. This disconnect can lead to a siloed approach where sustainability initiatives are treated separately from core business operations, limiting their impact and hindering the realization of potential cost savings and risk mitigation.

Difficulty in Accurately Estimating Project ROI with Carbon Factors: Traditional return on investment (ROI) calculations often fail to adequately account for the financial implications of carbon emissions. Estimating the future costs associated with carbon regulations, the potential benefits of emissions reductions (e.g., reduced energy consumption, lower tax liabilities), and the long-term value of investing in low-carbon solutions can be complex and uncertain. This lack of clarity can make it difficult to justify investments in abatement projects or to accurately compare the financial viability of different options.

Absence of Seamless Data Integration Between Financial and Carbon Accounting Systems: Many organizations lack the integrated data infrastructure required to efficiently track, analyze, and report on both financial and carbon-related data in a unified manner. This can lead to manual data reconciliation, increased administrative burden, and a lack of real-time insights into the financial impact of carbon emissions across the value chain. The inability to seamlessly connect these data streams hinders the development of effective carbon pricing strategies and the ability to make data-driven decisions.

Limited Understanding and Buy-in Across Different Departments: Integrating carbon pricing into financial strategy requires collaboration and understanding across various departments, including finance, procurement, operations, and sustainability. However, a lack of awareness or buy-in from key stakeholders can create resistance and impede the implementation process. Finance teams may not fully grasp the materiality of carbon risks, while operational teams may struggle to see the financial benefits of emissions reduction initiatives.

Complexity and Uncertainty of Evolving Carbon Regulations: The global landscape of carbon regulations is constantly evolving, with new policies and reporting requirements emerging at different levels of governance. This complexity and uncertainty can make it challenging for organizations to anticipate future compliance obligations and to accurately assess their long-term carbon-related financial risks. Staying abreast of these changes and translating them into actionable financial insights requires dedicated resources and expertise.

Overcoming Common Implementation Challenges

Effectively integrating carbon considerations into financial decision-making transforms carbon management from a compliance burden into a strategic advantage:

Transforms Carbon into a Tangible Financial Lever: By assigning a financial value to carbon emissions through internal pricing mechanisms or by explicitly accounting for carbon-related costs and revenues in financial analysis, organizations can incentivize emissions reductions and drive more sustainable business practices. This financial lever can influence investment decisions, operational efficiencies, and product development strategies.

Significantly Reduces Compliance Risk and Optimizes Capital Allocation: A deep understanding of carbon regulations and the financial implications of non-compliance allows organizations to proactively manage their regulatory risks. By incorporating carbon costs into financial planning, businesses can make more informed capital allocation decisions, prioritizing investments in projects and technologies that minimize their carbon footprint and reduce future compliance burdens.

Empowers Cost-Effective Emissions Reduction Strategies: By analyzing the abatement costs associated with different emissions reduction opportunities and factoring in the financial benefits (e.g., energy savings, tax incentives, revenue from low-carbon products), organizations can identify and implement the most cost-effective pathways to achieve their emission reduction targets. This data-driven approach ensures that sustainability goals are pursued in a fiscally responsible manner.

Enhances Stakeholder Engagement and Attracts Sustainable Finance: Integrating carbon performance with financial results demonstrates a commitment to sustainability and transparency, which can enhance engagement with investors, customers, employees, and other stakeholders who are increasingly prioritizing environmental considerations. Furthermore, strong carbon management practices can improve access to sustainable finance options, such as green bonds and impact investments.

Fosters Innovation and Creates New Business Opportunities: The focus on reducing carbon emissions can drive innovation in cleaner technologies, more efficient processes, and the development of new low-carbon products and services. By integrating carbon into financial strategy, organizations can identify and capitalize on these emerging business opportunities, creating new revenue streams and enhancing their long-term competitiveness.

The Strategic Imperative of Financial-Carbon Integration

Carbmee provides a powerful platform for bridging the gap between carbon emissions and financial strategy through its custom properties. Organizations can leverage fields such as:

Internal Carbon Price: Directly integrate the internally defined cost of carbon into procurement and operational data, allowing for real-time analysis of the carbon-adjusted cost of goods and services.

Abatement Cost: Track and analyze the cost-effectiveness of various emissions reduction initiatives at a granular level, informing investment decisions and prioritization of abatement projects.

Compliance Risk Score: Quantify and monitor the level of risk associated with different carbon regulations across the value chain, enabling proactive risk mitigation strategies and resource allocation for compliance efforts.

Carbon-Adjusted ROI: Calculate a more comprehensive return on investment for projects by incorporating the financial impact of their carbon emissions, providing a clearer picture of long-term value creation.

Lifecycle Emissions Data: Integrate comprehensive lifecycle assessment data into financial models to understand the full carbon impact of products and services, supporting informed sourcing and product design decisions.

Harnessing Carbmee’s Custom Properties for Integrated Insights

Define internal carbon price and compliance exposure by region

Assign carbon pricing fields to procurement, projects, and suppliers

Link emissions impact to cost and ROI fields

Run abatement scenario models to prioritize high-impact initiatives

Book a demo to align emissions and capital allocation.

How to Start Embedding Carbon into Financial Strategy

Get insights into how carbon pricing is transforming enterprise decision-making in the Sustainability Intelligence Report 2025.

Carbon pricing is not a future issue, it’s a present business variable. With Carbmee, you can:

Integrate carbon into investment and procurement workflows

De-risk your operations and align with global reporting mandates

Carbon is now financial. Plan for it accordingly—Carbmee is ready to help.

Download the Sustainability Intelligence Report 2025

Carbon Pricing & Financial Strategy: Link Emissions and ROI | Carbmee

Learn how to model carbon pricing into procurement, CapEx, and ROI strategy to align sustainability and financial goals with Carbmee.

Carbon Pricing in Practice: Integrating Emissions into Financial Strategy for Enhanced Business Performance

In an era where environmental responsibility is crucial, most companies commit to reduction targets, yet do not know how to actually tackle their Scope 3 emissions. Measuring, reporting, and reducing Scope 3 emissions is both a completely new and highly complex challenge. Supply chain decarbonization is still in its early stages and there is an escalating demand for solutions. 89% of companies are using or currently searching for a Scope 3 digital solution, meaning they want to manage their emissions with software, not with service providers.

carbmee is a recognized vendor of carbon management software with a strong commitment to developing and providing a software solution that will empower companies to get their carbon under management. It is carbmee's vision to drive the sustainable transformation of businesses with environmental intelligence to achieve net-zero by 2050. Therefore, it comes as no surprise that carbmee is incorporating all technological advancements to stay at the forefront of carbon management innovation. 

Whatever technological possibilities exist, carbmee will incorporate the latest innovations into the software, constantly improving the product and using every tool available to empower companies to achieve net zero. While specifically focusing on improving sustainability, carbmee is among other technological start-ups that aim to revolutionize supply chain management with AI.

carbmee´s cutting-edge software enables businesses to measure, reduce, and report emissions in their supply chain with unparalleled accuracy and efficiency. Through advanced data matching techniques with generative AI, carbmee is able to provide granular emission data for massive amounts of data at speed, ensuring precise tracking and management of carbon footprints.

Tackling Scope 3 emissions with intelligent software solutions

carbmee has integrated Gen AI into its carbon accounting software to revolutionize how businesses manage their emissions. Here’s how carbmee stands out:

Gen AI enables carbmee to match customer data with emission data from comprehensive databases such as Ecoinvent. This process ensures that emission data is highly accurate and specific to each item, providing businesses with detailed insights into their carbon footprint.

A key aspect of carbmee’s approach is to focus on excelling at data matching and modeling processes while relying on strong partners like ecoinvent to provide the best emission data. With this clear objective, carbmee´s software solution outperforms in data matching, delivering highly accurate footprint calculations. Gen AI-driven data matching enables companies to measure, report, and reduce their emissions as efficiently and effectively as possible.

Generative AI can handle vast amounts of data efficiently, making it suitable for big data applications. By using generative AI, big bulks of data can be processed efficiently in carbmee EIS™,  enabling the system to provide granular emission data for all items in the supply chain. It is only with this level of detail and granularity that businesses can meet stringent sustainability targets and regulatory requirements.

GenAI models understand the context around data points, leading to more accurate matches. The precision of generative AI in data matching leads to highly accurate emission reports. This accuracy helps companies make informed decisions about their supply chain operations, ultimately contributing to more effective carbon reduction strategies.

Tracking Scope 3 emissions presents several challenges, including inconsistent data sources, varying emission factors, and a lack of standardized methodologies. carbmee’s generative AI addresses these issues by providing:

Consistent Data Integration: carbmee´s incorporated AI ensures seamless integration of data from multiple sources, maintaining consistency and accuracy.

Standardized Emission Factors: Using comprehensive databases like EcoInvent, carbmee standardizes emission factors across the supply chain.

Real-Time Data Insights: The speed of Gen AI data processing and its processing power to handle massive amounts of data, leads to real-time data insights in carbmee EIS™. It enables companies to make timely decision-making.

Overcoming Challenges in Scope 3 Emissions Tracking

carbmee’s innovative use of generative AI in its carbon management software marks a significant advancement in the fight against climate change. By ensuring accurate, granular emission data, carbmee empowers businesses to take effective action towards reducing their carbon footprints. As the world moves towards stricter environmental regulations and greater sustainability demands, technologies like generative AI will be crucial in achieving these goals. 

The integration of generative AI into carbon accounting is just the beginning. As AI technology evolves, its applications in sustainability will expand, offering new ways to optimize supply chains and reduce emissions. Exciting AI-powered developments in carbmee EIS™ for analysis, forecasts, and scenario modeling are in the making already - stay tuned.

Leading the sustainability transformation with AI-powered climate tech

The complexity of tracking Scope 3 emissions requires powerful solutions. Gen AI significantly contributes to achieving emission data precision and reliability. Learn how Gen AI fuels data matching in carbmee EIS™.

Gen AI Enhances Scope 3 Emissions Tracking with carbmee EIS™

Discover how carbmee uses Generative AI for precise Scope 3 emissions tracking. Learn about enhanced data matching and accuracy for supply chain decarbonization.

Leveraging Generative AI for Supply Chain Decarbonization with carbmee EIS™

Sustainability is no longer just a corporate aspiration—it’s a business imperative. But as the Sustainability Intelligence Report 2025 by Carbmee reveals, a striking gap remains between corporate sustainability commitments and the ability to operationalize them effectively. Businesses worldwide are facing increasing pressure from regulators, investors, and consumers to take action, but many still struggle with execution due to data limitations, technological barriers, and financial constraints.

According to Carbmee’s research, 67% of organizations rate their sustainability commitment as high or very high. However, 47% struggle due to a lack of clear data and technology, and 28% cite insufficient digital infrastructure as a major obstacle. The challenge lies not in setting ambitious targets but in implementing effective strategies to meet them.

A recent McKinsey & Company report echoes this concern, highlighting that while 83% of C-suite executives recognize sustainability as a value driver, only 33% believe their organizations have the data and tools to measure and execute sustainable initiatives effectively.

Additionally, a 2024 Gartner survey found that 42% of organizations lack the expertise to integrate sustainability into their business strategy effectively, underscoring the importance of investing in digital tools and sustainability training. (Source)

Governments and regulatory bodies worldwide are intensifying environmental policies. According to Carbmee’s report, 58% of organizations cite regulatory pressure as a primary driver for sustainability action. The European Union’s Carbon Border Adjustment Mechanism (CBAM) and the U.S. Securities and Exchange Commission (SEC)’s proposed climate disclosure rules are forcing businesses to become more transparent in reporting emissions and supply chain sustainability.

A recent PwC study found that 79% of investors demand increased climate risk disclosure, reinforcing the need for companies to align with emerging regulations.

Discover how leading companies are overcoming these challenges and turning sustainability into a competitive advantage. Download the Sustainability Intelligence Report 2025.

The Sustainability Intelligence Report 2025 

Download Today: The Sustainability Intelligence Report 2025 

Technology is rapidly emerging as a solution to bridge the gap between commitment and execution. Carbmee’s research highlights that 50% of organizations prioritize supply chain transparency platforms, and 41% view carbon management tools as critical to their sustainability goals.

Artificial Intelligence (AI) plays a pivotal role in this transformation. AI-driven tools can:

Enhance emissions tracking: AI enables real-time carbon footprint measurement, ensuring more accurate sustainability reporting.

Improve supply chain transparency: By leveraging predictive analytics, businesses can mitigate risks and identify sustainable sourcing opportunities.

Optimize energy and resource management: AI models help companies analyze energy consumption patterns, reducing waste and improving efficiency.

A Gartner report predicts that by 2027, 60% of companies will use AI-driven sustainability tools to meet compliance and efficiency demands. 

Beyond compliance, sustainability presents a significant financial opportunity. Carbmee’s study found that 36% of organizations recognize cost savings as a key motivator, while 45% view sustainability as a competitive advantage. Research by Deloitte supports this, showing that companies integrating sustainability into their core business strategy experience higher long-term profitability and increased customer loyalty.

Furthermore, a CDP report found that businesses investing in decarbonization initiatives saw an average ROI of 27% over five years. This suggests that sustainability efforts are not just ethical imperatives but also strong financial strategies.

Sustainability is a growing concern for businesses, but procurement teams face unique challenges in balancing cost efficiency with environmental goals. As highlighted in the Sustainability Intelligence Report 2025, 60% of organizations cite financial constraints as the biggest hurdle, while 47% lack clear data and 32% lack sufficient technology to implement effective sustainability initiatives.

The procurement sector, traditionally focused on cost and quality management, is now being called upon to drive sustainability in sourcing and supplier relationships. However, many procurement leaders are asking, “Where do we get the data, and how can we use it to advance sustainability?”

The collaboration between Carbmee and JAGGAER provides a solution. By integrating sustainability data into procurement workflows, organizations can align cost-saving strategies with climate action:

Enrich spend analytics with ESG-related data, including greenhouse gas emissions and supply chain risk assessments.

Define sourcing strategies that prioritize suppliers with lower carbon footprints.

Enhance supply chain visibility, addressing the 53% of organizations that identified supply chain complexity as a challenge.

Automate compliance and reporting, ensuring that sustainability goals are factored into procurement decisions from the outset.

By integrating JAGGAER’s source-to-pay technology with Carbmee’s carbon management solutions, companies can measure and communicate product carbon footprints, manage Scope 3 emissions, and establish net-zero supply chain strategies.

Expert Insights: Procurement’s Role in Sustainability

Join us for an exclusive Carbmee - JAGGAER webinar walkthrough of the Sustainability Intelligence Report 2025, where we unpack the biggest gaps between ambition and action, and explore how leading companies are leveraging AI, regulation, and ROI to drive real progress.


Don’t miss the chance to learn how industry leaders are turning sustainability into a strategic advantage. Save your spot & get early access to the full report!

Webinar: Walkthrough the Sustainability Intelligence Report 2025 

Organizations can no longer afford to delay sustainability implementation. To bridge the action gap, companies must:

Invest in Data & AI Solutions: Advanced analytics and AI-driven platforms can transform sustainability goals into measurable actions.

Align Sustainability with Business Strategy: Prioritizing sustainability within financial and operational decision-making ensures long-term impact.

Stay Ahead of Regulatory Changes: Proactively adapting to emerging environmental policies reduces compliance risks and enhances brand credibility.

Enhance Cross-Department Collaboration: Sustainability should not be siloed in corporate social responsibility (CSR) teams. Procurement, finance, operations, and supply chain management all play crucial roles.

Educate and Train Employees: Companies that invest in sustainability literacy see higher engagement and better execution of ESG strategies.

Bridging the Gap: Next Steps for Businesses

The sustainability transformation is underway, but the gap between commitment and execution remains a critical challenge. With AI-powered technology and stringent climate regulations reshaping corporate priorities, businesses that embrace data-driven sustainability strategies will gain a competitive edge.

Sustainability is not just about compliance—it is about long-term value creation, risk mitigation, and future-proofing businesses against climate challenges. Companies that take proactive steps now will position themselves as leaders in the transition to a low-carbon economy.

To gain deeper insights and actionable strategies, download the full Sustainability Intelligence Report 2025.

Closing the Sustainability Action Gap

How AI and Climate Legislation Are Shaping the Net-Zero Future

Closing the Sustainability Action Gap: How AI and Climate Legislation Are Shaping the Net-Zero Future

The Carbon Border Adjustment Mechanism (CBAM) is a vital tool in the EU’s fight against climate change, designed to prevent carbon leakage and incentivize global sustainability practices. In our recent webinar, “Leveraging Primary Data for CBAM Reporting in October 2024,” we had a fantastic engagement, with participants asking insightful questions about the CBAM framework, challenges, and best practices.

To help businesses better understand how to navigate CBAM compliance, we’ve compiled the key questions and answers from the webinar below. If you missed the webinar, this Q&A will provide a useful recap.

Primary data plays a crucial role in CBAM reporting because it allows companies to provide accurate and verifiable emissions information. This ensures compliance with CBAM regulations and supports transparency in carbon footprint measurement across supply chains. Companies that rely on primary data can present a more precise picture of their emissions, reducing the risk of penalties or misreporting.


What is the importance of using primary data in CBAM reporting?

Gathering primary data requires direct engagement with suppliers and internal operations to track real-time emissions across production processes. Solutions like carbmee EIS™ can help by automating data collection and providing verified and standardised emissions data, ensuring companies have accurate and compliant reports.

How can companies gather primary data for CBAM reporting?

Data availability: Many suppliers may not have sophisticated systems for tracking emissions.

Data standardization: Different suppliers may report data in various formats, making it difficult to consolidate.

Data verification: Ensuring that the data collected is accurate and reflects the true emissions footprint of the supply chain.

By utilizing tools such as carbmee EIS™, companies can streamline data collection, verification, and standardization to overcome these challenges.

What are the main challenges businesses face when collecting primary data for CBAM reporting?

While primary data offers the most accurate representation of emissions, secondary data, such as industry averages or estimates, is often used when primary data is unavailable. However, secondary data can lead to inaccuracies and potentially higher carbon tariffs under CBAM. Whenever possible, businesses should prioritize primary data collection.

How does secondary data compare with primary data in CBAM reporting?

Yes, automation plays a significant role in simplifying CBAM compliance. Businesses can use software solutions that automate the collection, validation, and reporting of emissions data. This reduces manual work, ensures accuracy, and accelerates compliance. A platform like carbmee EIS™ can automate many of these processes, allowing companies to focus on their core business while staying compliant with CBAM regulations.

Can CBAM compliance be simplified through automation?

The CBAM regulation is being phased in, with full compliance expected by 2026. However, businesses need to start preparing now by setting up data collection mechanisms and ensuring that they can meet reporting requirements by the start of the transitional phase in 2025. Leveraging automated data collection solutions early on will help businesses ensure smooth compliance when the deadlines hit.

What is the deadline for companies to comply with CBAM regulations?

Small and medium-sized enterprises (SMEs) often face resource constraints when it comes to CBAM compliance. However, they can mitigate this by:

Leveraging automated tools to gather and report data efficiently.

Collaborating with industry associations that offer guidance on CBAM requirements.

Engaging with suppliers to ensure accurate and consistent data across their supply chains.

For SMEs, automated tools such as carbmee EIS™ can be particularly beneficial in streamlining the CBAM reporting process and reducing the need for large, resource-intensive compliance teams.

How can SMEs handle the complexities of CBAM reporting?

Non-compliance with CBAM can result in penalties, increased tariffs, or exclusion from certain markets. In the long term, failure to comply may damage a company’s reputation, especially as consumers and investors increasingly prioritize sustainability. It is critical for companies to ensure their data collection processes are reliable and that they meet all CBAM reporting requirements to avoid such risks.

What are the consequences of non-compliance with CBAM?

CBAM ensures that companies importing goods into the EU are subject to the same carbon costs as those within the region. This levels the playing field and encourages global players to adopt more sustainable practices. Businesses trading with non-EU countries may need to adjust their supply chains or pricing models to remain competitive.

How does CBAM impact international trade?

Yes, the EU provides various resources and guidelines to help businesses navigate CBAM compliance. In addition, platforms like carbmee EIS™ offer tailored solutions that streamline the data collection and reporting processes, ensuring businesses of all sizes can transition to CBAM compliance efficiently.

Is there support available for companies transitioning to CBAM compliance?

The Carbon Border Adjustment Mechanism represents a significant shift in global trade dynamics, emphasizing the need for accurate emissions reporting and the use of primary data. As demonstrated in our recent webinar, businesses are eager to learn how to leverage technology and best practices to meet CBAM requirements. carbmee EIS™ provides a robust solution to streamline this process, ensuring full compliance with minimal effort.

For more insights on how you can optimize your CBAM compliance process, stay tuned to our blog or contact us at carbmee for tailored solutions.

If you missed the webinar and want more in-depth knowledge about CBAM reporting, watch the full recording about CBAM reporting here or contact our team for personalized advice on your CBAM journey. Learn more about how carbmee EIS™ can help your business achieve complete CBAM compliance here.

Leveraging Primary Data for CBAM Reporting – Carbmee Webinar

To help businesses better understand how to navigate CBAM compliance, we’ve compiled the key questions and answers.

Leveraging Primary Data for CBAM Reporting: Q&A from Our Webinar

The European Sustainability Reporting Standards (ESRS) define how companies must report on sustainability under the EU’s Corporate Sustainability Reporting Directive (CSRD). They transform Environment, Social and Governance (ESG) reporting from a voluntary practice into a structured, comparable, and enforceable reporting framework across the EU.

ESRS are a set of mandatory sustainability reporting standards developed by EFRAG (European Financial Reporting Advisory Group) for companies in scope of the CSRD. They specify what information must be disclosed across four categories: general, environmental, social, and governance. This includes metrics, targets, policies, and transition plans. Unlike voluntary frameworks, ESRS is legally binding and subject to external assurance.

Currently, the standards are sector-agnostic, meaning they can be applied by companies across all industries. While primarily designed for EU-based businesses, some non-EU companies with operations in the EU will also need to comply as CSRD implementation progresses, giving ESRS a broad geographic and organizational reach.

The primary purpose of ESRS is to improve the consistency, comparability, and reliability of sustainability information. By introducing standardized disclosures and a double materiality approach, ESRS enables investors, regulators, and other stakeholders to better assess both a company’s impacts on society and the environment, and the financial risks and opportunities arising from sustainability issues.

ESRS plays a central role in supporting the EU Green Deal’s objective of achieving a climate-neutral economy by 2050. By requiring companies to disclose how sustainability considerations are embedded in strategy, governance, and operations, ESRS helps align corporate behavior with EU climate and environmental goals and directs capital toward activities that support the green transition.

CSRD and ESRS are closely linked but serve different roles within the EU’s sustainability reporting framework. Understanding how they work together helps companies navigate their legal obligations and reporting requirements more efficiently.

The Corporate Sustainability Reporting Directive (CSRD) is the EU law that defines who must report sustainability information, when they must report, and under what legal obligations. It significantly expands the scope of mandatory sustainability reporting and introduces assurance requirements. Companies can leverage practical tools and guidance to implement CSRD effectively, including solutions for managing data and preparing audit-ready disclosures.

What is the Corporate Sustainability Reporting Directive (CSRD)?

ESRS compliance applies to a growing number of companies under the Corporate Sustainability Reporting Directive (CSRD). Understanding which organizations fall under the scope is crucial for planning reporting processes, collecting relevant data, and ensuring timely compliance.

All large EU companies that meet at least two of the following criteria: over 250 employees, more than €50 million in net turnover, or more than €25 million in total assets are required to comply with ESRS. This includes listed companies and public-interest entities, which must report detailed sustainability information across environmental, social, and governance dimensions.

Non-EU companies with significant operations in the EU, such as subsidiaries generating over €150 million in net turnover within the bloc, will also need to follow ESRS standards as from financial year 2028. These organizations must assess their EU activities against the reporting requirements, ensuring consistency with EU sustainability expectations as CSRD phases in for international businesses.

As of January 2026, ESRS reporting for large companies is already in effect. Listed SMEs and other small entities impacted by the CSRD have to start off their reporting obligations. The first financial year for listed SMEs to report under ESRS begins in 2026, with disclosures due in 2027. However, they may still opt to postpone reporting until 2028.

Meanwhile, sector-specific ESRS for industries with high carbon footprints such as mining, oil and gas, transportation, and finance are under development. These were originally delayed and are now expected to be finalized around mid-2026. Until then, all companies continue to follow the sector-agnostic ESRS, which applies broadly across industries.

In addition, EFRAG has introduced a voluntary ESRS framework for SMEs not covered under CSRD. This allows smaller companies to adopt early reporting practices, align with partner or investor expectations, and prepare for eventual mandatory compliance.

Upcoming changes for SMEs and sector-specific standards

These are the 12 standards that comprise the ESRS:

General

ESRS 1: General Requirements — Sets out the general principles for preparing and presenting sustainability statements under the CSRD. This standard forms the base on which the other standards are built.

ESRS 2: General Disclosures — Specifies general disclosure requirements that apply across all sustainability matters and provides a structure for how companies should disclose general information.


ESRS E1: Climate Change — Defines requirements for reporting on climate change mitigation and adaptation, including greenhouse emissions, targets, and transition plans.

ESRS E2: Pollution — Covers disclosures related to air, water, and soil pollution, as well as measures taken to prevent and control pollution.

ESRS E3: Water and marine resources — Addresses reporting on water-related impacts including water consumption, discharges, and impacts on marine ecosystems.

ESRS E4: Biodiversity and ecosystems — Specifies requirements for reporting on biodiversity and ecosystem impacts, including measures to conserve and restore biodiversity.

ESRS E5: Resource use and circular economy — Focuses on reporting on resource use, circular economy practices, and waste management.


ESRS S1: Own workforce — Covers reporting on the company’s own workforce, including working conditions, human rights, and equal opportunities.

ESRS S2: Workers in the value chain — Addresses disclosures related to workers in the company’s value chain (e.g., suppliers and business partners).

ESRS S3: Affected communities — Specifies requirements for reporting on impacts on affected communities, including indigenous peoples and local communities.

ESRS S4: Consumers and end-users — Covers disclosures related to the impact of products and services on consumers and end-users, including health and safety.


ESRS G1: Business conduct — Focuses on reporting on governance and business conduct, including ethical behavior, anti-corruption, and responsible lobbying.

ESRS standards cover a wide range of topics across environmental, social, and governance (ESG) areas. 

Environmental standards address climate change mitigation and adaptation, resource use, pollution prevention, circular economy practices, and biodiversity protection. 

Social standards focus on human rights, labor practices, diversity and inclusion, health and safety, and community impacts.

Governance standards require disclosure on corporate structure, business ethics, anti-corruption measures, risk management, and sustainability-related policies and targets.

Together, these standards ensure that companies report a comprehensive view of their sustainability performance, impacts, and strategies, providing stakeholders with transparent and comparable information.

What is covered in environmental, social, and governance standards?

Double materiality is at the heart of the European Sustainability Reporting Standards (ESRS), reflecting the need for companies to consider both financial materiality and impact materiality.

 Double Materiality: The Core of ESRS Reporting

Double materiality recognizes that sustainability reporting must go beyond traditional financial metrics. It combines:

Financial materiality: assessing risks and opportunities that sustainability factors, like climate change or labor practices, pose to the company’s business model and financial performance.

Impact materiality: examining the organization’s effects on the environment, society, and stakeholders.

This approach ensures that companies capture the full spectrum of their sustainability footprint and provide a holistic view to investors, regulators, and the public.

Performing a double materiality assessment involves several steps: identifying potential environmental, social, and governance (ESG) issues relevant to the company; analyzing their impacts on the business and on stakeholders; engaging with internal and external stakeholders; and prioritizing issues based on significance. The process often combines quantitative data, qualitative insights, and scenario analysis to ensure a robust, evidence-based evaluation that supports strategic decision-making and ESRS compliance.

How to perform a double materiality assessment

EFRAG provides extensive guidance and practical tools to help companies implement double materiality in line with ESRS. This includes technical advice, templates, and sector-specific guidance, enabling organizations to assess material issues effectively and align their reporting with regulatory expectations. These resources help ensure that sustainability disclosures are consistent, comparable, and credible, supporting transparent and robust reporting for stakeholders

Reporting under the European Sustainability Reporting Standards (ESRS) can seem complex, but breaking it down into clear steps makes the process manageable. The following guide walks you through the essential stages to ensure compliance and create a comprehensive sustainability report.

Start with a double materiality assessment following EFRAG’s IG 1. This identifies which topical standards apply to your report.

Everything you need to know about European Sustainability Reporting Standards | Carbmee

Learn everything you need to know about the European Sustainability Reporting Standards (ESRS) and how they relate to CSRD compliance. This beginner-friendly guide breaks down ESRS structure, double materiality, reporting steps, and key challenges.