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By CSE research department
Battery and electric vehicle (EV) manufacturing has become a pillar of Europe’s green industrial strategy and a material topic under the Corporate Sustainability Reporting Directive (CSRD). For companies affected by CSRD, this sector now goes far beyond decarbonisation. It intersects with climate planning, resource efficiency, workforce development, and supply chain governance.
The Strategic Role of Battery and EV Manufacturing
Since 2017, over €72 billion has been invested in European battery and EV manufacturing. This momentum supports the EU’s climate neutrality goals while reshaping industrial value chains. At the same time, it introduces new sustainability disclosure requirements under the European Sustainability Reporting Standards (ESRS), particularly:
For advanced ESG professionals, battery and EV production is a real-world case study of how industrial policy, sustainability regulation, and global supply chains are converging.
How Battery and EV Manufacturing Supports ESRS and ESG Alignment
When strategically managed, battery and EV manufacturing can deliver strong ESG performance and regulatory alignment:
ESRS E1: Climate Change
EVs play a central role in decarbonising transport—a major source of global emissions. Battery production also supports the shift to renewable energy through storage solutions. Together, these technologies strengthen corporate climate transition plans and science-based targets.
ESRS E5: Resource Use and Circular Economy
Battery manufacturing drives innovation in material efficiency, reuse, and recycling. Companies that invest in circular design, closed-loop systems, and secondary raw materials can meet the growing expectations of ESRS E5.
ESRS S1: Own Workforce
The expansion of manufacturing facilities across Europe, particularly in Central and Southern regions, creates new industrial jobs. Key workforce metrics—including training, occupational health and safety, fair wages, and reskilling—are now critical under ESRS S1.
Governance and Sustainable Investment
Clear EU industrial policies and vehicle CO₂ standards provide long-term predictability, supporting sustainable capital allocation and aligning with the expectations of sustainable finance frameworks.
Turning Capacity into ESG Value: Key Risks and Compliance Steps
To maximize the ESG value of battery and EV investments, companies must embed ESRS principles into both strategy and operations. Below are key risks aligned with ESRS focus areas:
Climate Transition Risk (ESRS E1)
Policy inconsistency or weakened EU climate targets could jeopardize transition plans, increasing exposure to stranded asset risks.
Material Sourcing and Circularity Risk (ESRS E5)
Battery production depends on critical raw materials like lithium, cobalt, and nickel. Companies must demonstrate responsible sourcing, recycling strategies, and reduced reliance on virgin materials.
Workforce and Skills Risk (ESRS S1)
As production shifts to regions like Hungary and Spain, proactive workforce planning, training, and social dialogue are essential to maintain labour standards and avoid social compliance issues.
Applying ESRS Standards Across the Battery and EV Value Chain
Battery and EV manufacturing is a flagship sector for ESRS implementation. Below is a summary of key disclosures:
ESRS E1: Climate Reporting
Companies must disclose Scope 1, 2, and 3 emissions across the full value chain from upstream raw material extraction to downstream vehicle use assumptions.
ESRS E5: Circularity and Resource Use
Reporting must cover material inflows, waste generation, recycling performance, and circular business models, especially for battery end-of-life management.
ESRS S1: Workforce Metrics
Transparency is required around workforce indicators such as training hours, health and safety, diversity, and collective bargaining—key considerations in large-scale industrial projects.
For multinationals operating across jurisdictions, ESRS alignment also supports convergence with global frameworks such as ISSB, TCFD, and GRI—enhancing ESG comparability and reducing reporting fragmentation.
FAQs
What’s the relevance of ESRS E1 for EV and battery manufacturing?
ESRS E1 requires companies to demonstrate how their production supports climate transition goals, emissions reductions, and value chain resilience against climate-related risks.
How does ESRS E5 apply to battery production?
This standard focuses on resource efficiency, waste minimization, and circular economy practices. Battery makers must report on material sourcing, recycling rates, and strategies to reduce dependence on primary raw materials.
Why is ESRS S1 critical for new EV and battery plants?
New facilities impact local labour markets significantly. ESRS S1 mandates disclosure of working conditions, training efforts, health and safety standards, and worker engagement—especially in rapidly growing regions.
From Industrial Capacity to ESRS Leadership
Battery and EV manufacturing is not just another reporting topic under CSRD. It is one of the clearest examples of how European industrial policy, climate ambition, and ESG regulation now operate as a single system.
For sustainability and ESG professionals, this sector illustrates what advanced ESRS implementation truly means in practice. Integrating climate transition planning under ESRS E1, circular resource strategies under ESRS E5, and workforce governance under ESRS S1 is no longer theoretical. It is already shaping investment decisions, supply chain design, and corporate competitiveness across Europe.
Organisations that treat ESRS as a strategic management framework rather than a compliance exercise will be better positioned to manage risk, attract sustainable finance, and build long-term resilience in rapidly evolving industrial ecosystems.
Building the Skills Behind ESRS Implementation
As ESRS requirements become more detailed and interconnected, the demand for professionals who can translate regulation into operational strategy continues to grow.
CSE’s advanced ESG and sustainability training programmes are designed for professionals who want to move beyond basic compliance and develop real implementation capability across:
- ESRS E1, E5, and S1 application
• Climate transition planning and decarbonisation pathways
• Supply chain sustainability and circular economy integration
• Double Materiality and ESG governance under CSRD
Choose the Right ESG Path for Your Career Focus
For professionals focused on European sustainability regulation and reporting
Certified Sustainability (ESG) Practitioner Programme – Europe (Cohort 1, 2026)
This advanced programme is designed for professionals who want to master CSRD, SFDR, and EU Taxonomy requirements while strengthening ESG reporting, governance, and assurance skills.
The programme combines regulatory depth with practical case studies from European industries, supporting alignment with ESRS, GRI, SASB, ISSB, and TCFD frameworks.
For professionals working across global ESG and climate disclosure frameworks
Global GRI Standards Certified Training Course
Updated with climate reporting aligned to IFRS S2, this programme supports multi-jurisdictional ESG reporting and climate strategy development, with real-world examples from global organisations.
Advancing Your ESG Credentials
Participants may also enhance their certification through specialised ESG modules, including Net Zero, ESG Reporting, and Sustainable Supply Chains, or pursue a dual certification pathway combining ESRS-focused training with official GRI certification.
Limited seats. Elevated credentials. Practical ESG impact.
In a regulatory environment where sustainability expertise increasingly defines leadership, investing in advanced ESG capability is no longer optional. It is a strategic career decision aligned with Europe’s next phase of industrial transformation.
For super early bird and group discounts or customised in-house training opportunities, please contact marketing@cse-net.org
