The ESRS explains: ESRS E5 - Resource use and circular economy

As part of our blog series on the European Sustainability Reporting Standards (ESRS), today we would like to take a closer look at the sector-specific standard ESRS E5. This standard deals with the use of resources and the circular economy, a central aspect of modern sustainability strategies. By reporting on these topics, companies should make their efforts to use resources sustainably more transparent and support the transition to a circular economy.

What is ESRS E5?

ESRS E5 focuses on two core areas: resource use and the circular economy. While resource use focuses primarily on non-renewable resources, the circular economy aims to preserve the value of materials and products for as long as possible. This is achieved by avoiding waste, recycling materials and minimizing environmental damage.

Central to ESRS E5 is the recording and disclosure of resource inflows and outflows as well as reporting on measures to implement circular economy practices. Companies should explain how they use raw materials, how waste is managed and what steps are being taken to reduce their environmental footprint.

Objectives of the ESRS E5

The main purpose of ESRS E5 is to ensure that companies present the following information transparently:

• Impact of resource use on the environment.
• Strategies and measures to mitigate negative effects.
• Adaptation to circular economy principles.
• Risks and opportunities in connection with the use of resources.

This standard is applied as part of the Corporate Sustainability Reporting Directive (CSRD) and supports companies in designing their sustainability reports in such a way that they meet the increasing requirements for transparency and environmental responsibility.

Overview of Disclosure Requirements Pursuant to ESRS E5

Under ESRS E5, companies are required to report comprehensively on their resource use and circular economy measures. The following specific requirements apply:

Synergies with other ESRS standards

Similar to other environmental standards in the ESRS series, ESRS E5 is closely linked to other standards:

• ESRS E1 (Climate Change): Resource use and the circular economy have a direct impact on energy consumption and the associated greenhouse gas emissions.
• ESRS E3 (Water and marine resources): Efficient use of resources can reduce water consumption and pollution.
• ESRS E4 (Biodiversity and Ecosystems): The protection of ecosystems can be supported through the implementation of circular economy practices.

Practical implementation and challenges

The implementation of ESRS E5 poses challenges for companies, especially in the manufacturing industry. In particular, the precise measurement of resource flows and the development of strategies to optimize the circular economy are complex. Companies need to produce detailed reports on their resource flows, waste management strategies and the reuse of materials.

One challenge lies in integrating the circular economy into existing processes. Comprehensive analyses and measures are required here in order to improve both the value chain and environmental performance. Companies must ensure that they not only comply with legal requirements, but also actively contribute to sustainable development.

Conclusion: The importance of ESRS E5

ESRS E5 is an important step towards a more sustainable economy. Companies that meet the requirements of this standard benefit not only by meeting regulatory requirements, but also by improving their resource efficiency and strengthening their long-term competitiveness.

By implementing circular economy principles, companies can reduce their environmental impact while increasing their resilience to global resource constraints and regulatory changes. Resource use and circular economy requirements are relevant to a wide range of sectors and require close collaboration between a company's different departments, from procurement to waste management.

Outlook

Given current developments—from Omnibus I and the Quick-Fix to the ongoing EFRAG exposure drafts —it is clear that reporting requirements regarding resource use and the circular economy are evolving: greater clarity in structure, a stronger emphasis on materiality, but also a continuing demand for binding, robust KPIs. Companies should therefore not only focus on meeting the minimum requirements but also anticipate future scenarios: What additional specifications could become mandatory by 2026? How can existing data gaps be closed before they become a sticking point in audits or ratings?

In upcoming posts, we will explore these questions in greater depth with a practical focus—providing examples, tools, and strategies to help companies streamline their ESRS E5 reporting, capitalize on opportunities in the circular economy, and position themselves as sustainable in the eyes of stakeholders.

In upcoming articles, we will explore the practical applications of ESRS E5 in more detail and show how companies can improve their reporting to efficiently meet resource use and circular economy requirements. Compliance with this standard not only reinforces a company's environmental and social values, but also offers economic opportunities in an increasingly sustainability-oriented economy.

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Last updated: September 3, 2025