If My Business Isn’t in Manufacturing, Do I Need to Report Pollution Under CSRD?

Many small and growing businesses (SMEs) wonder whether they need to report on pollution under the Corporate Sustainability Reporting Directive (CSRD). It’s a fair question — after all, pollution reporting sounds like something only factories or heavy industry would deal with. The good news is that for most service-based small and growing businesses (SMEs), the reporting requirement is minimal.

Pollution in the CSRD Framework

The European Sustainability Reporting Standards (ESRS) — which underpin CSRD — include a full section on Pollution (ESRS E2). This standard requires large companies to disclose pollutants released to air, water, and soil, as well as information on hazardous substances and microplastics.

CSRD itself applies directly only to large and some listed companies. But many SMEs are asked to provide pollution data because their banks or corporate clients need CSRD-compliant information from suppliers.

Pollution in the SME Standard (VSME)

For smaller businesses, the Voluntary Sustainability Reporting Standard for SMEs (VSME) provides a simplified approach. Pollution is covered under Disclosure B4: Pollution of air, water and soil. Learn more about VSME Basic vs Comprehensive modules.

In practice, this means:

• If you are already legally required to report pollutants (for example, under an environmental permit or the Industrial Emissions Directive), you should include those figures in your sustainability report.
• If you are not legally required and you don’t track pollutants under a system like ISO 14001 or EMAS, you can simply state that this disclosure is “not applicable”.

So while ESRS E2 is detailed and demanding for large companies, VSME B4 keeps it proportionate for SMEs.

Quick Comparison: CSRD vs VSME on Pollution

Who Typically Needs to Report?

Pollution disclosures are most relevant for SMEs in:

• Manufacturing (chemicals, ceramics, textiles, metal processing, food production, etc.) - see our CSRD guide for manufacturing SMEs
• Agriculture & livestock (farms with significant animal numbers, fertiliser use, or irrigation)
• Energy or waste operations (large boilers, treatment plants, etc.)

These sectors are usually regulated under the Industrial Emissions Directive (IED).

What About Office-Based and Service Firms?

If your company is primarily office- or service-based, your environmental footprint usually comes from:

• Energy use and greenhouse gas emissions (reported under Scope 1 and 2).
• Waste and recycling.
• Water consumption.

Pollution in the CSRD sense (toxic discharges, heavy metals, industrial fumes) is not relevant.

Sample Disclosure Text

Here are two simple text examples you can adapt for your sustainability report:

If pollution is not applicable (typical for service-based SMEs):

“The company has no direct emissions of pollutants to air, water, or soil. Disclosure B4 (VSME) and ESRS E2 (Pollution) are not applicable.”

If pollution is applicable (e.g. a small manufacturer with existing permits):

“The company is required under national law to report emissions of pollutants to the competent authority. For the reporting year, emissions included: [list pollutant and quantity, e.g. Nitrogen Oxides (NOx): 1.2 tonnes; Cadmium: 10 kg]. This information is already published under [name of system, e.g. Industrial Emissions Directive or ISO 14001 reporting].”

Practical Tip

Even if you are not a manufacturer, double-check whether your activities fall under local environmental reporting rules. For example, small food processors, printers, or waste handlers may still need to disclose certain pollutants.

Bottom Line

• Under CSRD/ESRS, pollution reporting is a full, detailed standard (E2).
• Under VSME, SMEs only report pollution if it’s already required by law or voluntarily monitored.
• For most service businesses, pollution reporting is not applicable, and a short statement is sufficient.

This lets SMEs focus on more material topics such as energy use, emissions, workforce, and waste.

Key Terms

• Corporate Sustainability Reporting Directive (CSRD) — An EU law requiring large companies — and eventually some medium-sized ones — to report on their environmental and social impacts. Smaller suppliers are not directly in scope but may be asked for CSRD-style data by banks or bigger clients.
• European Sustainability Reporting Standards (ESRS) — Detailed rules under CSRD. They include standards on climate (E1), pollution (E2), water (E3), biodiversity (E4), and circular economy (E5).
• Voluntary Sustainability Reporting Standard for SMEs (VSME) — A simplified framework to help SMEs share sustainability information. It includes a pollution disclosure (B4) but only when applicable.
• Disclosure B4: Pollution — The VSME requirement to disclose pollutants to air, water, or soil, but only if already legally required or voluntarily monitored.
• Industrial Emissions Directive (IED) — EU legislation regulating pollutant emissions from industrial and intensive livestock activities.