How to interpret ESRS E5: Circular economy (Updated March 2026)
Disclaimer: New EUDR developments - December 2025
In November 2025, the European Parliament and Council backed key changes to the EU Deforestation Regulation (EUDR), including a 12‑month enforcement delay and simplified obligations based on company size and supply chain role.
Key changes proposed:
- New enforcement timeline: 30 December 2026 for large/medium operators, 30 June 2027 for small/micro operators
- Simplified DDS: One-time declarations for small and micro primary producers
- Narrowed scope: Most downstream actors and non‑SME traders would no longer need to submit DDSs
- New DDS requirement: Estimated annual quantity of regulated products must be included
These updates are not yet legally binding. A final text will be confirmed through trilogue negotiations and formal publication in the EU’s Official Journal. Until then, the current EUDR regulation and deadlines remain in force.
We continue to monitor developments and will update all guidance as the final law is adopted.
Key takeaways
- ESRS E5 covers resource inflows, outflows and waste management under the CSRD, requiring companies to disclose circular material use rates, recycled input shares and waste processing methods.
- The simplified ESRS cut E5 data points by 60%, deleted the standalone financial effects disclosure (E5-6) and added a new metric on critical raw materials.
- Coolset's CSRD platform guides teams through E5 materiality assessment, resource tracking and circular economy disclosures in one workflow.
Changes to ESRS E5 as a result of Omnibus
The Omnibus I Directive adopted in February 2026 introduced significant simplifications across all ESRS standards, including ESRS E5 on Circular Economy. Mandatory data points were reduced substantially, and many previously required disclosures became conditional or optional.
The most significant changes for ESRS E5 include:
- Several waste and material flow metrics previously mandatory are now conditional (applicable only when material per the DMA)
- The product design and end-of-life disclosures have been simplified
- Companies with fewer than 750 employees in scope may benefit from additional phase-in provisions
For companies still in CSRD scope under the Omnibus thresholds (1,000+ employees and >€450M turnover), ESRS E5 disclosures remain required where circular economy topics are material. For others, the standard is now largely voluntary.
What is ESRS E5?
ESRS E5 — Circular Economy — is the European Sustainability Reporting Standard governing how companies disclose their approach to resource use, waste, and product lifecycle management. It covers:
- Resource use and consumption across the value chain
- Waste generation and management
- Product design for circularity (repairability, recyclability, take-back)
- Revenue from circular business models
- Targets and actions to improve circularity
Who does ESRS E5 apply to?
ESRS E5 applies to companies where circular economy topics are material per their double materiality assessment. This means:
- Companies with significant product waste or packaging obligations
- Manufacturers with material waste streams or resource-intensive processes
- Retailers handling high volumes of single-use packaging
- Companies with take-back or end-of-life product responsibilities
Post-Omnibus, the reporting obligations for circular economy are materially lighter than originally specified, but the underlying business case for circularity — cost reduction, regulatory compliance, customer expectations — remains strong.
ESRS E5 key disclosures
Resource inflows (E5-4)
Disclosures on materials consumed, water use, and the proportion of materials sourced from recycled or renewable sources.
Resource outflows (E5-5)
Disclosures on products sold, their end-of-life fate, waste generated, and how waste is managed (recycled, incinerated, landfilled).
Waste (E5-5)
Detailed breakdown of waste streams, hazardous vs. non-hazardous, and waste management methods. This is often the most data-intensive E5 disclosure.
How to prepare for ESRS E5
- Determine materiality via your DMA
- Map your key material flows and waste streams
- Identify phase-in provisions you can apply in the first year
- Build supplier engagement to collect upstream material data
- Set targets for waste reduction and circularity where material
How Coolset supports ESRS E5
Coolset’s CSRD platform includes structured data collection for ESRS E5 as part of the full reporting workflow. Following the amended ESRS under Omnibus, the platform reflects the updated mandatory/conditional data point structure. See also our guide on CSRD regulation for broader context. Book a demo to see the platform in action.
Written by our sustainability researchers, this guide contains all the steps for compiling your own DMA.
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