Challenges faced and strategies employed in early ESRS E5 Resource use and circular economy implementation - A qualitative analysis within the manufacturing industry in Sweden

Abstract

Background: In response to growing concerns over sustainability, the EU has introduced the Corporate Sustainability Reporting Directive (CSRD) to enhance transparency in sustainability reporting. This directive mandates compliance with European Sustainability Reporting Standards (ESRS), notably ESRS E5, focusing on resource use and circular economy. However, the implementation presents challenges for large Swedish manufacturing firms due to increased reporting requirements and complexities of implementation.

Purpose: This thesis aims to explore the early stage implementation of the ESRS E5 standard in large Swedish manufacturing companies. The study focuses on the challenges faced by these companies during the implementation process and identifying the strategies employed to address these challenges.

Method: A qualitative research approach was adopted for this study, utilizing semi-structured interviews complemented by document reviews. Five qualitative semi-structured interviews were held with appropriate personnel at five large manufacturing firms in Sweden in order to gather the empirical results.

Conclusion: The analysis of the study highlights four main challenges connected to the early implementation stage of ESRS E5 in large Swedish manufacturing companies. These challenges are, uncertainties surrounding the new regulation, the more extensive nature of the CSRD, value chain complexities, and external pressures. Organizational strategies mostly connected to knowledge acquisition were observed as responses to these challenges. It was discovered that firms make use of both external and internal sources for gaining new knowledge.