If you sell physical products in or into the EU and you fall in scope, ESRS E1 requires you to disclose your climate impact, including material Scope 3 value-chain emissions across the relevant GHG Protocol categories, and to have that disclosure externally assured. For a product brand, the heaviest part is almost always Scope 3, and within it Category 3.1, purchased goods and services, which is where your product carbon footprints live.
This guide covers what changed in 2026, what ESRS E1 actually asks of a product company, why assurance reshapes the work, and how to assemble an audit packet that survives review. Regulatory specifics below reflect the post-Omnibus position as of mid-2026. Verify the latest before you make filing decisions, because this area is still moving.
What changed in 2026: the Omnibus reset
The European Commission's Omnibus simplification package significantly narrowed CSRD's reach and shifted timelines. The key points as they stand in mid-2026:
- Scope narrowed. The revised mandatory scope targets large EU entities with more than 1,000 employees and net turnover above €450 million, a dual threshold that removes a large share of previously in-scope companies. These revised thresholds apply to financial years beginning on or after 1 January 2027.
- Timelines moved. The Omnibus directive was published in the Official Journal in February 2026. Original Wave 1 companies, meaning large public-interest entities already reporting, continue through the 2026 and 2027 reporting cycles. Companies newly in scope under the revised thresholds begin reporting later, broadly from 2028 on FY2027 data.
- ESRS slimmed. The amended ESRS cut a substantial number of data points and gave companies more flexibility where value-chain data is genuinely hard to get. The amended standards were expected to be adopted by the Commission around mid-2026, applying to reporting periods beginning on or after 1 January 2027.
What did not change: ESRS E1 remains the most substantive topical standard, climate is the disclosure most likely to be material for a product company, and material Scope 3 still has to be reported and assured. The Omnibus reduced the breadth of the regime. It did not soften the core climate-evidence expectation for the companies still in it. If anything, fewer data points means each disclosed number carries more weight under assurance.
A practical implication: even brands now below the threshold often stay in scope indirectly, because in-scope customers ask suppliers for product-level emissions data to complete their Scope 3.1. Compliance pressure travels down the value chain whether or not you file yourself.
What ESRS E1 requires of a physical-product brand
ESRS E1 is broad, covering transition plans, targets, energy mix, and the financial effects of climate risk. For a product company, the parts that demand the most data work are these.
Gross Scopes 1, 2, and 3
You disclose gross Scope 1 (direct), Scope 2 (purchased energy), and material Scope 3 emissions. For most physical-product brands, Scope 3 dwarfs the other two, and Category 3.1, purchased goods and services, is the single largest line, because it is the sum of your products' embedded footprints. This is why product-level carbon data and CSRD compliance are the same project for a product brand, not two.
All material Scope 3 categories, GHG Protocol-based
ESRS E1 requires disclosure of material Scope 3 emissions across the relevant GHG Protocol categories, of which there are fifteen, using the GHG Protocol as the methodological foundation. You assess which categories are material. For product brands that typically includes 3.1 (purchased goods), 3.4 (upstream transport), and often 3.11 and 3.12 (use and end-of-life) depending on the product.
Primary versus secondary data, disclosed rather than blended
This is the requirement product teams most often underestimate. You must disclose the split between primary data, obtained directly from value-chain partners such as supplier PCFs, EPDs, and metered figures, and secondary data, meaning industry averages, proxies, and spend-based estimates. The expectation is to increase primary data over time and to be transparent about where you are relying on estimates. A number that silently mixes the two cannot be disclosed accurately, and an assurer will probe exactly this seam.
Methodology, boundaries, and consistency
You document the methodology, boundaries, and assumptions behind the figures, and apply them consistently across products and across periods. For PCFs that means a recognized basis, such as ISO 14067, the GHG Protocol Product Standard, or the relevant PEF category rules, applied the same way each cycle.
The dimension most guides skip: assurance
CSRD does not just ask you to report. It requires external assurance of the sustainability statement, starting at limited assurance. This is the difference between CSRD and most voluntary carbon reporting, and it changes how you have to prepare.
Limited assurance means an independent assurer expresses a conclusion based on procedures that are less extensive than a full audit, but they still sample disclosed figures and test them against evidence. For your Scope 3.1 number, that means an assurer can pick a SKU and ask you to substantiate it: show the activity data, the source documents, the emission factors and their versions, and the methodology in force.
The implication is blunt. A carbon figure that exists only as a dashboard output, without a retrievable trail to its sources, is an assurance liability. The work of CSRD compliance for a product brand is not mainly calculating numbers. It is being able to defend them on demand. We cover the software side of that in what audit-ready PCF software actually means, and the audit itself in what assurers actually ask for.
How to prepare an audit packet that holds up
An audit packet is the bundle you hand the assurer to substantiate disclosed figures. For a product brand reporting Scope 3.1, a packet that survives review contains, per sampled SKU and in aggregate:
- The disclosed figure and its boundary. What was reported, on what cradle-to-X boundary, under which methodology version.
- Activity data with provenance. Every material input (mass, energy, freight) linked to its source artifact, whether a bill of materials, purchase order, utility bill, carrier record, or supplier PCF, ideally hashed so you can prove the document is the one you used.
- Emission factors with versions. Which database, which version, which vintage, applied to which inputs.
- The primary and secondary data split. Clearly labeled, per input, with the basis for any estimates.
- Replayable calculation lineage. The path from activity data to factor to method to result, recorded so a challenged figure can be replayed rather than reconstructed.
- Version history. Prior states preserved, so you can show what you reported in an earlier cycle and why it differs now.
- Methodology documentation. Boundaries, allocation choices, and consistency across SKUs and periods.
The recurring theme across all seven: an assurer works backward from the number to its evidence. If your data lives in spreadsheets and a BI dashboard, assembling this packet is a multi-week scramble each cycle, and reproducibility is fragile. If your system records evidence and lineage as it calculates, the packet is largely a byproduct.
A short worked example
An apparel brand discloses Scope 3.1 of 41,000 tCO2e. The assurer samples the cotton T-shirt line at 8.4 kg CO2e per unit and asks for support. A defensible answer points to the bill of materials (linked PO), the cotton emission factor (ecoinvent version and vintage), supplier-metered dyeing energy flagged as primary, carrier-reported freight, and methodology v4 locked at reporting time, with every input traceable to a document. The brand isn't defending the 41,000 in the abstract. It's defending a chain of evidence that rolls up to it. That is what converts a calculated number into a disclosed-and-assured one.
Where CarbonSKU fits
CarbonSKU produces CSRD-ready audit packets by binding every emissions figure to hashed, versioned source documents and a replayable calculation lineage, with the primary and secondary split visible on each number and prior states preserved for year-over-year defense. It ingests the data you already have, including SAP, Oracle, NetSuite, EDI carrier feeds, supplier portals, and OCR'd documents, and works to GHG Protocol and ISO 14067. The product tour shows the evidence locker and the reports surface it produces.
Bottom line
For a physical-product brand, CSRD compliance under ESRS E1 is mostly a Scope 3.1 evidence problem. The Omnibus changes narrowed who must report and pushed timelines toward 2027 and 2028, but left the core intact: disclose material value-chain emissions on a GHG Protocol basis, declare your primary and secondary data split, and stand behind the numbers under external assurance. Prepare for the assurer working backward, build the audit packet as a byproduct of how you calculate, and the deadline becomes a process rather than a fire drill.
Regulatory details reflect the post-Omnibus position as of June 2026 and are summarized for orientation, not legal advice. Confirm current scope, thresholds, and timelines for your entity before making filing decisions.