ESG reporting and circular economy obligations for IT teams in 2026

Corporate sustainability reporting is no longer a voluntary exercise for large European companies. The Corporate Sustainability Reporting Directive (CSRD) is now in force, and it requires detailed disclosure of environmental impacts across the business. For IT departments, this means documenting what happens to hardware at end of life. The days of quietly writing off old laptops are over.

What is happening

The CSRD replaced the older Non-Financial Reporting Directive (NFRD) and significantly expanded both the scope and depth of sustainability reporting. As of 2025, companies with more than 250 employees, over €50 million in net turnover, or more than €25 million in total assets must report under CSRD. By 2026, this extends to listed SMEs.

Reporting follows the European Sustainability Reporting Standards (ESRS), which specify what companies must disclose. Several ESRS topics directly affect IT asset management.

Scope 3 emissions and IT equipment

Under ESRS E1 (Climate Change), companies must report greenhouse gas emissions across all three scopes. Scope 1 covers direct emissions. Scope 2 covers energy purchased. Scope 3 covers the entire value chain, including upstream and downstream activities.

IT equipment falls into Scope 3 in two ways:

• Purchased goods and services (upstream): the carbon footprint of manufacturing the devices a company buys
• End-of-life treatment (downstream): the emissions associated with how retired devices are processed

This means the IT department's procurement and disposal decisions directly affect the company's reported carbon footprint. Buying refurbished devices instead of new ones reduces the upstream Scope 3 figure. Using an ITAD operator that extends device life through resale rather than sending everything for recycling reduces the downstream figure.

What procurement and IT managers need to document

CSRD reporting requires evidence, not estimates. IT teams need to track and document:

• The total number and weight of IT devices procured (new and refurbished)
• The estimated carbon footprint of procured equipment
• The disposal pathway for each retired device (resale, recycling, or destruction)
• Certificates of data destruction and WEEE-compliant processing
• The proportion of IT equipment given a second life versus scrapped
• Any circular economy initiatives, such as leasing models or refurbishment partnerships

This documentation must be auditable. External auditors verify CSRD reports with the same rigour applied to financial statements. IT departments that cannot produce evidence of responsible disposal create a gap in their company's sustainability reporting.

CSRD and the circular economy connection

The CSRD explicitly references circular economy principles under ESRS E5 (Resource Use and Circular Economy). Companies must disclose their approach to:

• Resource inflows (what materials and products they consume)
• Resource outflows (what waste and outputs they generate)
• Circular design and business model practices

For IT equipment, this translates to practical questions. Does the company extend device lifecycles through repair and refresh? Does it source refurbished equipment where appropriate? Does it work with ITAD providers that maximise resale over recycling? Does it track the percentage of IT equipment that stays in productive use after retirement?

Companies that can answer these questions with data have a reporting advantage. Those that cannot face audit findings and reputational risk.

Why it matters

CSRD compliance is not optional, and the consequences of poor reporting are real. Companies that fail to meet CSRD standards face regulatory penalties. More importantly, investors, customers, and partners increasingly use sustainability reports to evaluate business relationships.

For IT departments, ESG reporting changes the calculus of hardware decisions. The cheapest disposal option is no longer the obvious choice if it generates higher Scope 3 emissions and weaker circular economy metrics. Working with an ITAD provider that delivers comprehensive documentation and maximises device resale becomes a strategic decision, not just an operational one.

For ITAD operators, CSRD creates demand for better reporting and transparency. Operators who can provide detailed per-device lifecycle documentation, carbon impact calculations, and circular economy metrics have a clear competitive advantage. The ability to produce auditable evidence of device disposition is becoming as important as the disposition itself.

The secondary market benefits overall. When companies are measured on circular economy performance, the financial incentive to extend device lifecycles through refurbishment increases. This drives both supply into and demand from the refurbished IT market.

What to watch

CSRD implementation is still early. Many companies are reporting for the first time in 2025 and 2026, and best practices are evolving. The level of granularity expected for IT asset reporting will likely increase as auditors become more experienced with the standards.

The European Financial Reporting Advisory Group (EFRAG), which developed the ESRS, is expected to issue further sector-specific guidance that may address IT equipment more directly.

Meanwhile, software tools for tracking IT asset lifecycle emissions are emerging. These platforms connect procurement data, ITAD disposition records, and emissions databases to generate the figures needed for CSRD reporting. Early adoption of these tools gives IT teams an advantage as reporting requirements tighten.

The interaction between CSRD and the WEEE directive is also worth monitoring. Both regulations require documentation of end-of-life IT equipment handling, and companies that align their compliance processes across both frameworks reduce duplication and audit risk.

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Frequently asked questions

What is the CSRD? The Corporate Sustainability Reporting Directive is an EU regulation that requires large companies to report detailed sustainability information, including environmental impact, social responsibility, and governance practices. It applies to companies with more than 250 employees or significant turnover and total assets.

How does IT equipment affect Scope 3 emissions? IT equipment contributes to Scope 3 emissions in two ways: through the carbon footprint of manufacturing (upstream, when devices are purchased) and through end-of-life treatment (downstream, when devices are retired). Both must be reported under CSRD.

What documentation do IT teams need for CSRD compliance? IT teams must track device procurement volumes, disposal pathways, data destruction certificates, WEEE compliance records, and the proportion of equipment resold versus recycled. This documentation must be auditable by external sustainability auditors.

Does buying refurbished IT equipment improve ESG metrics? Yes. Purchasing refurbished devices reduces the upstream Scope 3 carbon footprint because no new manufacturing is required. It also demonstrates circular economy practices, which are specifically reported under ESRS E5.

How does CSRD affect ITAD operators? CSRD creates demand for ITAD operators who can provide detailed, auditable documentation of device disposition. Operators that deliver per-device lifecycle reports, carbon impact data, and circular economy metrics gain a competitive advantage with corporate clients subject to CSRD reporting.

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