Waste and Recycling Reporting for Small Manufacturers: What Counts and What Doesn’t

Managing and reporting waste isn’t just a box-ticking exercise under the Corporate Sustainability Reporting Directive (CSRD) — it’s a way for small manufacturers to show responsible resource use and control costs.

This guide explains, in practical terms, how small and medium-sized manufacturers can meet CSRD or Voluntary Sustainability Reporting Standard for SMEs (VSME) expectations on waste and recycling: what counts, what doesn’t, and how to report it clearly.

1. Why Waste Reporting Matters

The CSRD requires companies to disclose their impacts on resource use and circular economy (Article 1(3)(iv) of Directive 2022/2464/EU). For manufacturers, this covers materials, by-products, packaging, and process waste.

Waste data demonstrates:

• Efficiency in production (less waste = better material use).
• Environmental responsibility (recycling and reuse rates).
• Compliance with EU and national waste laws.

For small manufacturers, tracking waste can also highlight cost-saving opportunities — fewer skips, lower disposal fees, and potential revenue from recyclables.

2. CSRD and VSME Requirements in Brief

Under the CSRD (ESRS E5 – Resource Use and Circular Economy)

Large companies must disclose:

• Total waste generated, broken down by hazardous and non-hazardous types.
• Waste diverted from disposal (recycling, reuse, recovery).
• Policies and targets for waste prevention and circularity.

Under the VSME Basic Module (B7 – Resource Use, Circular Economy and Waste Management)

Small, non-listed companies can use the simplified approach: They must disclose:

1. Total annual generation of waste by type (non-hazardous and hazardous) - see our guide on what waste categories you must report.
2. Total waste diverted to recycling or reuse - learn more about how to track recycling and reuse.
3. For manufacturers or construction-type businesses, the mass flow of materials used annually.

If your business only generates household-like waste (e.g. paper, canteen waste), you may simply state that and omit detailed breakdowns.

3. What Counts as Waste (and What Doesn’t)

✅ Counts as Waste

• Production scrap: metal offcuts, plastic sprues, trimmings.
• Packaging waste: cardboard, plastic wrap, wooden pallets.
• Maintenance waste: used oils, filters, rags, spent chemicals.
• Obsolete materials: expired paint or adhesives.
• Office waste: paper, toner cartridges (if reported as part of total waste).

⚠️ Doesn’t Count

• Products returned for reuse or repair (not waste, still part of your product flow).
• Reusable transport packaging (if returned to supplier).
• Emissions to air or water — these are disclosed elsewhere (under Pollution, ESRS E2 / VSME B4).
• Internal reprocessing (if material stays in the production cycle).

4. Classifying Waste: Hazardous vs. Non-Hazardous

SMEs should follow the European Waste Catalogue (EWC) system:

Any waste code with an asterisk (*) is hazardous and must be disclosed separately. If unsure, check your waste contractor’s classification.

5. Measuring and Recording Waste

For most small manufacturers, the simplest data sources are:

• Waste transfer notes or invoices from collection contractors.
• Material inventory or weighbridge tickets for recyclables.
• Internal records if you track scrap or rejected parts.

Prefer reporting in weight (kg or tonnes), but volume (m³) is acceptable if weight is unknown.

When reporting recycled quantities, use what’s sent to recycling operators, not what’s ultimately processed.

6. Example Waste Disclosure Table (VSME B7)

A narrative example:

“During FY2024, the company generated 12.5 tonnes of waste, 87% of which was recycled or reused. The main waste streams were metal offcuts and packaging materials. All hazardous waste was collected by licensed operators in compliance with national regulations.”

7. What “Circular Economy” Means for Small Manufacturers

The VSME Standard encourages SMEs to explain how they apply circular economy principles — even if qualitative. You can mention efforts such as:

• Using reusable or returnable packaging.
• Designing products for repair and longer life.
• Reusing production scrap internally.
• Switching to recycled materials.

Even small changes — such as reducing packaging or segregating scrap — show that your business “circulates products and materials at their highest value”.

8. Step-by-Step: Building Your Waste and Recycling Section

1. List your waste types (production, maintenance, packaging).
2. Classify each as hazardous or non-hazardous using EWC codes.
3. Record quantities from waste transfer documents or invoices.
4. Split results into “recycled/reused” and “disposed”.
5. Write a short narrative describing your waste management efforts.
6. Keep records for verification — at least three years.

9. Common Mistakes to Avoid

🚫 Reporting total waste without splitting hazardous/non-hazardous. 🚫 Counting reused materials as waste. 🚫 Ignoring packaging waste. 🚫 Estimating without documentation. ✅ Tip: Keep a digital folder with your contractor reports and receipts — it’s enough for audit readiness.

Frequently Asked Questions

Do small manufacturers need to report waste and recycling for CSRD?

Most small manufacturers are not directly required to report under CSRD, but they may need to provide waste data to large buyers, corporate clients, or banks who are CSRD-compliant. Under VSME B7, waste reporting is encouraged for all manufacturers as it’s typically a material environmental topic. Reporting waste demonstrates responsible resource management and helps meet supply chain requirements.

Check if CSRD applies to your business →

How do I separate hazardous from non-hazardous waste for reporting?

Use the European Waste Catalogue (EWC) system to classify waste. Any waste code with an asterisk (*) is hazardous and must be disclosed separately. Check your waste contractor’s classification or use EWC codes from your waste transfer notes. Common hazardous waste includes used oils, solvents, fluorescent tubes, and electronics with hazardous components. Keep all waste transfer notes and disposal certificates as evidence.

See the complete manufacturing guide →

Can I count reused production scrap as waste reduction?

Yes, reused materials (e.g., production scrap reused internally, returnable packaging) can count toward waste reduction and circular economy goals. However, be careful not to double-count: if you reuse materials in production, don’t count them as both waste and new material. Document your reuse practices clearly in your disclosure, as this demonstrates circular economy principles valued by CSRD-compliant clients.

How accurate does my waste data need to be?

For VSME reporting, reasonable accuracy is expected, not perfection. Use actual data from waste transfer notes and contractor invoices where available. If you need to estimate (e.g., for small quantities or internal scrap), document your methodology and be transparent about assumptions. The key is consistency year-over-year so you can track improvements and demonstrate progress to clients and lenders.

Key Terms

• CSRD – Corporate Sustainability Reporting Directive (EU 2022/2464).
• VSME – Voluntary Sustainability Reporting Standard for SMEs (EFRAG, 2024).
• ESRS – European Sustainability Reporting Standards.
• Circular Economy – Economic model based on keeping materials in use and designing out waste.
• Hazardous Waste – Waste with properties harmful to health or the environment, listed in the EU Waste Framework Directive.
• Non-Hazardous Waste – Ordinary waste that doesn’t contain hazardous substances.
• Recycling/Reuse – Recovery operations that return waste to use as materials or products.
• SME – Small and Medium-sized Enterprise.
• Turnover – Total net sales in a financial year.

To help you track all the waste and recycling data you need, use our checklist generator:

This tool will help you identify all the data points you need to collect for waste reporting and ensure nothing is missed.