Updated: 15th May 2025
Compliance, Opportunity and the Road Ahead.
As global corporations move toward more sustainable practices, the importance of environmental, social, and governance (ESG) considerations is rapidly rising in corporate agendas. For businesses involved in IT Asset Disposition (ITAD), 2025 marks a pivotal year. With the European Union (EU) pushing forward with stringent new regulations, the integration of ESG principles into ITAD is becoming not just a compliance issue—but a critical opportunity for forward-thinking companies.
The European Green Deal is the EU’s comprehensive framework to achieve climate neutrality by 2050. It drives major changes across industries, focusing on the sustainable lifecycle management of products, responsible sourcing, and efficient resource use. This is the foundation for regulations such as the Corporate Sustainability Reporting Directive (CSRD), Corporate Sustainability Due Diligence Directive (CSDDD), Ecodesign for Sustainable Products Regulation (ESPR), and the Digital Product Passport (DPP).
Let’s look at how some of these regulations will affect your business.
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CSRD & ESRS: Reporting and Compliance
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CSDDD: Due Diligence in the Supply Chain
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ESPR & Digital Product Passport: Design for Circularity
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Turning Compliance into a Competitive Advantage.
CSRD and ESRS: Sustainability Reporting and Compliance for IT Asset Disposition
The CSRD, effective from 2024, expands corporate sustainability reporting obligations to ensure greater transparency on ESG risks and opportunities. The European Sustainability Reporting Standards (ESRS) will guide companies on reporting ESG impacts across their entire value chain, including areas like resource use and emissions.
The scope of the regulations was initially broad, covering around 50,000 companies in Europe, including companies starting with 250 employees and above. The so-called "Omnibus Package", released in February 2025, has however drastically narrowed the companies in scope to less than 10,000, only for undertakings with a minimum of 1000 employees.
For IT Asset Managers, this means being prepared to provide evidence that their ITAD processes integrate sustainable practices, both environmentally and socially. ITAD operations must ensure compliance with regulations, prioritize ethical labor practices, and assess their environmental and community impacts. By focusing on responsible recycling and ethical labor conditions, ITAD vendors can demonstrate their commitment to sustainability and become trusted partners in clients' ESG strategies.
SK tes can assist clients in navigating two key standards under CSRD:
- Emissions Reporting Under CSRD- ESRS E1 (Climate Change): Companies must disclose their Greenhouse Gas (GHG) emissions, reduction targets, and climate transition plans. SK tes is well-equipped to support clients in their emissions reporting, leveraging our Carbon Loop Calculator to help businesses track and reduce Scope 1, 2, and 3 emissions.
- ESRS E5 (Resource Use & Circular Economy): Focusing on waste reduction, recycling, and material efficiency, SK tes can help clients comply with regulations by providing data on downstream disposal and waste management aligned with the European Waste Framework Directive
In addition to the EU directive, the California Climate Disclosure Bills signed into law in October 2024 will also require companies to report their emissions in accordance with the GHG Protocol, including Scope 1, 2, and 3 emissions by 2026.
Companies will be required to disclose their sustainability targets, progress, and the alignment of their efforts with a just transition to a sustainable economy. Similarly, many governments are using the IFRS-ISSB standards as the basis for their sustainability regulations; for example, the UK which is planning to use ISSB standards in their upcoming Sustainability Disclosure Requirements (UK SDR). Many other countries have also announced plans to adopt these standards including Brazil, Costa Rica, Nigeria and Turkey.
CSDDD: Due Diligence in the ITAD and E-Waste Recycling Supply Chain
The CSDDD requires companies to conduct due diligence across their supply chains, addressing environmental and human rights risks. Due diligence in the ESG context means ensuring that every part of the supply chain—from sourcing materials to manufacturing to end-of-life disposal—is compliant with social, environmental, and governance standards. For ITAD, this includes verifying that recycling partners adhere to ethical labor practices and environmental regulations.
As organizations face mounting pressure to show they are socially and environmentally responsible, due diligence in their supply chains will become critical. In the context of ITAD and e-waste recycling, businesses will increasingly need to verify that their ITAD providers are aligned with their ESG values and goals.
To effectively conduct due diligence, companies must go beyond assessing financials and operations. They will need to examine the environmental impact, labor practices, human rights records, and community engagement of their ITAD and recycling providers. OEMs, corporate enterprises, and government agencies will require their ITAD vendors to report on sustainability efforts, demonstrating clear goals and actions addressing ESG issues.
For industries like electronics, which rely on materials like lithium and cobalt, SK Tes offers a circular economy model that reduces reliance on virgin raw materials, ensuring compliance with due diligence requirements while promoting sustainability.
As a key supplier to many companies required to conduct due diligence SK Tes ensures transparency through the publication detailed annual sustainability reports, outlining clear goals and actions in line with global sustainability standards. SK Tes actively participates in voluntary schemes such as EcoVadis, CDP (Carbon Disclosure Project), and GRI (Global Reporting Initiative), which further demonstrates our commitment to openness and transparency while also driving positive environmental impact and improving corporate social responsibility.
ESPR and the Digital Product Passport: Design for Circularity
The Ecodesign for Sustainable Products Regulation (ESPR) sets new standards for product durability, repairability, and recyclability. By 2030, the Digital Product Passport (DPP) will be mandatory for electronics and batteries sold in the EU, ensuring traceability of product materials and environmental impact. ESPR establishes broader sustainability requirements for products across multiple industries, including electronics and batteries. The regulation introduces mandatory sustainability criteria, such as:
- Minimum recycled content in new products
- Improved product durability and repairability
- Restrictions on hazardous substances
- Enhanced product information for consumers and businesses
By promoting circular design principles, ESPR aligns with the EU’s goal of reducing resource dependency and minimizing environmental impacts. This regulation presents opportunities for our industry to work with manufacturers in designing products that facilitate easier refurbishment, disassembly, and recycling. For ITAD providers, this means not only ensuring that products are recycled or disposed of correctly but also making it easier for businesses to track the entire lifecycle of their assets. The Digital Product Passport will enable full traceability, allowing businesses to better manage the reuse and recycling of electronic products, ensuring they meet compliance standards.”
SK Tes is well-positioned to support clients in meeting these requirements by providing recycling services that align with circular design principles and the DPP framework.
Turning Compliance into Competitive Advantage
The evolving regulatory landscape offers both challenges and opportunities. By aligning with regulations like the CSRD, CSDDD, ESPR, and the DPP, SK tes not only helps clients meet compliance but also positions itself as a strategic partner in their sustainability journey. Companies that embrace these changes early will not only fulfil regulatory obligations but also thrive in a sustainability-driven economy.
SK Tes not only helps clients navigate these new regulations but also provides hands-on solutions like our Carbon Loop Report, which helps businesses assess and reduce their Scope 1, 2, and 3 emissions. Our commitment to transparency and continuous improvement is demonstrated through our active participation in global initiatives like EcoVadis and CDP, which allow our clients to track their sustainability progress alongside us.
By incorporating these regulatory requirements into our business model, SK Tes supports clients in enhancing their circular economy strategies, reducing their carbon footprint, and gaining a competitive edge in an increasingly sustainable world.
As these regulations continue to evolve, now is the time to assess your organization’s ITAD strategy. Partner with SK Tes to ensure your IT asset disposition processes are not only compliant but also contribute to your broader sustainability goals. Together, we can turn ESG compliance into a competitive advantage.
