The Role of the CSRD in Promoting Circular Economy Principles: An Empirical Analysis of the European Automotive Industry

The European automotive industry is undergoing a critical transition toward circularity, shaped by evolving sustainability imperatives and new regulatory frameworks, particularly the Corporate Sustainability Reporting Directive (CSRD). This study examines how the CSRD supports the integration of Circular Economy (CE) principles in the sector. Specifically, it aims to (1) identify the most prominent environmental and social key performance indicators (KPIs) for circularity, (2) assess the extent to which the CSRD addresses CE-related principles, and (3) analyze how circular KPIs and data are sourced, managed, and utilized within automotive companies. A mixed-methods design was employed. First, a systematic literature review across databases such as Scopus and Web of Science generated a refined set of environmental and social KPIs relevant to CE. Second, a comparative analysis contrasted these KPIs with CSRD disclosure requirements to evaluate regulatory alignment. Third, semi-structured interviews with industry stakeholders provided qualitative insights into current practices, challenges, and readiness levels for CSRD- compliant circular reporting. The findings underscore the importance of advancing digitalization and data availability, reveal persistent gaps in the adoption of social KPIs, and highlight both opportunities and limitations in the CSRD’s ability to foster a comprehensive circular transition. This research contributes to the debate on sustainability reporting by clarifying regulatory implications and offering actionable guidance for policymakers and practitioners in the automotive sector.