Consumer Durables Impact Report: Consumer Durables Manufacturing Edition, Q1 2025

Cybersecurity Risks and Trade Barriers Reshape Durables Manufacturing Sustainability

This comprehensive analysis examines how cybersecurity and data protection have emerged as financially material risks for 68% of consumer durables manufacturers, driven by the proliferation of internet-connected devices and increasingly sophisticated cyber threats. The report provides an in-depth assessment of the European Cyber Resilience Act's implementation, which mandates comprehensive security requirements throughout product lifecycles, affecting the global manufacturing operations of industry leaders such as Sony Group, Samsung Electronics, and LG Electronics.

The analysis also uncovers how recent tariff implementations have forced 56% of manufacturers to delay or modify sustainability initiatives creating a complex balancing act between economic resilience and environmental commitments.

Call to Action: Corporate leaders should develop scenario-based sustainability strategies that can adapt to trade policy fluctuations while maintaining core environmental commitments particularly for critical materials subject to volatile tariff environments.

This analysis reveals five emerging ESG value chain risks centred around connected device vulnerabilities, with significant implications for regulatory compliance, consumer trust and financial performance. It explores how these cyber risks translate into potential liabilities for manufacturers through both financial materiality lenses (affecting investor decisions) and impact materiality considerations (affecting broader stakeholders), providing a foundation for robust double materiality assessment frameworks.

The report charts the industry's transition toward "Security by Design" practices, which integrate cybersecurity considerations from initial product conception through end-of-life, requiring manufacturers to maintain continuous vulnerability monitoring and provide timely security updates. This shift represents both a compliance challenge and a competitive opportunity, with European manufacturers achieving 41% higher CSRD compliance rates compared to their global counterparts.

Looking beyond immediate compliance, the analysis identifies emerging best practices in supply chain security, particularly regarding the verification of semiconductor components and the transparency of software bill of materials (SBOM) throughout the value chain. The report examines how manufacturers are leveraging AI technologies for automated vulnerability detection and remediation, potentially reducing security incident costs by an average of 28% while enhancing product trust and confidence.

The financial implications of cybersecurity failures are quantified through case studies of recent breaches, demonstrating how inadequate security practices directly impact enterprise value, risk premiums and capital accessibility. With regulatory penalties under the EU's Cyber Resilience Act potentially reaching €15 million or 2.5% of global turnover, the report offers actionable strategies for aligning governance structures, risk management frameworks and sustainability disclosures with evolving cybersecurity expectations.