CSRD & Value Chain Reporting

Is your business ready to track ESG impacts across its value chain? Supply chain transparency is a key pillar of CSRD compliance. Companies that proactively manage Scope 3 emissions and supplier risks will be better prepared for evolving regulations and stakeholder expectations. Follow our weekly CSRD series to stay ahead!

1. What is Value Chain Reporting Under CSRD?

• Beyond Direct Operations: Companies must assess environmental and social risks in their upstream (suppliers, raw materials) and downstream (product use, disposal) activities.
• Scope 3 Emissions Disclosure: Businesses must track and report indirect carbon emissions from their entire supply chain.
• Social & Human Rights Considerations: CSRD mandates transparency in labour practices, human rights, and supplier ESG performance.

2. Why is Value Chain Reporting Important?

• Regulatory Compliance: CSRD requires businesses to report material ESG risks beyond their direct operations.
• Investor & Stakeholder Trust: Investors seek transparent reporting on supply chain sustainability and climate impact.
• Competitive Advantage: Companies with sustainable supply chains are better positioned for future regulations and consumer preferences.

3. How to Manage Scope 3 & Supply Chain ESG Risks?

• Identify Key Suppliers & Partners: Map your entire value chain to determine ESG exposure points.
• Collect Supplier Data: Work with suppliers to gather emissions, labour practices, and environmental impact data.
• Implement Supplier ESG Standards: Set clear sustainability expectations and KPIs for vendors.
• Leverage Technology: Use ESG data platforms and reporting tools to streamline value chain monitoring.
• Engage in Continuous Improvement: Partner with suppliers to reduce emissions, enhance social responsibility, and drive innovation.

Coming Next Week:

CSRD & ESG Data Management – Building Robust Systems for Reliable Sustainability Reporting: CSRD compliance requires businesses to collect, analyse, and verify vast amounts of ESG data. Next week, we’ll explore how companies can build strong ESG data management frameworks to ensure accurate and auditable reporting.