- The CSRD extends reporting to the entire value chain (upstream and downstream), not just the direct perimeter.
- It rests on double materiality, with a major stake on Scope 3 (often over 70% of emissions).
- Expected data: quantitative and qualitative indicators plus methodology and traceability.
- Preparation: map and prioritize critical suppliers, then digitalize data collection.
The "value chain" in the CSRD
The CSRD requires large European companies to publish ESRS-based reports that go beyond internal activities: they cover the full value chain, i.e. the upstream and downstream activities, products and relationships that influence sustainability performance. This includes suppliers, subcontractors, distributors and end customers, based on their contribution or exposure to ESG impacts.
Why the CSRD emphasizes the value chain
The approach rests on double materiality: impact materiality (how the company affects people and the environment) and financial materiality (how those factors affect economic performance). This dual lens requires analyzing issues beyond direct control, in the value chain, where indirect impacts can be most significant (Scope 3 emissions, human rights, biodiversity).
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Who is concerned in the value chain
Value-chain requirements primarily hit large companies and public-interest entities, but their effects reach the SMEs and suppliers that supply them, regularly asked to provide reliable ESG data. The reporting perimeter covers upstream (raw materials, services, logistics), downstream (customers, distributors, end users) and indirect activities creating dependencies. A structured sustainable procurement approach is key to collecting this data.
Concrete reporting requirements
The ESRS specify the expected information: quantitative indicators (GHG emissions, resource use, equality), qualitative information (policies, due diligence, governance, remediation) and descriptive data on identified risks, impacts and dependencies. Companies must justify their assessment methodology, explain coverage limits (e.g. estimated data), and demonstrate source traceability.
Mapping value-chain risks
Preparation involves a structured mapping of risks, impacts and dependencies: identify value-chain actors by economic and ESG importance; assess critical risks (environment, human rights, corruption) via a materiality matrix; prioritize by linking material issues to internal policies and sustainability objectives.
Tools and best practices
Success rests on digitalizing and automating supplier tracking: centralize ESG data in a single management platform, set up due diligence procedures (questionnaires, audits, contractual commitments), add collaborative tools for data collection and verification, and train internally to standardize methods.
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CSRD value chain: key takeaways
| Key point | In short |
|---|---|
| Definition | All activities, partners and flows creating or suffering ESG impacts, upstream and downstream |
| CSRD objective | Report global impact under the double materiality principle |
| Expected data | Quantitative (emissions, resources, HR) and qualitative (policies, risks, governance) |
| Actors concerned | Large companies (direct) and SME suppliers (indirect contribution) |
| Key tools | ESG platforms, due diligence, collection automation, ESRS/VSME templates |
