- The value chain cap prevents a CSRD-subject company from requiring a company with 1,000 employees or fewer to provide sustainability information beyond the list set by the VS (formerly VSME).
- It applies to financial years starting on or after January 1, 2027, under Delegated Regulation (EU) 2026/1560.
- The list is shorter for companies with 10 employees or fewer: it contains no environmental data at all.
- A protected company can refuse any request that goes beyond the cap, and the client must flag the questions concerned.
ESG questionnaires from large clients have multiplied with the CSRD value chain, each with its own format and requirements. The VSME, now the VS (Voluntary Standard), puts a limit on this trickle-down effect. From financial year 2027, VS defines the maximum a CSRD-subject client can require from a supplier with 1,000 employees or fewer for its own reporting.
What the text says
The Omnibus I Directive (EU) 2026/470 created the value chain cap. Delegated Regulation (EU) 2026/1560, in force since September 24, 2026, makes it operational. Its Article 1 defines the cap as the upper limit of sustainability information a CSRD-subject company may require from companies in its value chain that do not exceed an average of 1,000 employees over the previous financial year. Its Article 3 refers to Annex II, which lists the covered datapoints one by one.
Three rules complete the mechanism:
- the protected company has a legal right to refuse to provide information that goes beyond the cap;
- a client that makes a broader request must specify which information goes beyond the cap and remind the company of its right to refuse;
- voluntary sharing remains possible, particularly for information commonly exchanged within a sector.
Who is protected by the cap?
Any company in the value chain, supplier or customer, that does not exceed an average of 1,000 employees over the previous financial year. The text sets no revenue criterion, and the cap applies whether or not the company publishes a VS report. A mid-sized company with 800 employees is protected just like a 40-person SME. The revised ESRS also specify that the limit applies to companies outside the European Union: a 300-employee supplier in Asia or the US is protected just like a French one. To check your own position under the CSRD itself, the CSRD thresholds remain more than 1,000 employees and more than €450 million in net turnover.
Database: CSR Questionnaire
Centralize your answers to handle your clients' ESG requests faster
The data a client can require
Annex II only includes the so-called essential datapoints of VS. It sets two lists depending on the size of the protected company. The other datapoints in the standard, such as policies (B2), pollution (B4), biodiversity (B5), corruption (B11), climate targets (C3) or climate risks (C4), can still be reported voluntarily but cannot be required.
| Disclosure | Datapoint | 10 employees or fewer | More than 10 employees |
|---|---|---|---|
| B1 | Module selected, individual or consolidated basis, general information (legal form, NACE code, balance sheet, turnover, headcount, country, site geolocation) | Yes | Yes |
| B3 | Total energy consumption (MWh) and gross Scope 1 and 2 GHG emissions | No | Yes |
| B6 | Total water withdrawal | No | Yes |
| B7 | Application of circular economy principles, total weight of waste (hazardous and non-hazardous), share of waste recycled or reused | No | Yes |
| B8 | Employees by contract type and by gender | Yes | Yes |
| B9 | Number and rate of work-related accidents | Yes | Yes |
| B10 | Pay at or above the applicable minimum wage, share of employees covered by collective bargaining, training hours per employee | Yes | Yes |
| C1 | Products and services, markets, main business relationships | No | Yes |
| C5 | Employee turnover rate | No | Yes |
| C6 | Code of conduct or human rights policy, complaints-handling mechanism | No | Yes |
| C7 | Confirmed incidents in own workforce and in the value chain | No | Yes |
For companies with 10 employees or fewer, the cap is therefore limited to the company's identity and a few social datapoints. Each datapoint is detailed in our list of VSME indicators.
What the cap does not cover
The cap only covers information collected for CSRD reporting. Several requests can therefore still go beyond VS:
- information required by other EU or national laws, such as the deforestation regulation (EUDR) or the forced labor regulation;
- contractual obligations that do not exceed the content of VS, and exchanges set out in contracts for purposes other than CSRD reporting;
- assessments you choose to take on your own initiative, such as EcoVadis or CDP.
Banks, investors and insurers are not bound by the cap for their own needs. The regulation does, however, encourage them to limit their requests to companies with 1,000 employees or fewer to the content of VS.
How to answer a questionnaire that goes beyond the cap
The most effective approach is to prepare an up-to-date VS report and send it in response to questionnaires. It covers everything a CSRD client can require, in a standard format the client knows how to read. For questions that go further, you have three options: answer them if the information is available and useful to the business relationship, refer the client to your VS report, or decline based on Article 3 of the delegated regulation. For suppliers, a VS report thus becomes the basis for answering the ESG requirements of large companies, and Ditto helps you answer compliance questionnaires from a single set of data.
The 100 ESG Indicators to Follow
Identify the indicators your clients and ESG standards expect, VS included
For environmental data, the cap does not remove the value of tracking it. Energy and Scope 1 and 2 emissions can be required from 11 employees, and they carry weight in assessments such as EcoVadis. Our full breakdown of what changes with VS covers the rest of the text.
Prepare a single answer for your CSRD clients
A Ditto expert helps you build a VS report that covers your clients' requests
FAQ
What is the value chain cap?
When does the cap apply?
Do I need to publish a VS report to be protected?
Can my client still send me its own ESG questionnaire?
Does the cap apply to EcoVadis?
VSME Value Chain Cap: Key Takeaways
| Element | Key takeaway |
|---|---|
| Legal text | Delegated Regulation (EU) 2026/1560, Article 3 and Annex II |
| Application | Financial years starting on or after January 1, 2027 |
| Protected companies | 1,000 employees or fewer on average over the previous financial year, with no revenue criterion, inside or outside the EU |
| Data that can be required | Annex II list: B1, B3, B6, B7, B8, B9, B10, C1, C5, C6, C7 above 10 employees |
| 10 employees or fewer | B1, B8, B9 and B10 only, with no environmental data |
| Supplier rights | Refuse requests beyond the cap, be told which questions go beyond it |
| Out of scope | EUDR, forced labor, contracts outside CSRD reporting, voluntary assessments such as EcoVadis |
