When the European Union introduced at first the Corporate Sustainability Reporting Directive (CSRD), they didn’t only discuss the double materiality assessment for companies but most importantly they introduced new practices for managing the supply chain (more broadly called “value chain”). 

It was an important step in the context of ESG regulations because the Directive introduced a new obligation: conducting assessments of all the actors that are part of the value chain. 

Three major direct impacts: 

Reporting obligations. Requirement for companies to collect and disclose detailed information on their environmental and social impacts, as well as those of entities involved in the supply chain (e.g., CO2 emissions, use of natural resources, working conditions).

Implementation of the ESRS. The CSRD mandates the adoption of the European Sustainability Reporting Standards (ESRS), which require standardized and comparable reporting of ESG (Environmental, Social, and Governance) performance. Companies must therefore establish new processes and data collection systems involving all levels of the supply chain. This entails a comprehensive review of existing systems, the introduction of new technologies for data collection and analysis, and staff training on how to manage and report information in accordance with the new standards. 

External verification. Information reported under the CSRD must be verified by independent third parties, increasing the importance of accurate and........

© Eurasia Review