The CSRD and Supply Chain Governance

The Corporate Sustainability Reporting Directive (CSRD) is a new EU legislative directive that aims to standardize sustainability reporting requirements for large and listed European Union (EU) companies. The CSRD and accompanying [draft] EU Sustainability Reporting Standards (ESRS) set out new reporting requirements that emphasize the importance of reporting on the value chain.

The value chain is the sequence of activities, resources and relationships that a company undertakes to deliver its products or services to its customers. The value chain includes everything from raw materials extraction and production to distribution, use and disposal of products (end of life). The CSRD and ESRS recognize that companies' sustainability impacts extend beyond their immediate operations and into their value chains, to actors both upstream and downstream.

The CSRD and ESRS framework will require companies to report on their value chain by disclosing information on their suppliers, customers, and other stakeholders. This includes information on the sustainability performance of suppliers and other stakeholders in the value chain, as well as the impact of a company's products and services on the environment and society.

Klappir’s Supplier Assessment tool enables companies to assess and evaluate the sustainability of their entire value chain using ESG questionnaires to evaluate performance across a variety of ESG metrics and topics. Users maintain a clear overview of the assessment surveys they have sent throughout their value chain and track progress. Suppliers and other stakeholders get notified via email and can easily comply, free of charge.

By reporting on the value chain, companies can better understand their sustainability impacts and identify opportunities for improvement. The CSRD's emphasis on value chain reporting also helps to promote transparency and accountability throughout the supply chain, which is essential for building trust with stakeholders and ensuring sustainable business practices.

Overall, the CSRD's focus on reporting on the value chain is a significant step forward in promoting sustainable business practices in the EU. It provides a framework for companies to understand and manage their sustainability impacts throughout their value chains, which is essential for creating a more sustainable and responsible business environment.

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