CSRD Value Chain Requirements: What Procurement Leaders Need to Know Now

The Corporate Sustainability Reporting Directive (CSRD) is reshaping the global reporting landscape. With its expanded scope, rigorous disclosure requirements, and value-chain-wide visibility expectations, the CSRD demands far more from companies than any previous regulation — especially when it comes to sustainable procurement.

Whether your organization is operating within the EU or connected to it through suppliers, customers, or multinational operations, CSRD compliance is becoming a value chain mandate, not just an internal reporting exercise.

This blog explores the top three value chain challenges under the CSRD — and how companies can prepare strategically.

The CSRD: A Global Shift Toward Deep Transparency

Building on the NFRD, the CSRD expands mandatory ESG disclosures to more than 50,000 companies across the EU and beyond. Underpinned by the European Sustainability Reporting Standards (ESRS), it requires companies to report not only on their own operations, but also on their supply chains, impacts, dependencies, and risks.

This expansion means thousands of companies in the US, India, Canada, the UK, Japan, and other regions will soon be affected — either directly or through customer-driven data requests. However, studies show most organizations remain underprepared, with limited supplier visibility and resource gaps posing major challenges.

1. Applying the Double Materiality Lens Across the Entire Value Chain

One of the CSRD’s most transformative requirements is the adoption of double materiality, requiring companies to assess both how ESG topics impact business performance and how business activities impact people and the planet across the value chain.

In practice, impact materiality becomes the starting point, requiring structured mapping of environmental and social risks across suppliers, contractors, and upstream and downstream partners.

2. Setting Measurable ESG Targets and Demonstrating Progress

Under the CSRD, disclosure alone is insufficient. Companies must define clear, time-bound, outcome-oriented ESG targets aligned with their identified material risks and impacts across the value chain.

3. Reporting Scope 3 Emissions and Supplier Decarbonization Measures

Scope 3 emissions often account for 70–90% of a company’s total carbon footprint and will be material for most CSRD reporters. The directive requires category-level Scope 3 reporting, transparent methodologies, value-chain decarbonization actions, and alignment with a 1.5°C pathway.

Smart Compliance Requires a Holistic Procurement Approach

The CSRD is not just a reporting requirement — it is a catalyst for operational transformation. Leading companies are embedding ESG into sourcing strategies, supplier engagement, contracting, and performance management while investing in scalable technology and partnerships.

Research from EcoVadis and Bain & Company shows that organizations with mature sustainable procurement programs achieve stronger profitability, lower risk exposure, and higher employee engagement.

Final Takeaway

Succeeding under the CSRD requires shifting the mindset from collecting data to using data for better decision-making. Companies that invest in supplier collaboration and integrate ESG into procurement strategy will not only comply, but build resilient, ethical, and future-ready value chains.