EU CSRD and your supply chain: what you can, and cannot, ask for

If you work in sustainability or procurement at a company caught by the EU's Corporate Sustainability Reporting Directive (CSRD), you have probably already sent a questionnaire or two down the supply chain asking for emissions data, policies or certifications. The rules on how far you can push those requests have just got a lot clearer, and a lot stricter.

Why this matters now

Reporting under the CSRD relies heavily on the European Sustainability Reporting Standards (ESRS), which require companies to disclose not only their own impacts but also those connected to their value chain, from suppliers through to customers and end-users. 

In practice, that has meant large in-scope companies and groups asking every supplier, however small, to fill in detailed sustainability questionnaires so the reporting company can complete its own disclosures.

The European Commission's Omnibus I simplification package was designed, in part, to stop that burden cascading down the supply chain.

The headline change: a value chain cap

The Omnibus I Directive introduces a value chain cap. 

In short, it prevents companies in scope of the CSRD from requesting sustainability information beyond what is set out in a voluntary reporting standard from value chain companies with fewer than 1,000 employees. 

There is currently uncertainty over whether this value chain cap extends to companies and groups that will report under the separate regime for certain large non-EU groups with significant EU operations, and as the relevant reporting standard is still in draft form, this position should be monitored as it develops.

The voluntary standard in question is based on the Commission's Recommendation on voluntary sustainability reporting for non-listed SMEs, adapted by the Commission when it adopted the revised ESRS and voluntary reporting standards on 3 July 2026. 

Those standards are now going through a two-month scrutiny period with the Council and European Parliament, extendable by a further two months, so the final detail is not yet locked down.

What this means in practice

For sustainability and procurement teams, the practical effect is straightforward: your right to ask is no longer open-ended.

You can ask a smaller supplier (under 1,000 employees) for the data points covered by the voluntary reporting standard.

You cannot go further and request additional, bespoke or more granular sustainability information from that supplier simply because your own ESRS materiality assessment indicates that you need it.

The cap is calibrated to supplier size, not to your own reporting obligations. A supplier with 1,000 or more employees falls outside the cap, so the usual, broader value chain expectations under the ESRS can still apply to them and broader information can be requested from them.

Why the cap exists

The Commission's stated aim across the whole Omnibus I package is to cut the compliance burden on businesses and improve EU competitiveness. 

Uncapped downstream data requests were flagged as one of the most disproportionate side-effects of CSRD: large reporters were, in effect, exporting their reporting burden to smaller businesses that were never meant to be directly in scope and that are deemed not to have the necessary means to comply with all ESG information requests from their contracting parties. 

The value chain cap is the Commission's fix for that specific problem, rather than a change to the substance of what in scope companies themselves must disclose.

What has not changed

The value chain cap does not remove the underlying double materiality assessment that drives what you need to know about your value chain.

It further does not apply to suppliers with 1,000 or more employees. 

And it sits alongside, rather than replaces, other ESRS requirements on value chain reporting, including the topical standard on workers in the value chain.

What to do now

Three practical steps are worth taking while the details settle:

• Keep a watching brief on the scrutiny process for the revised ESRS and voluntary standards; the cap's practical scope depends on exactly what that voluntary standard ends up covering.
• Review existing supplier questionnaires against the voluntary reporting standard once finalised, and strip out anything that goes beyond it for suppliers under the 1,000-employee threshold.
• Segment your supplier base by headcount so you know which relationships the cap actually applies to.

The direction of travel is clear: CSRD is not backing away from value chain transparency, but it is drawing a firmer line around how much information smaller suppliers can be asked to provide. Getting your data requests inside that line once the relevant voluntary standard is available will save a difficult conversation with suppliers later.

For more information 

• ESG Quick Guide: EU Corporate Sustainability Reporting Directive (CSRD)

• EU CSRD: Commission adopts revised ESRS and voluntary reporting standard

• EU CSRD after the Omnibus: what has actually changed and what has not

• EU Omnibus I: CSRD and CS3D amendments finalised: what do you need to know?

• EU: changes to CSRD and CSDD under Omnibus I reach the finish line: video

• EU CSRD and Omnibus I: Transposition Tracker

• EU CSRD demystified materials