Value Chain Cap – What Suppliers Will No Longer Have to Provide

The starting point

Companies subject to the CSRD must report, and need corresponding information from their own value chain to do so. Suppliers forming part of that chain have often faced very different, individually designed requests from each CSRD-obligated business partner, and had to respond to each one separately.

What the Value Chain Cap actually does

The Value Chain Cap establishes that, to the extent a request from a CSRD-obligated company relates to its own CSRD reporting obligation, that company may generally only request the disclosures set out in the Voluntary Standard from a smaller business partner. The basis for this is the Voluntary Standard itself: a company providing the disclosures it contains has met the permitted requirements for that purpose.

Requests going beyond this would need to be flagged as exceeding the cap. Smaller partners generally have the right to decline such additional requests, for instance, where the information simply isn't available to them.

Important: the cap doesn't apply without limits

The Value Chain Cap is not a blanket protection against every information request. It applies specifically where a CSRD-obligated company needs data from a smaller business partner for its own CSRD reporting. Requests outside that specific purpose, for example, from banks or other companies for purposes unrelated to the requesting company's own CSRD obligation, fall outside the cap and remain possible.

This distinction matters, to avoid a misleading impression: having prepared a report under the Voluntary Standard shouldn't be taken to mean that no bank, investor or customer could ever request further information. The cap specifically limits CSRD-related requests along the supply chain, not every conceivable request from every direction.

Why applying it can still be worthwhile

Where the Comprehensive Module is applied, the EU's expectation is that much of what is typically requested by banks, investors or other business partners is already largely covered. That doesn't mean there couldn't be further or different requests, but the likelihood of covering a large share of incoming requests with an existing, structured basis is likely to increase noticeably.