The value chain is a crucial concept within the CSRD and ESRS.

Sustainability reporting goes beyond the borders of financial reporting, and includes your complete value chain. When reporting about the sustainability of your organisation, you need to include information about all material impacts, risks and opportunities (IROs) including those that arise or may arise in the context of its business relationships in the upstream and downstream value chain. 

Each company reporting under the CSRD has to showcase "reasonable effort" in collection data in the value chain for their reporting.

A number of questions arise from this.

• What is the value chain?
• Where does it start and end?
• What do you need to include in your reporting?
• What does reasonable effort mean?

In the next video, we dive deeper into the concept of value chain, the relation to your sustainability reporting and the implementation.

Disclaimer: The Value Chain Implementation Guidance is a suggestion by EFRAG, and should not be seen as the holy grail for materiality assessments. For each value chain, in each company, the exercise of judgment is needed to determine the actual boundaries. Currently the VCIG (Value Chain Implementation Guidance) is under review and not finalised.