EU Compliance & Market Access
ESG Evidence
Connecting sourcing decisions to disclosure obligations — Scope 3 data, traceability, and audit-ready evidence chains.
Directive (EU) 2022/2464
CSRD & ESRS Reporting
The Corporate Sustainability Reporting Directive requires large EU companies to disclose sustainability information under European Sustainability Reporting Standards (ESRS).
- Phase-in timeline
- In force 5 January 2023, then reshaped twice: the stop-the-clock directive (2025/794) pushed waves 2 and 3 back two years, and the Omnibus I directive (in the Official Journal 26 February 2026) narrowed scope to companies with over 1,000 employees AND over EUR 450m turnover, from FY2027. Listed SMEs fell out of mandatory scope.
- ESRS 2
- General disclosures — governance, strategy, materiality assessment.
- ESRS E1
- Climate — Scope 1, 2, 3 emissions, transition plan.
- ESRS S2
- Workers in the value chain — covers supplier labour conditions, relevant for Thailand sourcing.
- ESRS G1
- Business conduct — anti-corruption, supplier relationships.
- Double materiality
- Companies must assess both financial materiality (risks/opportunities to the company) and impact materiality (company's impacts on people and environment).
- Assurance
- Limited assurance required from FY2024; reasonable assurance planned from 2028.
GHG Protocol — Scope 3 Standard
Scope 3 & Supplier Emissions Data
Category 1 (purchased goods and services) is typically the largest Scope 3 category for companies sourcing physical products. Supplier data collection is the core challenge.
- GHG Protocol Scope 3
- 15 categories. Category 1 covers upstream emissions from purchased goods and services.
- Calculation methods
- In order of preference: supplier-specific data, hybrid method, average-data method, spend-based method.
- Thailand → Nordics sea freight
- Approximately 0.8–1.2 kg CO₂e per kg cargo (GLEC Framework estimate, deep-sea container).
- Air freight multiplier
- Approximately 50–70× sea freight emissions intensity — relevant for high-value or time-sensitive pet food ingredients.
- ESRS E1 requirement
- Scope 3 disclosure required where material — Category 1 is material for most physical goods companies.
- Data gap reality
- Fewer than 30% of EU companies report supplier-specific Scope 3 data. Spend-based proxies dominate in current practice.
Documentation · Traceability · Assurance
Evidence Architecture
What a defensible evidence chain looks like under CSRD, CSDDD, and external assurance — and where most companies currently fall short.
- Minimum evidence set
- Sustainability policy, supplier code of conduct, signed supplier declarations, audit reports (SMETA/BSCI), corrective action plans, emissions calculation methodology.
- CSRD assurance
- External auditor must be able to trace disclosed data back to source documents. Assertions without underlying evidence will not pass limited assurance.
- Common gaps
- Spend-based Scope 3 with no supplier engagement, audit reports older than 24 months, no documented CAP closure.
- CSDDD expectation
- Documented due diligence process, not just a policy statement. Must show identification, prevention, and remediation steps.
- Digital traceability
- ESRS requires disclosure of traceability systems where relevant — blockchain, QR-code provenance, and digital product passports are emerging approaches.
- Best practice
- Maintain a compliance evidence register — a living document mapping each obligation to its evidence source and review date.
Country risk intelligence
View sourcing country risk profiles →Current state, after Omnibus I
Who actually reports now, and what a supplier can be asked
The 2025–26 simplification wave settled the scope questions this page used to hedge. CSRD now binds EU companies with more than 1,000 employees and over €450m turnover (both conditions), from financial years starting 2027, plus non-EU groups above €450m EU turnover with a large EU subsidiary or branch; the old 250-employee test and mandatory listed-SME reporting are gone[1][2]. CSDDD was cut harder: scope rose to 5,000 employees and €1.5bn turnover, the EU-level civil liability regime was deleted, and application moved to July 2029[1]. Member-state transposition runs to 2027–28, so national detail can still move.
For non-EU suppliers the most consequential change is the value-chain cap. An in-scope EU buyer may no longer demand sustainability data from value-chain partners with up to 1,000 employees beyond what the voluntary VSME-aligned standard covers, and a protected supplier has a statutory right to refuse requests beyond it[2]. A Thai or Indonesian supplier's CSRD exposure is therefore indirect and now bounded: the questionnaire deluge has a legal ceiling, and knowing where that ceiling sits is itself negotiating leverage.
The evidence problem this page describes survives the simplification: fewer companies report, but those that do still need a defensible chain from claim to record, and their suppliers still carry the part of it the buyer cannot see. The cap changes how much can be asked, not whether the answer has to be true.
[1] Council of the EU: Council signs off simplification of sustainability reporting and due diligence requirements (24 February 2026); stop-the-clock Directive (EU) 2025/794.
[2] Morrison Foerster: EU Sustainability Omnibus I adopted (December 2025); Latham & Watkins: Omnibus published in the Official Journal (2026).