Why clearer sustainability reporting rules matter for supply chains
A Q&A with SLCP’s Policy Coordinator, Madalena Robalo Cordeiro
With a background in law, Madalena drives policy research and analysis at SLCP. Her work focuses on aligning the Converged Assessment Framework (CAF) with policy and legal frameworks and shaping SLCP's broader policy positioning.
Are the EU’s newly revised sustainability reporting standards clear enough to protect supply chain workers?
We sat down with our Policy Coordinator, Madalena Robalo Cordeiro, to discuss SLCP’s recent feedback to the EU Commission on the proposed revisions and why clear guidance is crucial to ensure human right violations in the supply chains don’t go unreported.
Q. What is happening with the EU sustainability reporting rules, and why does it matter?
Madalena: The European Commission is currently reviewing the European Sustainability Reporting Standards (ESRS), which sets out how companies report on sustainability issues under the Corporate Sustainability Reporting Directive (CSRD). As part of this review, the Commission is proposing changes that aim to simplify reporting requirements and reduce the administrative burden on companies.
This matters because the CSRD is a critical regulatory development towards mandatory corporate sustainability reporting. While it is an EU law, its impact extends far beyond Europe. Many companies operating in or supplying the EU market will need to report under this legislation and gather sustainability information from their business partners and suppliers around the world. That’s why it’s important that the reporting requirements for it stay clear and practical, and that any proposed changes strengthen rather than undermine its ability to capture supply chain realities and provide valuable data for all stakeholders.
Q. What was the key point raised in SLCP’s response to the proposed changes?
Madalena: One of the proposed changes to the rules is about reporting on human rights incidents connected to workers in value chains, requiring companies to report only ‘substantiated’ instances of such incidents. We understand the Commission wants to reduce the administrative burden for companies and ensure reliable data. Our concern is that this term ‘substantiated’ is not clearly defined.
Without clear guidance, companies may interpret and apply this requirement differently. This risks inconsistency in reporting and could lead to serious human rights issues in supply chains being overlooked or not reported, even where credible evidence exists.
Q. What does SLCP recommend to include to make sure human rights risks in supply chains are properly reported?
Madalena: SLCP recommends that the rules clearly explain what can be considered evidence of a human rights issue. The Commission should clarify that if an incident is identified based on data from trusted sources, it should be considered a ‘substantiated instance’ and reported. Trusted sources include credible social and labour assessments (such as SLCP’s Converged Assessment Framework (CAF)), independent public reports from governments and international organisations, and information gathered through meaningful engagement with workers and their representatives. This would help companies take a more consistent approach and make sure serious risks in supply chains are not missed.
Ultimately, we need reporting standards that push companies to reflect real-world supply chain conditions and provide meaningful data for all stakeholders.
Read our full response to the EU Commission Call for Evidence on the Revised European Sustainability Reporting Standards (ESRS) here.
