The EU's new limit on supplier ESG requests: what your customers can now ask you for

What changed this year

Two pieces of EU law set this up. The Omnibus I Directive (Directive (EU) 2026/470), agreed on 24 February 2026, narrowed the CSRD so that only companies with more than 1,000 employees and net turnover above €450 million have to publish a sustainability report. It also created what the law calls the value chain cap: a limit on what those companies may demand from suppliers with an average of 1,000 employees or fewer.

The directive left the detail to the Commission. Commission Delegated Regulation (EU) 2026/1560, adopted on 3 July 2026 and published on 21 September 2026, sets out a voluntary reporting standard for smaller firms and, in its Annex II, the exact datapoints the cap covers. The standard is based on VSME, the voluntary standard for small and medium-sized businesses that EFRAG developed and the Commission recommended in July 2025.

EU countries have until 19 March 2027 to write the directive's reporting changes into national law. The cap itself applies from financial years beginning on or after 1 January 2027.

Whether the cap covers your business

The directive calls a supplier a protected undertaking if it is in the value chain of a company that reports under the CSRD and had an average of no more than 1,000 employees during the previous financial year. Nothing in that definition requires the supplier to be based in the EU, so a UK manufacturer selling to an EU company in scope can rely on it.

Your customer can rely on a simple self-declaration from you that you are under the 1,000 employee line. It does not have to check it, unless the statement is obviously wrong.

Three limits matter:

• The cap only applies to requests made for the customer's CSRD report. Requests for other reasons, such as the customer's risk management or its due diligence duties, are outside it.
• You can still share more if you choose to. The cap stops customers requiring extra data, not you volunteering it.
• UK requests are unaffected. A Carbon Reduction Plan for a central government contract, a CDP questionnaire or a UK customer's own reporting sit outside the EU rule.

What customers can ask you for

For a supplier with more than 10 employees, Annex II of the regulation lists the following. Some items come from the standard's Basic module and some from its Comprehensive module.

Two things stand out. Scope 3 emissions are not on the list, so a customer cannot require your Scope 3 figure for its CSRD report. And the emissions asked for are the ones you can work out from your own fuel and electricity bills.

If a request goes beyond the list

The directive gives protected suppliers a right to decline information beyond the voluntary standard when it is requested for CSRD reporting. It also puts duties on the customer:

• It must tell you which items in its request go beyond the standard, and that you have a legal right to decline them.
• It must not write contract terms requiring more than the standard for CSRD purposes. Any such term is not binding, although the rest of the contract stands.
• If it reports its supply chain using only data within the cap, it is treated as having met its own reporting duty, so it has no legal need to push you further.

Declining is a right, not a requirement. If a customer asks for something you already hold and are happy to share, sharing it may help the relationship. The point is that you can now plan around a known list instead of a new questionnaire from every buyer. If a contract clause is in dispute, take advice from your own legal adviser.

How to get ready before the 2027 requests arrive

1. 01Check your headcountWork out your average number of employees for the last financial year and keep a short signed statement ready to send customers.
2. 02Pull a year of energy billsTotal your electricity, gas and other fuels in MWh. The standard asks for a split between renewable and non-renewable electricity as shown on your utility bills, where you can get it.
3. 03Calculate Scope 1 and 2Apply the UK government's greenhouse gas conversion factors, published each year by the Department for Energy Security and Net Zero. Its UK grid electricity factor gives the location-based Scope 2 figure the standard asks for.
4. 04Collect the rest from records you holdWater from water bills, waste weights from your waste contractor's transfer notes, and workforce figures from payroll and your accident book.
5. 05Keep the evidence behind each figureStore the bills, the factor used and the calculation together. From your second year of reporting, the standard expects last year's figures alongside this year's, so a clear trail saves work later.

Our footprint guide walks through the energy and emissions steps in more detail.

How ESGen helps

The ESGen platform has a VSME lens. It calculates Scope 1 and 2 from your own bills using the UK government conversion factors, keeps each bill in an evidence library, records every calculation in a log and locks a reporting period once you sign it off. Our team prepares VSME reports and answers customer questionnaires with you from the same records.

The platform does not produce CSRD reports, and it does not calculate Scope 3 beyond the upstream energy share it adds automatically. ESGen helps prepare structured reporting evidence; it does not give legal advice and no software makes a business compliant on its own. See ESG reporting for more, or read what ESG reporting covers for the wider picture.

If an EU customer has sent you a questionnaire, send it to our team and we will show you which questions fall inside the new list.