Value chain reporting based on voluntary standards

Over the past decade, the focus on environmental issues has grown exponentially, resulting in various global commitments initiatives aimed at transforming current institutional, economic and financial models.

As in scope companies adopt the Corporate Sustainability Reporting Directive (CSRD) and disclose sustainability data under the European Sustainability Reporting Standards (ESRS), their value chain partners face increasing demands for sustainability disclosures.

The Voluntary Standard for non-listed micro-, small-, medium-sized undertakings (VSME), developed by EFRAG, provides a simplified yet aligned framework for SMEs to report sustainability information, ensuring compatibility with the CSRD requirements of their clients and financial institutions.

By the end of this training, participants will:

• understand the VSME Standard and its alignment with CSRD & ESRS;
• identify which sustainability data large companies require from their value chain partners;
• learn how to apply the Basic & Comprehensive Modules of the VSME Standard;
• gain insights into data collection, reporting processes, compliance best practices;
• explore how sustainability reporting enhances access to finance and business partnerships.

The business case for sustainability reporting in the value chain

• Why SMEs need to disclose sustainability data to their business partners.
• How CSRD and ESRS create reporting obligations for large companies and their suppliers.
• Investor and financial institution expectations - The role of ESG in creditworthiness and financing.

Understanding the VSME standard and its two modules

• Basic module: minimum disclosures covering Environmental, Social, and Governance (ESG) data.
• Comprehensive module: additional metrics requested by banks, investors, and corporate clients.
• Alignment with ESRS: ensuring data compatibility for large companies reporting under CSRD.

Key sustainability data required from SMEs in large companies’ supply chains

• Environmental metrics - Carbon footprint (Greenhouse Gas (GHG) emissions, energy use, pollution, waste).
• Social metrics - Workforce conditions, health and safety, human rights policies.
• Governance metrics - Anti-corruption, transparency, and compliance with sustainability policies.

How to collect, report, and share sustainability data efficiently

• Step-by-step guide to using the VSME standard.
• Data collection tools & reporting templates to ensure accuracy.
• How to align sustainability disclosures with client expectations.

Opportunities and competitive advantages for SMEs

• Better access to contracts with large enterprises that prioritise ESG-compliant suppliers.
• Improved access to financing - How ESG reporting enhances loan approvals and investment opportunities.
• Strengthening brand reputation and market positioning.

Next steps for SMEs

• Assess which sustainability disclosures apply to your company.
• Engage with corporate clients to understand their sustainability data needs.
• Set up internal processes for ESG data collection and reporting.
• Explore EU funding and incentives for sustainability improvements.

This training is coordinated by Michael Horvath and Julien Jacqué, Director at PwC Luxembourg.

Michael has acquired a strong financial and regulatory audit as well as advisory background and significant experience leading projects in the asset management sphere.

In the recent past, Michael has been particularly involved in various regulatory projects related to the implementation of the EU regulatory framework for sustainable finance (i.e. SFDR, taxonomy regulation, CSRD) at entity and product level. Michael is involved in various other regulatory projects for clients, from DORA, AML/CFT regulation over CSSF circular 18/698 to MICA.

Julien is the EMEA Sustainability in Finance Transformation Leader at PwC and is actively engaged in PwC EMEA’s CSRD Centre of Excellence. With over 11 years of consulting experience, he currently oversees PwC LU’s Sustainability Reporting and Transformation services.

Julien holds a degree in Mechanical Engineering and Corporate Finance and has provided extensive support to clients in the implementation of data and technology solutions. Over the past few years, he has assisted both financial and corporate clients in their sustainability journey, spanning strategy, transformation, and reporting. Julien possesses both theoretical knowledge and practical expertise in ESG regulations such as CSRD, EU Taxonomy, EU ETS, and CBAM.