The EU is putting a ceiling on your sustainability questionnaire

From 2027, large companies will face a new limit on how much sustainability information they can require from many smaller suppliers for CSRD reporting purposes.

For years, one of the most common responses to missing sustainability data has been simple: ask the supplier.

• Need emissions information? Send a questionnaire.
• Need workforce data? Add another section.
• Need environmental metrics, policies, targets or supporting evidence? Put them into the supplier portal.

For large companies with thousands of suppliers, this has created an ever-expanding flow of sustainability requests down the value chain. For suppliers, it often means answering similar questions repeatedly for different customers, in different formats and with different definitions.

The EU has now decided that there needs to be a limit.

Directive (EU) 2026/470 introduced what is generally referred to as the value-chain cap. For CSRD reporting purposes, companies will be restricted in the sustainability information they can require from undertakings in their value chain that do not exceed 1,000 employees.

That is a significant change, but there is an important detail that could easily be missed:

The cap is not the same thing as the full Voluntary Standard.

The Commission's delegated regulation states that the value-chain cap consists only of the datapoints listed in Annex II.

That distinction matters.

A supplier can now say no

The new rules go further than simply encouraging companies to reduce the burden placed on smaller suppliers.

Directive (EU) 2026/470 gives protected undertakings a right to decline requests for sustainability information that go beyond the permitted limit when those requests are made for CSRD reporting purposes. The protection also cannot simply be overridden through contract.

Where a company asks for information beyond the cap, the Directive requires it to identify which information exceeds the limit and inform the supplier of its right to decline. This changes the dynamic considerably.

Until now, sustainability information requests have often been treated as part of the commercial relationship: We need this information, therefore please provide it.

The new rules introduce a different question: Are we actually entitled to require this information from this supplier for this purpose?

That distinction is likely to become increasingly important.

The Voluntary Standard and the cap are not the same thing

On 3 July 2026, the Commission adopted a delegated regulation establishing a new sustainability reporting standard for voluntary use by undertakings outside mandatory CSRD reporting. The standard retains the familiar Basic and Comprehensive structure and covers a broad range of environmental, social and governance information.

But the value-chain cap is narrower.

Article 3 of the delegated regulation states that the cap consists only of the datapoints specified in Annex II.

That creates an important difference between:

information a company may choose to report voluntarily

and

information a CSRD reporter may require from that company under the value-chain cap.

Those are not the same thing.

One useful example is greenhouse-gas reporting. The full Voluntary Standard addresses Scope 3 emissions. The Annex II cap does not.

Scope 1 and Scope 2 emissions are included for certain protected undertakings. Scope 3 is not.

That is the kind of detail that could become highly significant in supplier relationships. A company cannot simply assume that because a datapoint appears somewhere in the Voluntary Standard, it automatically falls within the value-chain cap.

The smallest companies receive even greater protection

Annex II also distinguishes between undertakings with more than 10 employees and those with 10 employees or fewer. For the smallest undertakings, several environmental disclosures included for larger protected companies fall outside the cap. The result is therefore not a single universal sustainability questionnaire for companies below 1,000 employees. The amount of information that may be requested depends, among other things, on the size of the undertaking. That tells us something important about the direction of EU policy.

The principle is no longer simply:

smaller companies should report less.

It is increasingly:

larger companies should also ask smaller companies for less.

That is a subtle but important shift.

This is not a general ban on ESG information requests

There is another distinction companies will need to understand carefully. The value-chain cap applies to information requested for the purpose of sustainability reporting under the Accounting Directive. It does not automatically prevent companies from requesting information for other legitimate purposes.

For example, information may still be required under:

• due-diligence legislation;
• product-specific rules;
• sector regulation;
• contractual requirements;
• procurement standards;
• financing arrangements;
• other EU or national legislation.

The same sustainability question could therefore have a very different legal status depending on why it is being asked. A question concerning forced labour might be connected to CSRD reporting in one context and due diligence in another. A request for emissions data could relate to sustainability reporting, product footprinting, procurement requirements or financing.

The words may be identical, but the legal basis may not be. That makes the value-chain cap more nuanced than a simple rule saying that companies can no longer ask SMEs for ESG information.

Why this matters for procurement teams

The effect is likely to be felt well beyond sustainability departments. Procurement teams frequently act as the transmission mechanism for ESG information requests. Supplier onboarding forms, annual assessments, procurement platforms and third-party questionnaires have gradually absorbed more and more sustainability information.

The value-chain cap means companies should now examine those requests more carefully. In particular, organisations will need to understand which questions are connected specifically to CSRD reporting and which exist for other reasons. That review may uncover a problem many companies already know exists:

• their supplier questionnaires have grown incrementally over time.
• A question is added for reporting.
• Another is added for due diligence.
• Another comes from procurement.
• Another comes from a customer requirement.
• Another comes from a rating provider.

Eventually, nobody remembers why half the questions are there, and the value-chain cap makes that increasingly difficult to ignore.

The 400-question ESG questionnaire may be reaching its limit

This does not mean that complex supplier assessments will disappear. Companies will continue to need information from their value chains. CSDDD, product regulation, climate accounting, procurement requirements, financing and sector-specific rules will continue to create legitimate information needs.

But the regulatory direction is becoming clearer.

More sustainability regulation does not necessarily mean more questions for every supplier.

That matters because supplier reporting has become one of the least efficient parts of the sustainability system. A supplier may provide almost the same information repeatedly to dozens of customers.

• One customer asks for emissions.
• Another asks for energy consumption.
• A third asks about workforce policies.
• A fourth wants the same information in a proprietary assessment format.

The costs multiply quickly, particularly for smaller companies. The value-chain cap is an explicit attempt to place some discipline around that process.

A common information boundary begins to emerge

The wider significance may be greater than the individual datapoints contained in Annex II.

For the first time, EU sustainability law is beginning to define a standard boundary around the information that larger companies can demand from smaller value-chain partners for reporting purposes. If companies increasingly work from the same regulatory information envelope, the pressure for hundreds of bespoke supplier questionnaires should begin to fall.

What companies should do now

The new rules do not require companies to redesign their entire supplier-reporting process overnight, but there are some obvious areas worth reviewing before 2027.

• First, companies should identify which sustainability information they currently request from suppliers specifically for CSRD reporting.
• Second, those requests should be compared with the Annex II value-chain cap rather than with the full Voluntary Standard.
• Third, companies should review whether different questionnaires have gradually combined reporting, due-diligence, procurement and other information needs without clearly separating their purposes.
• Finally, procurement and sustainability teams should prepare for suppliers to challenge requests that they believe exceed the legal limit.

That is likely to be one of the practical consequences of the new regime.

One important timing point

There is also a legal-status distinction to keep in mind. Directive (EU) 2026/470 is already in force at EU level, although Member States still need to transpose relevant provisions into national law. The Commission adopted the detailed Voluntary Standard and Annex II value-chain cap on 3 July 2026.

The delegated regulation itself provides that it enters into force after publication in the Official Journal, and the value-chain-cap provisions are intended to apply for financial years beginning on or after 1 January 2027.

As of 14 September 2026, companies should therefore prepare for the regime while continuing to verify the final Official Journal publication and national implementation.

This is bigger than simplification

The value-chain cap is usually presented as part of the EU's effort to reduce sustainability-reporting burdens. That description is correct, but incomplete. The more important change may be conceptual.

The EU is beginning to define where a company's right to demand sustainability information from another company should stop.

That is a new regulatory boundary.

For years, sustainability reporting has expanded partly by pushing information requirements further and further down the value chain. The value-chain cap introduces the opposite idea:

Sometimes the correct answer is not to ask the supplier for more.

Sometimes the limit itself is part of the regulation.

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