(Sponsored) Sustainability is becoming a key driver in business and consumer decisions, and the Corporate Sustainability Reporting Directive (CSRD), part of the European Green Deal, is the latest continuation of this trend. The directive sets a new standard regarding non-financial reporting, demanding greater transparency on environmental, social and governance (ESG) issues. Considering the complexity of today’s global markets, the effects on manufacturers will be significant.
To fully appreciate the CSRD’s impact, we need to first understand the concept of “value chains.” While the term “supply chain” focuses on the upstream of a company’s operations, meaning where raw materials are sourced and how they are transformed into products, the value chain includes downstream processes as well.
The value chain also includes direct activities involved in creating a product and their supporting functions. Let’s look at the creation of a smartphone. In this example, the value chain would include the mining for metal ore, the manufacture of the phone and the software development that makes it functional. But that’s not all — the value chain would then extend to the teams that market and sell the phones, and even support services.
This view of a business, which takes the widest lens possible,…
