CSRD value chain estimates When direct ESRS data is not available

Yes. Under the 2023 ESRS, the sustainability statement includes material upstream and downstream value chain information where needed to explain material impacts, risks, and opportunities. If the undertaking cannot collect required value chain information after reasonable efforts, ESRS 1 requires it to estimate the information using reasonable and supportable information, including sector-average data and other proxies.

Estimates still follow materiality. ESRS 1 extends value chain information only to the parts of the value chain where the matter is material, and estimates must meet the qualitative characteristics of sustainability information.

The revised standards are adopted but not yet in force. Once applicable, revised ESRS 1 allows the undertaking to use information collected directly from value chain counterparties or estimates, depending on the practicability and reliability of the necessary input. Estimates may use internal or external information, including indirect sources, sector averages, sample analyses, market or peer data, spend-based data, and other proxies.

The revised disclosure rule also changes the description of an estimated metric. Revised ESRS 2 GDR-M requires the metric, unit, calculation method, sources, and, where relevant, the estimation method with significant assumptions and limitations. For a value chain metric, disclose reliance on indirect sources or proxies and planned actions to improve data quality where applicable.

Directive (EU) 2026/470 requires national law to treat a value chain undertaking that does not exceed an average of 1,000 employees in the preceding financial year as a protected undertaking. For CSRD reporting requests, national measures must give that undertaking the right to decline information exceeding the voluntary standards under Article 29ca. The cap does not require the protected undertaking to provide sustainability information, and it does not limit requests made for another purpose, including a separate EU due-diligence duty.

A reporting undertaking may rely on the value chain undertaking's self-declaration of protected status unless it knows, or can reasonably be expected to know, that the declaration is manifestly incorrect. For the first three years in which the reporting undertaking is subject to CSRD reporting, if necessary value chain information is unavailable, it must explain its efforts to obtain the information, why it could not obtain all of it, and its plans to obtain it later. After that period, the amended Directive requires direct information or estimates as appropriate. Member States must transpose these amendments by 19 March 2027, so national implementation must be checked.

Under the 2023 ESRS, when metrics include value chain data estimated from indirect sources, the disclosure must identify the metric, explain the basis for preparation, describe the resulting level of accuracy, and, where applicable, describe planned actions to improve accuracy.

ESRS also addresses estimation and outcome uncertainty. The disclosure should let users understand the significant uncertainties, assumptions, and limits that affect the reported quantitative metric or monetary amount.

The documentation should show why an estimate was needed under the applicable ESRS version and why the chosen proxy is supportable for the material matter. It should let reporting, finance, procurement, sustainability, and assurance teams follow the trail from source data to disclosure.

A useful file separates unavailable primary data from the estimation method. For example, a supplier non-response problem is different from a downstream-use problem where measuring each end user would be impracticable and a product-use estimate is more relevant.

Estimates are acceptable only within the applicable ESRS reporting logic. They cannot replace the materiality assessment, conceal a known data gap, or support precision that the inputs do not provide. Under the 2023 ESRS, sector-average data or other proxies must still produce information that meets the qualitative characteristics of sustainability information.

EFRAG IG 2 also warns that quantitative measures of indirect impacts are not always the most relevant disclosure. If a calculated footprint would be too arbitrary or would not explain the undertaking's contribution to managing a material impact, teams should reassess whether another ESRS disclosure, narrative explanation, policy, action, target, or entity-specific metric better explains the matter.