COMPLIANCE DEEP DIVE

Your Customer Wants Sustainability Data: The CSRD Value-Chain Cap, ESRS E5 and Why DPP Supplier Data Is Different

Published 20.10.2026 · Reading time ~16 min · by Lior Gabriel Graetz · LG Fashion Labs

1. Who must report under the CSRD after Omnibus I, and from when

Directive (EU) 2026/470 was published in the Official Journal on 26 February 2026 and entered into force on 18 March 2026, the twentieth day after publication (Article 6). It amends the Accounting Directive (Directive 2013/34/EU), which contains the CSRD's reporting duties, and the CSRD's own timetable in Directive (EU) 2022/2464. From financial years starting on or after 1 January 2027, sustainability reporting applies to undertakings which, on their balance sheet dates, "exceed a net turnover of EUR 450 000 000 and an average number of 1 000 employees during the financial year", and to parent undertakings of groups that exceed both figures on a consolidated basis (Articles 19a(1) and 29a(1) of Directive 2013/34/EU and Article 5(2) of Directive (EU) 2022/2464, as amended). Both thresholds must be exceeded: more than EUR 450 million in net turnover and more than 1,000 employees.

Undertakings that already report keep a transitional window. Large public-interest entities with more than 500 employees, and public-interest entities that are parents of large groups with more than 500 employees, report for financial years starting between 1 January 2024 and 31 December 2026; for financial years starting on or after 1 January 2027, the new thresholds decide. Member States may exempt those that do not exceed EUR 450 million in net turnover or an average of 1,000 employees during the financial year, for financial years starting between 1 January 2025 and 31 December 2026 (Article 5(2) of Directive (EU) 2022/2464, as amended). Member States must transpose the amendments to the Accounting Directive and the CSRD by 19 March 2027 (Article 5(1) of Directive (EU) 2026/470). For the full scope picture, including the separate rules for non-EU groups, see section 7 of our SME thresholds guide.

The two thresholds leave a fashion brand in one of three positions. If you exceed both, you report, and your report must, where applicable, cover your value chain, including your products, business relationships and supply chain (Article 19a(3), first subparagraph). If you have an average of 1,000 employees or fewer, you do not report, and towards reporting customers you are a protected undertaking, a test based on the preceding financial year (section 2). If you have more than 1,000 employees but EUR 450 million or less in net turnover, you do not report, and the cap does not protect you either.

2. The value-chain cap: what a protected supplier may decline from 2027

The cap protects suppliers, not reporters. Article 19a(3) of the Accounting Directive, and Article 29a(3) for groups, define a protected undertaking as an undertaking which "does not exceed, on its balance sheet date, an average number of 1 000 employees during the preceding financial year" and "is in the value chain of a reporting undertaking". There is no turnover test. A reporting customer may rely on your self-declaration of that status without verifying it, unless it knows, or can reasonably be expected to know, that the declaration is manifestly incorrect. For reporting under the ESRS, the cap "also applies to non-EU undertakings in the upstream and downstream value chain of the reporting undertaking" (ESRS 1, paragraph 66, as replaced by Delegated Regulation (EU) 2026/1563).

The core right reads: "Protected undertakings shall have the right to decline to provide information exceeding the information specified in the voluntary standards in response to a request made for the purpose of sustainability reporting as required by this Directive". Four rules back it up. A reporting undertaking may not require more in its contractual and other arrangements made to meet its reporting requirements; "any contractual provision contrary to point (a) shall not be binding, without however affecting the binding nature of the remaining provisions of the contract"; a reporting undertaking that asks for more must ensure that you are told which information exceeds the voluntary standards and that you have a statutory right to decline it; and a reporting undertaking that reports its value chain without such extra information from protected undertakings is deemed to have complied (Article 19a(3), fourth subparagraph, points (a) to (d)).

The "voluntary standards" now exist as law. Delegated Regulation (EU) 2026/1560, published on 21 September 2026 and in force since 24 September 2026, sets out a voluntary standard in Annex I, with a Basic Module and a Comprehensive Module, for undertakings that are not required to report (Articles 2 and 4). It is based on Commission Recommendation (EU) 2025/1710, which, according to recital 5, should be considered as no longer producing any legal effects from the Regulation's entry into force. Article 3 then makes only part of the standard the cap: "The value chain cap shall only comprise the datapoints specified in Annex II to this Regulation". Article 3 applies from financial years beginning on or after 1 January 2027 (Article 4). Read together with Article 19a(3) and ESRS 1, paragraph 66, the upper limit of what a reporting customer may require from a protected supplier is the Annex II list; on that reading, a protected undertaking may decline CSRD requests for anything beyond it, even where the item appears elsewhere in the voluntary standard.

Annex II sets a narrower cap for undertakings with 10 employees or fewer. The table summarises it; the references are to the disclosures and paragraphs of the voluntary standard in Annex I.

Note what is missing. The voluntary standard asks undertakings in sectors using significant material flows for "the annual mass-flow of relevant materials used" (Annex I, disclosure B7, paragraph 39(c)), but Annex II does not list it. Nor does Annex II list material composition, recycled content, durability, repairability or recyclability of products. The only circular-economy datapoints in the cap are whether, and if so how, the supplier applies circular economy principles, its total waste and the share diverted to recycling or reuse, and these only for suppliers with more than 10 employees.

The Directive says the same in its own text. Nothing in the right to decline "affects information requests for purposes other than the purpose of sustainability reporting as required by this Directive, including requests for the purpose of complying with Union requirements on undertakings to conduct a due diligence process", and nothing in it imposes or implies an obligation on any undertaking in the value chain to provide sustainability information (Article 19a(3), fifth subparagraph). Recital 12 of Directive (EU) 2026/470 adds that the cap "should not prohibit the sharing of information on a voluntary basis". The cap is a right to say no to one kind of request. It does not stop you from sharing more if you choose to, and it does not touch duties under other law.

For the customer, the cap is workable. ESRS 1 allows value-chain information to be collected directly from counterparties or estimated, using for example sector-average data, spend-based data or other proxies (paragraph 65).

3. ESRS E5 for large groups: what it asks, and what it is not

Delegated Regulation (EU) 2026/1563 replaces Annexes I and II to Delegated Regulation (EU) 2023/2772, which contain the European Sustainability Reporting Standards (ESRS). It enters into force on 10 November 2026 and applies to financial years beginning on or after 1 January 2027 (Articles 1 and 3); for financial years starting in 2026, undertakings may apply the previous version, the new standards, or the previous version with listed reliefs (Article 2). ESRS E5, Resource Use and Circular Economy, is reported only where that topic relates to material impacts, risks and opportunities of the undertaking (ESRS E5, paragraph 2).

Where it is material, E5 asks, among other things, for the key materials used, their total weight and a breakdown of each, and "the secondary resources used, expressed in weight or as a percentage of the total weight of key materials" (paragraph 13). For products, it asks for "qualitative or quantitative information on the expected durability of its key products", "qualitative or quantitative information on the extent to which its key products are repairable" and "the designed recyclability rate of its key products and their packaging" (paragraph 15). If the undertaking integrates circular economy principles or eco-design requirements in its key products and circular economy services, it must explain how (paragraph 9). Secondary resources include recycled materials and re-used, repaired, refurbished or remanufactured products or components (glossary in Annex II to Delegated Regulation (EU) 2026/1563, definition of secondary resource).

What E5 is not. Key materials are those "essential for the undertaking's ability to manufacture or deliver its products or services, identified through a managerial assessment"; key products are "Products that are central to the undertaking's value creation or strategic objectives, identified through a managerial assessment" (definitions in the same glossary). The reporting undertaking chooses them and reports totals, breakdowns and descriptions for the undertaking or group as a whole. E5 does not ask for data per article, batch or item, and it is not a product passport. In the ESRS, the ESPR appears only as context: ESRS E5, paragraph 5, lists it among the EU frameworks the standard "takes account of", and the glossary refers to it for the full list of eco-design requirements. Neither law provides that DPP data satisfies an ESRS disclosure, or the reverse.

The Commission can no longer adopt a textile-specific ESRS. Directive (EU) 2026/470 deleted its power to adopt sector-specific reporting standards (Article 2, point (6)(a), deleting the third subparagraph of Article 29b(1) of Directive 2013/34/EU); according to recital 20, the Commission "could support undertakings by providing sector-specific guidance" instead.

The overlap with the DPP lies in the subject matter, not in the law. Both deal with materials, recycled content, durability, repairability and recyclability, which also appear among the product aspects listed in Article 5(1) of the ESPR. The table sets the two side by side.

For a brand that supplies a large group, this means: the group's questions about key materials and secondary resources, asked for its sustainability statement, are CSRD requests. If you are a protected undertaking, they fall outside the Annex II list and, on the reading set out in section 2, you may decline them; the customer can estimate instead. If you choose to answer, the figures can come from the same material records you will need for a passport once a textile delegated act defines its content.

4. ESPR Article 38: why the cap is no shield against DPP data duties

The ESPR has its own supplier rule. Article 38 provides as follows, with points (b) and (c) summarised: "When specified in the delegated act adopted pursuant Article 4, supply chain actors shall" (a) "provide, upon request and free of charge, manufacturers, notified bodies and competent national authorities with available relevant information related to the products they supply or the services they provide"; (b) where that information is missing, allow manufacturers to assess the products or services concerned and give them access to relevant documents or facilities; and (c) enable notified bodies and competent national authorities to verify the accuracy of relevant information related to their activities. A delegated act may impose these duties where necessary for effective market surveillance (Article 4(6), point (a)(iv)). Recital 77 gives examples of such information, "such as the quantity and type or chemical composition of materials used or the production process employed".

In ESPR terms, the manufacturer is usually the brand: any person that manufactures a product "or that has a product designed or manufactured, and markets that product under their name or trademark" (Article 2, point (42)). On that definition, a brand selling under its own name can ask its suppliers for Article 38 information, and so can a retailer for its private-label products. Our manufacturers and private-label guide sets out how the duties are split.

On the wording of the texts, the cap does not help a supplier against such a request, for three reasons. First, the right to decline covers only a request "made for the purpose of sustainability reporting as required by this Directive"; a manufacturer's request under Article 38 serves compliance with an ESPR delegated act. Second, Article 19a(3) itself states that the right to decline does not affect requests for other purposes, and recital 4 of Delegated Regulation (EU) 2026/1560 states that the cap should not affect requests for information "needed to comply with obligations stemming from other Union or national law". Third, Article 38 sets no employee threshold. A factory with 200 employees may decline a large brand group's CSRD question on recycled content; once a textile delegated act specifies Article 38, the same factory would still have to give that brand, as manufacturer, the available relevant information covered by that act, on request and free of charge.

Today, Article 38 is dormant for garments. The Publications Office records show no ESPR delegated act for textiles adopted by 20 October 2026; the legal acts adopted under the ESPR so far concern the Ecodesign Forum, unsold consumer products and the DPP registry. Once a textile act is adopted, its date of application cannot be earlier than 18 months after its entry into force, except in duly justified cases (Article 4(4) of the ESPR), and Article 38 applies only if the act specifies it. Until then, what your suppliers give you for a future passport rests on your contracts.

5. The CSDDD after Omnibus I, in brief

Omnibus I also cut back the Corporate Sustainability Due Diligence Directive (CSDDD, Directive (EU) 2024/1760). It now applies to EU companies that "had more than 5 000 employees on average and had a net worldwide turnover of more than EUR 1 500 000 000" in the last financial year, to ultimate parent companies of groups that reached those thresholds, and to companies with franchising or licensing agreements in the Union whose royalties exceed EUR 75 million where the company or group has a net worldwide turnover of more than EUR 275 million; parallel tests apply to non-EU companies, measured by turnover generated in the Union (Article 2). Member States must transpose it by 26 July 2028 and apply it from 26 July 2029; the annual statement under Article 16 applies for financial years starting on or after 1 January 2030 (Article 37(1)).

For a brand that supplies a company in scope, the practical point is information requests. They fall outside the CSRD cap, which expressly does not affect requests made to comply with Union due diligence requirements (Article 19a(3) of the Accounting Directive). The CSDDD sets its own limit instead: for the in-depth assessment, "companies may request information from business partners only where that information is necessary, and, in the case of business partners with fewer than 5 000 employees, only when the information cannot reasonably be obtained by other means" (Article 8(2a), point (a)).

Omnibus I also rewrote civil liability: Article 29(1) and (7) are deleted, paragraph 2 was replaced and now requires Member States to ensure a right to full compensation where a company is held liable under national law for damage caused by a failure to comply with the due diligence requirements, and paragraphs 3, 4 and 5 were amended (Article 4, point (20), of Directive (EU) 2026/470). A pending proposal would also delete Article 31 on public procurement (section 6). The CSDDD is a due diligence law, not a product-data law, and it sets no passport requirements. For the EU's separate ban on products made with forced labour, see our Forced Labour Regulation guide.

6. Pending acts and proposals: status on 20 October 2026

What this means: the CSRD scope, the value-chain cap and ESRS E5 described in this guide are adopted law and apply from financial years beginning in 2027, with the Directive's CSRD amendments to be transposed into national law by 19 March 2027. The CSDDD guidelines and the Public Procurement Act are still to come, and neither changes the cap. The development that would change the DPP side of this guide is the adoption of a textile delegated act under the ESPR.

7. What to do now

Establish your status and document it. Check your average number of employees in the preceding financial year. If it does not exceed 1,000, you are a protected undertaking towards every reporting customer, and a self-declaration is enough for them to rely on (Article 19a(3) of Directive 2013/34/EU). If you exceed both CSRD thresholds yourself, you are a reporting undertaking, and the cap limits what you may require from your own smaller suppliers for your report.

Sort every data request by purpose. For requests made for a customer's CSRD reporting for financial years from 2027, compare them with Annex II to Delegated Regulation (EU) 2026/1560. The customer must tell you which items go beyond the cap and that you may decline them, and contract clauses that require more are not binding. Requests made to comply with due diligence requirements or with other Union law are outside the cap; answer them on their own legal basis and under your contracts.

Decide what you share voluntarily. The cap is a right to decline, not a ban on sharing (recital 12 of Directive (EU) 2026/470). Material composition and recycled content are not in the cap, but sharing them can be a commercial choice. If you share, take the figures from the same records you use for product compliance, so that the numbers do not diverge.

Keep one materials and recycled-content record per article. For each style, record the material composition by weight, the recycled share with its evidence, any durability or repair information you hold, and the supplier and production stage each figure comes from. Aggregated, such a record can answer a large customer's questions on key materials and secondary resources, if you choose to answer. At article level, it covers product aspects that the ESPR lists for ecodesign requirements, such as recycled content and recyclability (Article 5(1)); which of them a textile passport will require depends on the delegated act. This is a data-management choice, not a legal requirement: neither the ESRS nor the ESPR treats data prepared for one as satisfying the other.

Prepare your own supplier contracts. Until a textile delegated act specifies Article 38, the product data your suppliers give you for a future passport rests on your contracts. On the wording of Article 19a(3), the cap restricts contractual and other arrangements made "for the purpose of meeting the sustainability reporting requirements of this Directive"; a clause on product-compliance data serves a different purpose. Follow the textile delegated act, Have Your Say initiative 14445 and procedure 2026/0265(COD), and review your plan when each is adopted.

Sources

• Omnibus I DirectiveDirective (EU) 2026/470 of the European Parliament and of the Council of 24 February 2026 amending Directives 2006/43/EC, 2013/34/EU, (EU) 2022/2464 and (EU) 2024/1760 as regards certain corporate sustainability reporting requirements and certain corporate sustainability due diligence requirements (OJ L, 2026/470, 26.2.2026). Recitals 12 and 20; Article 2, point (6); Article 3; Article 4, point (20); Articles 5 and 6. CELEX 32026L0470 ↗
• Accounting DirectiveDirective 2013/34/EU of the European Parliament and of the Council of 26 June 2013 on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, amending Directive 2006/43/EC of the European Parliament and of the Council and repealing Council Directives 78/660/EEC and 83/349/EEC, consolidated version of 18 March 2026. Articles 19a(1) and (3), 29a(1) and (3), and 29ca. CELEX 02013L0034-20260318 ↗
• CSRDDirective (EU) 2022/2464 of the European Parliament and of the Council of 14 December 2022 amending Regulation (EU) No 537/2014, Directive 2004/109/EC, Directive 2006/43/EC and Directive 2013/34/EU, as regards corporate sustainability reporting, consolidated version of 18 March 2026. Article 5(2). CELEX 02022L2464-20260318 ↗
• Value-chain capCommission Delegated Regulation (EU) 2026/1560 of 3 July 2026 supplementing Directive 2013/34/EU of the European Parliament and of the Council by establishing sustainability reporting standards for voluntary use by undertakings protected by the value chain cap (OJ L, 2026/1560, 21.9.2026). Recitals 3 to 6; Articles 1 to 4; Annex I, disclosure B7; Annex II. CELEX 32026R1560 ↗
• ESRSCommission Delegated Regulation (EU) 2026/1563 of 3 July 2026 amending Delegated Regulation (EU) 2023/2772 as regards the simplification of certain sustainability reporting standards (OJ L, 2026/1563, 21.9.2026). Articles 1 to 3; Annex I: ESRS 1, paragraphs 65 and 66, and ESRS E5, paragraphs 2, 5, 9, 13 and 15; Annex II: definitions of eco-design requirement, key material, key product and secondary resource. CELEX 32026R1563 ↗
• Ecodesign regulation (ESPR)Regulation (EU) 2024/1781 of the European Parliament and of the Council of 13 June 2024 establishing a framework for the setting of ecodesign requirements for sustainable products, amending Directive (EU) 2020/1828 and Regulation (EU) 2023/1542 and repealing Directive 2009/125/EC. Recital 77; Article 2, point (42); Article 4(4) and (6); Article 5(1); Article 9(2); Article 38. CELEX 32024R1781 ↗
• CSDDDDirective (EU) 2024/1760 of the European Parliament and of the Council of 13 June 2024 on corporate sustainability due diligence and amending Directive (EU) 2019/1937 and Regulation (EU) 2023/2859, consolidated version of 18 March 2026. Articles 2, 8(2a), 29, 31 and 37. CELEX 02024L1760-20260318 ↗
• Public Procurement Act proposalProposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on public contracts and concessions, repealing Directives 2014/23/EU, 2014/24/EU and 2014/25/EU, and amending Regulations (EC) No 1370/2007, (EU) 2023/1542, (EU) 2024/1157, (EU) 2024/1252, (EU) 2024/1735, (EU) 2024/1781, (EU) 2024/2847, (EU) 2024/3110 and (EU) 2025/40, and Directives 2008/98/EC, (EU) 2019/882, (EU) 2022/2381, (EU) 2023/1791 and (EU) 2024/1760 (Public Procurement Act), COM(2026) 590 final of 9 September 2026, Article 147, points (1) and (12). CELEX 52026PC0590 ↗ European Parliament, Legislative Observatory, procedure 2026/0265(COD). OEIL 2026/0265(COD) ↗
• Have Your SayEuropean Commission, Have Your Say initiative 14445, Corporate sustainability due diligence – development of guidelines. HYS 14445 ↗

Directive (EU) 2026/470, Delegated Regulations (EU) 2026/1560 and 2026/1563, Regulation (EU) 2024/1781, COM(2026) 590 and the consolidated versions of 18 March 2026 of Directives 2013/34/EU, (EU) 2022/2464 and (EU) 2024/1760 were read in the versions published by the EU Publications Office (EUR-Lex); the Publications Office records checked on 20.10.2026 show no act amending Directive (EU) 2026/470 or the two delegated regulations, corrigenda to other language versions only, and no ESPR delegated act for textiles. The Legislative Observatory and Have Your Say were accessed on 20.10.2026. This is general information, not legal, financial or investment advice.