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From transparency to compliance: How traceability shapes brands in CSRD

“People are going to want, and be able, to find out about the citizenship of a brand, whether it is doing the right things socially, economically and environmentally.” -Mike Clasper President of Business Development, Proctor and Gamble (Europe)


What is CSRD?

The Corporate Sustainability Reporting Directive (CSRD) sets uniform guidelines for sustainability reporting, requiring companies to disclose their performance on sustainability issues and their impact on society and the environment. The CSRD builds upon the Non-Financial Reporting Directive (NFRD), which initially introduced sustainability reporting requirements in the EU. However, the NFRD needed to be improved as the reported quality remained subpar despite the Commission’s published reporting guidelines for companies.

What should businesses report under CSRD?

Under the new directive, companies are required to include sustainability information in their management reports, allowing simultaneous publication of financial and sustainability data. The sustainability data must be submitted in a standardized digital format, enabling easy verification and comparison in the European single access point database. Additionally, the submitted data will undergo “limited third-party assurance,” with auditors evaluating the information.

What are the consequences of non-compliance?

If a company violates the CSRD, it faces administrative fines as well as three possible punishments: public denunciation, a directive to modify behaviour, and financial penalties. Each EU member state will determine the fine and the parameters of the sanctions that fall under their purview.

Benefits of CSRD compliance:

Strong ESG practises help businesses minimise their capital cost, boosting profitability and stock returns. The advantages of CSRD activities go beyond money. Diversity and inclusion programmes have been found to boost decision-making, innovation, and employee engagement, according to a PwC study. Prioritising diversity and inclusion also benefits a company’s reputation and increases its ability to recruit and keep outstanding people.

How traceability can help?

Traceability solutions play a pivotal role in assisting brands to comply with CSRD by addressing several critical aspects of sustainability reporting. Firstly, they enable brands to track and trace their supply chains, ensuring accurate data collection on various sustainability metrics, including environmental impacts, social responsibilities, and governance practices. This robust data is essential for meeting CSRD reporting requirements.

Additionally, traceability ensures transparency throughout the supply chain by providing visibility into the origin, production processes, and movement of raw materials and products. This transparency aids in identifying potential risks, measuring environmental footprints, and verifying sustainable sourcing practices, all of which are crucial for CSRD compliance.

Moreover, CSRD mandates “limited third-party assurance” for the sustainability data submitted by companies. Traceability solutions create a reliable audit trail, simplifying the verification process for external auditors and enhancing credibility and trust in the reported data.


With our Supply Chain Traceability & ESG Intelligence suite, brands can gather insights into Environmental, Social, and Governance (ESG) performance indicators, empowering brands to identify areas for improvement and establish ambitious sustainability targets that align with CSRD guidelines.

Our blockchain-enabled solution offers multi-tier ESG data collection, aggregation, and traceability, helping businesses in compliance with CSRD by facilitating accurate data collection, ensuring supply chain transparency, providing verification and assurance, enhancing data accuracy, enabling real-time reporting, and improving overall ESG performance. These tools empower brands to effectively meet CSRD’s sustainability reporting requirements, contributing to a more transparent and sustainable business landscape within the European Union.

To learn more about how RightOrigins, our Supply Chain Traceability and ESG Intelligence suite can
support your ESG & Sustainability goals for 2024 & beyond, consult with our in-house expert.

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