What the chain provision regulates
Since March 2026, the sustainability reporting directive includes an amendment known as the chain provision. In summary, this provision states that a company which itself is required to report on sustainability cannot demand more information from a supplier with one thousand employees or fewer than what is included in the voluntary EU standard for unlisted SMEs, the VSME standard. If the customer requests information beyond this, the supplier may refuse that part of the questionnaire.
The provision was introduced because large, reporting-obligated companies were passing on their own accountability requirements through a chain of suppliers, often using questionnaires that went far beyond what a small company could reasonably be expected to provide. The chain provision sets an upper limit on this. What exactly that limit entails is not specified in the chain provision itself but in the VSME standard: that standard sets out which topics and level of detail are appropriate for an SME.
Who this applies to
The provision affects the relationship between two parties: the customer who is themselves subject to the reporting obligation, and the supplier who is not and has no more than one thousand employees. Whether your own company is itself reporting-obligated is a different question with a different answer; you can read about that in the article on who falls under the CSRD. Here we are looking at the other side: you are the supplier, and you receive a questionnaire from a customer, a bank, or another party that is reporting to them.
Not every customer who makes a request automatically falls under this rule. A bank or insurer requesting data for their own risk assessment sometimes follows different frameworks than a customer reporting on their value chain. What rules apply to your situation is something a lawyer or the relevant regulator can give you certainty about; this article describes the provision, not your specific case.
How to see whether a question goes beyond the standard
The practical question is usually not whether the chain provision exists, but whether a specific question on your list falls under it. This requires a comparison between what is being asked and what the VSME standard considers appropriate for a company of your size. Questions about energy consumption, fuel use, and the number of employees usually align with what the standard describes. Questions requesting worked-out scenario analyses, data across your entire supplier chain, or a level of detail normally expected from large, listed companies are more likely to go beyond what the standard requires.
It remains a matter of individual judgment for each question to make that distinction, and applying it to a concrete questionnaire is exactly what esgia.eu's cap check is designed for: you paste in the questions and see for each one whether it fits within the standard. If you want a broader picture before working through a whole list, a short test with a few questions provides an initial indication of where your company stands.
How to decline without damaging the relationship
Refusing a question because it goes beyond the standard does not have to become a conflict. It helps to indicate which part of the questionnaire you will complete, which part cannot be required of you under the VSME standard, and why. Many customers have adopted their questionnaire from a template designed for larger companies and are not always aware of the boundary that applies to smaller suppliers since March 2026. A clear, well-reasoned response prevents the conversation from becoming a back-and-forth about what is and is not permitted.
How such a conversation looks in practice and what tone is appropriate is covered in the article about your largest customer's ESG questionnaire. An overview of all the topics involved in sustainability questionnaires, from the standard itself to the concepts it contains, can be found on the page with all topics by situation.
What the supply chain obligation does not regulate
The supply chain obligation sets a limit on what may be asked, but says nothing about how best to answer the questions that do fall within the standard, nor about what a bank or insurer may ask outside this specific context. It is moreover not a mark of approval or certificate: there is no recognized body for these SME sustainability reports, and correct application of the supply chain obligation is neither legal advice nor assurance. If you are uncertain whether a specific question falls under the obligation, the established text of the directive and the VSME standard are the starting point, and a lawyer is the appropriate party to assess that for your situation. You can read more about where the information on esgia.eu comes from and how it is developed on the page that explains how the platform works.
If you want to know whether this affects your business and which questions on your list fall within the standard, do the free quick-scan or browse through the topics. Both can be consulted without an account and provide an initial, concrete picture of where you stand.