Value Chain Mapping for CSRD: Where Do SMEs Start?

Introduction

One of the key new expectations under the Corporate Sustainability Reporting Directive (CSRD) is that companies must understand and disclose sustainability impacts throughout their value chain, not just within their own operations. For small and growing businesses (SMEs), this can sound overwhelming — but in practice, value chain mapping is about visibility and prioritisation, not perfection.

This guide breaks down how small and growing businesses (SMEs) can start mapping their value chain in a simple, structured way that aligns with double materiality and the VSME Standard. The goal is to help you identify where your main environmental and social impacts occur, and where you might be most exposed to sustainability risks from suppliers or customers.

What Is Value Chain Mapping?

A value chain covers all activities linked to your business — from sourcing raw materials to product delivery and end-of-life disposal. It includes both upstream (suppliers, raw materials, logistics) and downstream (customers, distributors, product use) activities.

Mapping your value chain means visually or logically identifying the key stages and actors involved, so you can:

• Understand where significant sustainability impacts occur;
• Recognise which partners influence your performance;
• Gather the right data for your CSRD or VSME reporting.

This process supports your double materiality assessment, by clarifying which impacts are within your control and which depend on external partners.

Why Value Chain Mapping Matters for SMEs

Even if your SME isn’t directly in scope for CSRD, many large companies now request value chain data from their suppliers. Knowing your own map helps you:

• Respond faster and more accurately to client questionnaires;
• Anticipate sustainability risks (e.g. price volatility, labour issues);
• Identify improvement opportunities like waste reduction or efficiency gains.

It’s also a requirement under ESRS 1 (General Requirements) and embedded in the VSME Standard’s principles on disclosing value chain impacts and dependencies.

Step-by-Step: How SMEs Can Map Their Value Chain

Step 1: Define Your Core Activities

List your main business processes — for example:

• Sourcing raw materials or components;
• Manufacturing or service delivery;
• Distribution and logistics;
• Product use and disposal.

This defines the boundaries of your value chain map. Focus on what’s essential rather than every possible detail.

Step 2: Identify Key Partners

List your main suppliers, contractors, and customers. You don’t need to include everyone — aim for the top 80% of your business volume. For each, note:

• Country or region of operation;
• Type of product or service provided;
• Known sustainability certifications or commitments.

This information helps you understand where environmental or social risks might be concentrated geographically or sectorally.

Step 3: Map the Flows

Draw a simple flow diagram or table showing inputs, operations, and outputs. Use arrows to show material or service movement and add notes for energy use, transport, or waste generation at each stage.

For SMEs without design tools, a spreadsheet or whiteboard photo is perfectly acceptable — what matters is clarity.

Step 4: Link to Sustainability Topics

At each stage, identify which sustainability topics are most relevant:

• Upstream: supplier emissions, raw material sourcing, labour practices.
• Own operations: energy use, safety, waste, training.
• Downstream: product use, packaging, transport emissions, end-of-life.

This forms the backbone of your materiality assessment and helps determine which topics are likely to be “material” under CSRD.

Learn how to identify your material sustainability topics →

Step 5: Prioritise and Document

Finally, note the areas where you have the greatest impact or risk. Use simple criteria such as:

• High volume or financial significance;
• Direct environmental or social impact;
• Reputational sensitivity;
• Regulatory exposure.

Keep your documentation short and factual — who contributed, when it was created, and what key insights emerged. This record supports transparency and future updates.

See how SMEs conduct proportional double materiality assessments →

Practical Example

A small textile manufacturer might map its chain as follows:

1. Upstream: Cotton suppliers (India, Turkey) – potential water use and labour concerns.
2. Operations: Dyeing and finishing – high water and chemical use.
3. Downstream: Retail clients in EU – customer expectations on recycling and circularity.

From this, the SME can prioritise topics like water consumption, supplier audits, and waste reduction for its sustainability reporting.

Frequently Asked Questions

How detailed does my value chain map need to be?

Keep it proportional. A high-level map covering major suppliers, production stages, and key customers is sufficient. The CSRD expects visibility, not exhaustive tracing.

What if I don’t know my suppliers’ sustainability data?

Start with what you have — invoices, contracts, or product certificates. You can later request basic environmental or social information from key suppliers as part of your annual review.

See data collection best practices for SMEs →

Do service-based SMEs also need value chain maps?

Yes, but the focus shifts from materials to service delivery — for example, energy used in offices, travel, IT systems, and subcontractor practices. Every business has a value chain, even if it’s intangible.

Can this process be reused next year?

Absolutely. Once you’ve built your first map, you can reuse and update it annually — adding more detail or refining based on stakeholder feedback or new CSRD requirements.

Learn how to maintain consistency in annual sustainability updates →

Key Terms

• Value Chain: All activities from sourcing to product end-of-life.
• Upstream: Suppliers and production inputs.
• Downstream: Customers, distributors, and product users.
• Double Materiality: Assessing both impact and financial significance.
• VSME Standard: Voluntary sustainability framework for non-listed SMEs.

Conclusion

Value chain mapping helps SMEs see the bigger picture — where their sustainability influence truly lies. By starting simple, documenting your key partners and flows, and connecting those insights to material topics, you’ll build a strong foundation for CSRD compliance and credible sustainability management.

Over time, this exercise can reveal real business benefits: improved efficiency, stronger supplier relationships, and readiness for client sustainability requests. The key is to start small — but start now.