Policy Brief: Supply Chains in the Spotlight – The role of supply chain (disclosure) regulations

Most of the negative environmental impacts resulting from EU manufacturing and retail take place in the supply chain. Nevertheless, transparency on the supply chain, which helps to identify risks and opportunities and reduces market inefficiencies, remains low. To tackle this issue, the European Commission proposed the Corporate Sustainability Due Diligence Directive to enhance due diligence actions and transparency along the supply chain. Moreover, the Regulation of Deforestation–free Products shall ban deforestation–linked products from the EU market. In this analysis, we demonstrate that the current availability of supply chain data is limited. Moreover, we examine the scope of the proposed Corporate Sustainability Due Diligence Directive and find that some economic activities with significant adverse impacts on the supply chain are not directly addressed by it.