Recital (12)

Article 19a(3) of Directive 2013/34/EU requires undertakings to report information about their own operations and about their value chain. There is evidence that undertakings in the value chain, including small and medium-sized enterprises, receive disproportionate requests for information from reporting undertakings, notwithstanding the existing limitations set out in that Directive. It is therefore necessary to introduce protections for undertakings in the value chain that do not exceed the average number of 1000 employees during the preceding financial year to limit the burden for those undertakings (the protected undertakings). Reporting undertakings should be able to rely on a self-declaration issued by undertakings in their value chain for the purpose of determining the size of those undertakings. No further verification by the reporting undertaking should be necessary. However, the reporting undertaking should not rely on a self-declared size that it knows, or can reasonably be expected to know, is manifestly incorrect. When seeking to obtain information about their value chain, reporting undertakings should be prohibited from requiring information exceeding certain limits from protected undertakings. Those limits should reflect the limits specified by the sustainability reporting standards for voluntary use to be adopted by the Commission. At the same time, protected undertakings in the value chain of the reporting undertakings should be given a statutory right to refuse to provide information exceeding those limits. To ensure the effectiveness of that right and to avoid placing a burden on smaller undertakings to proactively assess whether that right applies, reporting undertakings which choose to request information exceeding those limits should be required to ensure that protected undertakings are informed of which extra information is requested and of their statutory right to decline to provide it. To ensure proportionality, the scope of this value-chain cap should be limited in the following ways. First, it should not prohibit the sharing of information on a voluntary basis, such as information that is commonly shared among undertakings in a given sector. Second, it should not affect any obligation that might exist, whether contractually or under Union or national law, to provide information that does not exceed the information specified in the voluntary standard. Third, the value chain cap should only apply to information gathering carried out for the purpose of reporting sustainability information as required by Directive 2013/34/EU. It should not affect Union requirements to conduct a due diligence process or information gathering carried out for any other purpose, such as for the reporting undertaking’s risk management. Undertakings reporting in accordance with those limitations should be deemed to comply with the obligation to report value chain information as required by Directive 2013/34/EU. It is important that reporting undertakings only request information from undertakings in their value chain insofar as necessary. In particular, it is important that they request less information than that specified in the standards for voluntary use if they do not need all the information in those standards. Assurance providers should prepare their assurance opinion respecting the protections provided for undertakings in the value chain. Furthermore, recognising that all the necessary information might not always be available from undertakings in the value chain, the reporting undertaking should be able to meet the reporting requirements for value chain information by using information directly obtained from undertakings in its value chain or estimates for that information, as appropriate.