If you trade physical commodities into the EU, employ more than 1,000 people, and turn over more than EUR 450 million, the Corporate Sustainability Reporting Directive still applies to you. The Omnibus I simplification package, adopted in February 2026, removed an estimated 80% of companies from CSRD scope. Listed SMEs are out entirely. The employee threshold rose from 250 to 1,000 and must now be met alongside a EUR 450 million net turnover threshold. Both conditions apply simultaneously.
Some large public-interest entities already published their first CSRD reports in 2025 under Wave 1. For the rest of the in-scope companies, including most commodity traders, reporting is approaching fast.
Are you in scope?
- EU company: more than 1,000 employees AND more than EUR 450 million net turnover. If both apply, you report in 2028 covering FY 2027.
- Non-EU company: group net turnover exceeding EUR 450 million within the EU AND at least one EU subsidiary or branch with more than EUR 200 million turnover. If both apply, you report in 2029 covering FY 2028.
- Listed SME or company below both thresholds: you are no longer in scope.
Among the companies that remain, large commodity traders face a disproportionate disclosure burden. Palm oil importers, rubber processors, timber groups, cocoa grinders, coffee traders, soy crushers: these are businesses with deep, multi-tier value chains running through jurisdictions where traceability is hardest. Mandatory ESRS data points were reduced by roughly 60%, with further simplifications proposed in the Commission's May 2026 draft delegated regulation. The reporting difficulty was not.
Wave 2 companies file their first CSRD report in 2028, covering financial year 2027. Non-EU companies follow in 2029, covering FY 2028, if the group generates more than EUR 450 million net turnover within the EU and has at least one EU subsidiary or branch exceeding EUR 200 million turnover. That is not a distant deadline. It is a data collection problem that starts now.
Why commodity supply chains face the hardest CSRD disclosures
CSRD is an entity-level disclosure regime. It does not ask "is this shipment compliant?" It asks "what are the material sustainability impacts, risks, and opportunities across your entire value chain?" For a commodity trader, the value chain is the business.
Consider a European palm oil importer sourcing from 200 suppliers across Indonesia and Malaysia. The sustainability team needs to disclose Scope 3 emissions from purchased goods, biodiversity impacts at sourcing locations, and labour conditions among value chain workers. That data does not live in the company's ERP system. It lives in smallholder farms, collection points, and processing mills across Southeast Asia.
This is the core difficulty. CSRD does not just require policies and targets. It requires evidence from the upstream value chain, the part of the business where visibility is lowest and data collection is most expensive.
The four ESRS standards that matter most
The European Sustainability Reporting Standards include 12 standards, but commodity traders will find four dominate their disclosure workload. Each is subject to the double materiality assessment. If a standard is material, disclosure is mandatory.
ESRS E1: Climate change and Scope 3 emissions
For commodity traders, climate disclosure means Scope 3. Category 1 (purchased goods and services) is typically the single largest component of a commodity trader's carbon footprint, often exceeding the combined total of Scope 1 and Scope 2. The emissions are not in your warehouses. They are in land-use change at the point of production, processing energy at mills, and transportation from origin to port.
ESRS E1-6 requires gross Scope 1, 2, and 3 greenhouse gas emissions, broken down by material category. Carbon credits and removals must be disclosed separately under E1-7 and cannot be netted against gross emissions. You cannot offset your way out of the number.
The practical challenge: calculating Category 1 emissions for agricultural commodities requires knowing where they were produced, how the land was used before production, and what energy inputs were involved in processing. Generic emission factors may be accepted under limited assurance in the first reporting year, particularly where the amended ESRS "undue cost or effort" exemption applies to value chain data. But the direction of travel is clear: by year three, the expectation will be actual supplier-level data.
ESRS E4: Biodiversity and ecosystems
This is where commodity traders face unique exposure. Under ESRS 1 paragraph 29 and E4 paragraph 19(a), every company must disclose whether it has operations or sourcing locations in or near biodiversity-sensitive areas, regardless of whether biodiversity is assessed as material. This screening disclosure is mandatory for all in-scope companies, no exemption.
If the answer is yes and biodiversity is assessed as material, the full E4 disclosures apply: the company must report the number and area in hectares of sites in or near protected areas, along with the activities driving impacts and mitigation measures.
For a commodity trader sourcing rubber from Southeast Asia or cocoa from West Africa, the answer is almost certainly yes. The question is whether you know which specific sourcing locations are affected and can quantify the hectarage.
This requires plot-level or at minimum site-level geolocation data linked to your supply chain. Regional averages will not satisfy the disclosure. You need to know where your commodities come from, at a resolution that allows cross-referencing against biodiversity databases.
ESRS S2: Workers in the value chain
S2 covers workers who are not your employees but are in your upstream and downstream value chain: farmers, mill workers, collection point operators, processing facility staff. For commodity traders, this is the vast majority of the human labour involved in producing what you sell.
Required disclosures include policies for managing impacts on value chain workers, engagement processes and grievance mechanisms, and substantiated human rights incidents. The amended ESRS draft (EFRAG technical advice, November 2025; Commission draft delegated regulation, May 2026) introduced an explicit data point requiring disclosure of human rights incidents involving value chain workers. The final delegated act has not yet been adopted, but the direction is clear.
The difficulty for commodity supply chains is structural. A rubber trader sourcing from 2,000 smallholders through a network of collectors does not have direct employment relationships with any of them. But CSRD asks you to disclose how you manage impacts on those workers, what channels exist for them to raise concerns, and what incidents have occurred.
This is not a policy writing exercise. It requires upstream engagement infrastructure that most commodity traders do not have.
ESRS G1: Business conduct
G1 covers business conduct policies and governance. G1-1 requires disclosure of anti-corruption policies, including whether they are consistent with the UN Convention Against Corruption. G1-3 requires disclosure of the operational systems for preventing, detecting, and investigating corruption and bribery. For commodity traders operating in jurisdictions where corruption indices are high, this requires documented governance processes that cover not just your own staff but your supplier relationships.
The practical overlap with supply chain due diligence is significant. If you already assess corruption risk as part of your sourcing decisions, that assessment is G1 evidence. If you do not, G1 will force you to start.
What double materiality means for your business
CSRD introduced a concept that most commodity traders have not yet internalised. Double materiality means assessing every sustainability topic from two directions simultaneously.
Impact materiality asks: does your value chain cause significant negative impacts on people or the environment? For a company sourcing palm oil from recently deforested land, the answer is obviously yes, regardless of whether it affects the company's financial statements.
Financial materiality asks: do sustainability matters create financial risks or opportunities for the company? For a commodity trader, regulatory fines, market access restrictions, reputational damage from deforestation links, and physical climate risks to supply reliability are all financially material.
A topic is reportable if it is material from either direction. For commodity traders, deforestation, labour conditions, and climate emissions are almost always material from both.
| Materiality Direction | Question | Example for Commodity Trader |
|---|---|---|
| Impact (inside-out) | Does your sourcing cause harm? | Land-use change from palm oil expansion destroys biodiversity |
| Financial (outside-in) | Does sustainability risk affect your finances? | Loss of EU market access if supply chain cannot demonstrate traceability |
The double materiality assessment is documented under ESRS 2 IRO-1. It is not a checkbox. It is an analytical process that generates a list of material topics, each of which triggers mandatory disclosure under the relevant topical standard. Get the materiality assessment wrong and you either over-report (wasting resources) or under-report (regulatory and audit risk).
The data your sustainability team is about to request
Here is what this looks like in practice. Your sustainability reporting team, likely working with an external advisor, will need the following from your supply chain and procurement teams:
| ESRS Standard | Data Required | Where It Lives |
|---|---|---|
| E1 (Climate) | Supplier-level origin data, transport routes, processing energy, land-use history | Procurement records, supplier surveys, logistics systems |
| E4 (Biodiversity) | Sourcing site coordinates, proximity to protected areas, hectarage by site | Supplier geolocation data, GIS analysis |
| S2 (Workers) | Labour conditions at supplier sites, grievance channels, incident records | Supplier audits, engagement programs |
| G1 (Governance) | Anti-corruption risk by sourcing country, due diligence procedures | Compliance records, country risk assessments |
The common denominator: almost all of this data originates outside your company, in the upstream value chain. And most of it requires structured, verifiable supplier-level evidence, not aggregated estimates.
What to do now
CSRD reporting for Wave 2 companies covers financial year 2027. Data collection for that reporting period should already be underway. Here are four steps that apply regardless of which reporting tool or advisor you use.
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Run the double materiality assessment early. Do not wait until Q3 2027. For commodity traders, E1 (climate), E4 (biodiversity), and S2 (value chain workers) are almost certainly material from both directions. Start with that assumption and validate it through the formal IRO-1 process. Starting now gives your supply chain team 18 months to fill gaps instead of 6. Companies may also opt for voluntary early adoption for FY 2026 under the revised ESRS framework.
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Map your value chain to supplier level. ESRS E1 Scope 3 and E4 biodiversity both require location-specific data. If your supply chain visibility stops at the first-tier trader, you cannot disclose what happens at the farm, mill, or concession where the commodity was produced. Invest in upstream mapping now.
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Build supplier engagement for S2. Labour and human rights disclosures require more than a code of conduct. You need documented engagement processes, functioning grievance mechanisms, and a system for identifying and disclosing incidents. For commodity supply chains with thousands of upstream workers, this is an infrastructure project, not a policy update.
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Connect your supply chain data to your reporting tool. Most CSRD reporting platforms expect structured inputs. If your supply chain evidence is in scattered spreadsheets, email attachments, and PDF audit reports, the integration cost will dominate your reporting timeline. Structure the data at collection, not at reporting.
Preparing for buyer due diligence requests? See What Your EU Buyers Will Ask, a checklist of the evidence commodity exporters need ready.
How ResourceLedger approaches this problem
We built ResourceLedger around a principle that applies to CSRD as much as any other framework: compliance evidence should be structured once and usable across multiple regulatory and reporting requirements.
The platform captures supply chain evidence with four properties that make it useful beyond a single regulation. Every data point has traceable provenance, so you can show where it originated and when. Every document has integrity assurance, so you can demonstrate it has not been altered. Every assessment has documented methodology, so an auditor can follow the logic. And every conclusion is reproducible, so any reviewer can reach the same result from the same inputs.
Here is what that looks like for a CSRD reporting cycle. A commodity trader sources rubber from 400 smallholders through a network of collectors and processors in Indonesia. The platform holds plot-level geolocation for every farm, supplier identity and contact records for every entity in the chain, and legality documentation for every origin. When the sustainability team needs E4 biodiversity data, the geolocation records are already structured and ready for GIS cross-referencing against protected area boundaries. When they need S2 worker data, the supplier engagement records and labour compliance evidence are already in the system with full provenance.
ResourceLedger does not generate CSRD reports. That is the job of your reporting tool or advisor. What it provides is the structured, verifiable evidence base that your reporting process needs as input. The same evidence infrastructure that makes a supply chain auditable also makes it disclosable.
You can see how the platform works or explore the technical architecture.
Frequently asked questions
Does CSRD still apply after Omnibus I?
Yes, for companies meeting both thresholds: more than 1,000 employees and more than EUR 450 million net turnover. Wave 2 reports in 2028 covering FY 2027. Non-EU companies with EUR 450 million EU group turnover and an EU subsidiary or branch above EUR 200 million follow in 2029. Listed SMEs are out entirely. Mandatory data points were reduced roughly 60%, but the core value chain disclosures under E1, E4, S2, and G1 remain.
What level of assurance does CSRD require?
Limited assurance is required from the first reporting year. Omnibus I removed the mandatory escalation to reasonable assurance that was originally planned. There is currently no defined timeline for transitioning to reasonable assurance. Limited assurance applies indefinitely under the current framework.
Can upstream supply chain data satisfy multiple frameworks?
Structured supply chain evidence, particularly geolocation, supplier identity, and legality documentation, can support disclosures across CSRD, TNFD, and other frameworks simultaneously. The underlying data is the same; the disclosure format and materiality frame differ. Companies that structure evidence at the point of collection avoid duplicating efforts across regulatory workstreams.
What happens if I assess a topic as non-material?
If double materiality concludes a topic is not material, the company generally does not report under that standard. However, ESRS E4 includes a screening exception: all companies must disclose whether they have sites in or near biodiversity-sensitive areas, regardless of materiality. The full E4 disclosures (hectarage, impact metrics, mitigation) only apply if biodiversity is assessed as material. For commodity traders sourcing from tropical regions, the screening disclosure alone will likely trigger further analysis.
If you are preparing for CSRD reporting and want to see how structured supply chain evidence supports value chain disclosures, request a platform walkthrough.