Olivier Audino
The Corporate Sustainability Reporting Directive (CSRD) is a European regulation that requires companies to publish standardized, verifiable and auditable sustainability data covering environmental, social and governance impacts across their entire value chain, including suppliers and procurement flows.
Unlike previous ESG obligations, CSRD is no longer a communication exercise. It turns sustainability into an operational compliance requirement, on the same level as financial reporting, with strict rules defined by the European Commission .
In practice, this means that every sustainability indicator must be traceable, explainable and backed by reliable internal processes, especially where data comes from procurement activities and supplier relationships.
For many companies, ESG reporting used to be a largely declarative exercise, often disconnected from day-to-day operations. With CSRD, this logic no longer applies. Sustainability information must now meet the same standards of consistency, traceability and auditability as financial data, under a regulatory framework defined at European level by the Corporate Sustainability Reporting Directive .
This shift fundamentally changes how companies must organize their data. Sustainability indicators can no longer rely on approximations or isolated declarations. They must be directly connected to operational processes, documented controls and reliable data sources, especially where supplier and procurement information is involved.
Three major transformations clearly illustrate the break with previous ESG practices:
In practical terms, CSRD transforms sustainability from a reporting topic into an enterprise-wide data and governance challenge. The ability to demonstrate compliance will depend less on high-level statements and more on how well companies structure their processes, controls and data flows from the ground up.
CSRD does not apply only to a limited number of large listed corporations. Its scope is deliberately broad and progressively extends to a wide range of organizations operating in the European market. Large companies, many mid-sized firms and certain non-European subsidiaries are directly concerned, based on criteria such as headcount, turnover and balance sheet total.
Even when a company is not yet formally subject to CSRD, procurement teams are often involved earlier than expected. Increasingly, customers and contractors require reliable ESG data from their suppliers, which places procurement at the center of data collection and consolidation. This is especially true when supplier information is managed through structured supplier management practices rather than fragmented local processes.
From an operational perspective, CSRD exposure can be summarized as follows:
In practice, procurement becomes involved early because it is the function that connects suppliers, contracts, and transaction flows. Without a structured approach to procurement-to-pay , companies struggle to respond consistently to external ESG requests, even before CSRD becomes a formal obligation.
CSRD is often perceived as a regulatory topic owned by finance or ESG teams. In reality, a significant share of the data required for sustainability reporting originates directly from procurement activities. Supplier information, purchasing flows and contractual relationships form the backbone of the value chain that CSRD aims to document and assess.
Environmental and social impacts are rarely generated at corporate headquarters. They are embedded in suppliers, manufacturing processes, logistics and purchasing decisions. Without structured access to supplier data and transaction history, sustainability indicators remain theoretical. This is why companies increasingly rely on supplier relationship management to centralize, qualify and secure the information required for CSRD.
From a procurement perspective, CSRD-related data typically covers several critical dimensions:
These elements cannot be produced reliably without structured processes connecting demand, purchasing and payment. When procurement data is fragmented across tools or manual files, auditability becomes extremely difficult. This is precisely why CSRD readiness depends on robust procurement-to-pay processes that ensure consistency from purchase request to invoice validation.
Ultimately, procurement acts as a data hub between operational reality and regulatory expectations. Finance teams may consolidate figures and ESG teams may define indicators, but without reliable procurement data, CSRD reporting lacks the evidence required to withstand external verification.
One of the most underestimated challenges of CSRD compliance lies in C-class purchasing. These purchases represent a high volume of suppliers, frequent transactions and relatively low individual values, which often leads organizations to manage them with limited structure and oversight.
This lack of structure creates a direct conflict with CSRD requirements. When suppliers are poorly referenced, transactions are fragmented and controls are inconsistent, it becomes extremely difficult to produce reliable, traceable and auditable sustainability data. This is why many companies start their CSRD journey by reassessing how they manage tail spend and low-value purchasing flows.
C-class purchasing typically concentrates several risk factors from a CSRD perspective:
Because of their volume and dispersion, C-class purchases often determine whether CSRD data can be consolidated consistently over time. Companies that fail to structure these flows face repeated data quality issues, while those that invest early in C-class spend audits and standardized purchasing practices gain a decisive advantage when CSRD audits begin.
Achieving CSRD compliance does not require rebuilding the entire procurement organization. It requires securing a limited number of critical data blocks that directly support sustainability reporting, auditability and long-term governance.
From a procurement standpoint, these data blocks span suppliers, transactions, risks and performance indicators. When they are fragmented or unreliable, CSRD reporting becomes fragile by design. This is why many organizations start by reinforcing their procurement management foundations before addressing reporting formats.
The following procurement data blocks are essential for building CSRD-ready reporting:
These data blocks must be consistent not only internally but also over time, which is a core expectation of CSRD. European sustainability standards defined by EFRAG reinforce this requirement by emphasizing comparability, traceability and governance of ESG data.
Once these foundations are secured, procurement teams can move from reactive data collection to structured, repeatable and audit-proof CSRD reporting.
From a CSRD perspective, the difference between structured and unstructured procurement is not marginal. It directly determines whether sustainability reporting can be verified, explained and defended during an audit. Two organizations with similar ESG ambitions can reach very different outcomes depending on how their procurement processes and data are organized.
Structured procurement relies on standardized processes, centralized supplier data and controlled purchasing flows. In contrast, unstructured procurement often depends on local practices, manual files and off-system transactions, which significantly increases compliance risk. This gap becomes particularly visible when supplier information is managed without a consistent supplier management framework .
In practice, CSRD audits tend to focus on the weakest links in the value chain. When procurement processes are unstructured, auditors often identify gaps around supplier traceability, transaction evidence and risk management. Conversely, organizations that have invested in structured procurement management are better positioned to demonstrate consistency and control.
This comparison highlights a key point: CSRD readiness is less about producing additional indicators and more about stabilizing procurement foundations so that sustainability data can be trusted, reused and audited without excessive operational effort.
One of the most common mistakes when preparing for CSRD is launching an overly broad or overly theoretical program. A more effective approach is to focus on a 90-day action plan that secures the most critical procurement data and processes first, without disrupting day-to-day operations.
This timeframe is particularly well suited to C-class purchasing, where quick wins can be achieved by structuring supplier data, standardizing flows and clarifying responsibilities. Companies that adopt this phased approach are able to move faster while reducing compliance risk, especially when supported by structured purchasing practices .
A pragmatic CSRD-oriented procurement roadmap can be broken down into three successive phases:
By the end of this 90-day period, procurement teams should no longer be reacting to CSRD data requests. Instead, they operate within a controlled, repeatable and auditable framework that supports both regulatory compliance and operational performance.
Artificial intelligence is often perceived as a technological shortcut to CSRD compliance. In practice, its value lies elsewhere. When properly applied, AI acts as a data reliability accelerator, helping procurement teams secure large volumes of supplier and transaction data without increasing manual workload.
In procurement, AI is particularly effective when it operates on structured foundations. Applied after data standardization, it can detect inconsistencies, highlight missing information and consolidate fragmented inputs. This is especially relevant for C-class purchasing flows, where data dispersion is high and manual controls do not scale. Many organizations already leverage AI capabilities embedded in procurement intelligence solutions to improve data quality and traceability.
From a CSRD perspective, AI delivers concrete benefits across several use cases:
However, automating unreliable data is one of the most common pitfalls in CSRD programs. Deploying AI on poorly governed datasets amplifies existing issues instead of solving them. This is why AI must follow, not precede, strong procurement governance and clearly defined responsibilities. Approaches combining AI with purchasing standardization consistently outperform purely technological initiatives.
European sustainability standards reinforce this principle. Expectations defined within the ESRS framework emphasize not only the availability of ESG indicators, but also their governance, traceability and consistency over time.
When embedded into a structured procurement environment, AI becomes a powerful lever to secure CSRD data at scale, while keeping processes simple, repeatable and audit-ready.
Many CSRD initiatives fail not because of regulatory complexity, but because of structural weaknesses in procurement practices. These failures often appear during audits, when companies struggle to justify how sustainability data is produced, controlled and maintained over time.
One of the most frequent errors is treating CSRD as a periodic reporting obligation rather than an operational transformation. In such cases, procurement teams are asked to collect data urgently, using spreadsheets and manual reconciliations, instead of relying on structured processes such as procurement management frameworks .
The most common procurement-related pitfalls can be summarized as follows:
These issues are particularly visible when supplier information is fragmented and poorly controlled. Without structured supplier management , procurement teams face repeated data quality problems that undermine CSRD credibility.
Avoiding these mistakes does not require additional complexity. It requires prioritization, clear responsibilities and a focus on the procurement foundations that support consistent, auditable and reusable sustainability data.
CSRD introduces a new standard for sustainability reporting: data must be structured, traceable and verifiable. For procurement teams, the challenge is not about producing more indicators, but about securing the data flows that already exist within suppliers, purchasing processes and transactions.
Companies that succeed do not attempt to address every CSRD requirement at once. They focus on the most critical areas, stabilize their procurement foundations and progressively build reliable governance. This pragmatic approach reduces operational pressure while ensuring that sustainability data can withstand external verification.
In most organizations, the real tipping point lies in C-class purchasing. These high-volume, low-value flows concentrate supplier dispersion, data gaps and traceability issues. By structuring these purchases through standardized rules and controlled processes, companies simultaneously improve compliance and procurement performance. Approaches centered on tail spend management illustrate how regulatory readiness and operational efficiency can reinforce each other.
Ultimately, CSRD transforms procurement from a support function into a pillar of sustainable governance. Organizations that invest early in supplier visibility, transaction traceability and data governance move from reactive compliance to controlled, audit-proof reporting.
Starting small does not mean thinking short term. By securing procurement data today, companies lay the foundations for sustainable reporting that remains reliable, repeatable and defensible over time.
Preparing for CSRD does not require reinventing your procurement organization. It requires clarity on priorities, structured data foundations and the ability to secure supplier and purchasing flows without adding operational burden.
If your teams need support to structure C-class purchasing, improve supplier traceability or build an audit-ready procurement framework, our procurement consulting approach focuses on pragmatic actions, measurable results and long-term compliance.
The objective is not to produce more reports, but to install a procurement setup that delivers reliable, repeatable and verifiable data, aligned with both CSRD expectations and business performance.
No. While CSRD primarily targets large European companies, its impact goes far beyond this perimeter. Many organizations are affected indirectly because their customers or contractors require reliable ESG data from suppliers. In practice, procurement teams are often involved early, especially when supplier information is managed through centralized supplier management .
A significant share of CSRD data originates from the value chain, not from corporate declarations. Suppliers, purchasing transactions and contracts generate the information required to document environmental and social impacts. Without structured procurement data, sustainability indicators remain difficult to justify. This is why CSRD reporting depends heavily on controlled procurement-to-pay processes that ensure traceability from purchase request to invoice.
Yes, and they are often the most problematic. C-class purchasing concentrates a high number of suppliers, frequent transactions and limited standardization. This combination creates data gaps, weak traceability and increased audit risk. Structuring these flows through tail spend management is one of the fastest ways to improve CSRD readiness.
No. CSRD does not require uniform treatment of all purchasing categories. A pragmatic approach consists of prioritizing high-risk and poorly structured areas, particularly where data dispersion is highest. Many organizations start by focusing on C-class purchasing before extending governance to other categories through purchasing standardization .
No. AI is not mandatory, but it becomes a strong accelerator once procurement data is properly structured. It can help detect inconsistencies, automate controls and consolidate large datasets. However, applying AI on poorly governed data often amplifies problems instead of solving them. This is why AI should reinforce, not replace, solid procurement foundations such as AI-enabled procurement analytics .
The first step is to assess current procurement maturity: supplier data quality, transaction traceability and governance mechanisms. From there, companies typically secure the most critical data blocks before expanding their scope. A structured approach to C-class spend audits often provides quick visibility on gaps and priorities.
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