S
Supply Chain Transparency
Definition
Supply chain transparency refers to the extent to which a company knows, discloses, and can demonstrate the origin, composition, social, and environmental conditions of its supply chain — from raw material extraction through all production tiers to final product delivery. Regulatory drivers for supply chain transparency include: CSDDD (human rights and environmental due diligence); CSRD/ESRS S2 (workers in the value chain); EU Deforestation Regulation (EUDR); EU Forced Labour Regulation; US Uyghur Forced Labor Prevention Act (UFLPA); and the EU Battery Regulation due diligence requirements.
Source
CSDDD (EU) 2024/1760; ESRS S2 (Workers in the Value Chain); EU Deforestation Regulation (EU) 2023/1115; EU Battery Regulation (EU) 2023/1542; US UFLPA (2021).
Practical Explanation (Compliance Context)
Supply chain transparency is a convergent requirement across multiple regulatory frameworks. Manufacturers face supply chain disclosure obligations from customers (CMRT, EMRT, supplier questionnaires), investors (SFDR PAIs), regulators (CSRD, CSDDD, UFLPA), and standards bodies (GRI 414, RBA Code). Building a supplier engagement programme, BOM-to-origin traceability capability, and supplier sustainability data collection system is essential for compliance with all these frameworks.