A Value Chain Hot Spot Analysis visualizes sustainability challenges, opportunities and impact areas along the value chain steps
CSRD and ESRS will require many new companies to report on sustainability ( → prev. post: CSRD, EFRAG & ESRS – Frequently asked Questions Vol. 1). We introduce reporting topics and comment on how companies can comply and generate value out of those. We started with Materiality (→ prev. post: Materiality – Comply with CSRD and get sustainable) & Strategy (→ prev. post: Strategy – Comply with CSRD and get sustainable). Let’s continue with Value Chain Analysis.
Companies need to analyze their value chain as a basis for reporting.
➡️ End-to-End Value Chain:
from raw materials to post-use: the company analyzes all steps, features and participants in their value chain granular enough that sustainability risks, opportunities and impacts can be analyzed.
➡️ Key drivers of Value Creation:
the company needs to describe how value is created and distributed in the value chain to the respective interests of all stakeholders.
➡️ Reporting boundaries in the Value Chain:
the company needs to describe the boundaries for reporting with respect to value chain steps, the company has information e.g. from direct supplier and where the company has no information.
➡️ Hot Spots in the Value Chain:
a hot spot analysis visualizes sustainability challenges, opportunities and impact areas along the value chain steps.
➡️ Material topics and Collaborative Actions:
concluding a company derives topics for the materiality analysis from the value chain analysis and identify collaboration opportunities with value chain partners for sustainability improvement.
→ Mid-sized companies can use the hot spot analysis as an easy visualization and overview an material issues to be tackled and collaboration opportunities with partners and customers.