How CSRD’s Double Materiality Requirement Affects All Companies — Large and Small

Under the Corporate Sustainability Reporting Directive (CSRD), the concept of double materiality is one of the most significant changes compared to previous reporting frameworks. For companies, double materiality introduces new complexities — particularly when it comes to tracking emissions and environmental impact across the supply chain.

When most people hear about the Corporate Sustainability Reporting Directive (CSRD), they assume it only applies to the biggest corporations. And while it’s true that reporting obligations begin with large listed companies in 2024, the effects go far beyond them:

• 2024: Large public-interest companies (>500 employees) start reporting in 2025.
• 2025: Large companies (>250 employees, €40m turnover or €20m balance sheet) start reporting in 2026.
• 2026: Listed SMEs start reporting in 2027 (with an option to delay until 2028).

But here’s the catch: SMEs that are not directly in scope are already being pulled in. Why? Because large companies must report on their Scope 3 emissions — which include subcontractors, logistics partners, and suppliers.

That means SMEs are increasingly being asked to provide data on fuel use, kilometres driven, emissions factors, and sustainability measures. In other words: even if you’re not required to report yet, your customers might require you to.

For both large corporations and smaller hauliers, logistics firms, or suppliers, this makes understanding double materiality and value chain emissions essential — today, not tomorrow.

What is Double Materiality?

Double materiality requires companies to assess and report on two dimensions of sustainability performance:

1. Impact Materiality – How the company’s activities affect the environment and society.
2. Financial Materiality – How sustainability risks and opportunities (e.g., climate change, regulatory shifts) impact the company’s financial health and performance.

This means reporting is no longer limited to direct emissions and operational performance — it extends to the entire value chain, including the environmental and financial consequences of third-party suppliers and subcontractors.

What Does This Mean for your company?

Large corporations, haulers and logistics providers are in a unique position because their environmental impact is not only driven by their own fleet and operations (Scope 1 and Scope 2) but also by the broader transport ecosystem — including the subcontractors and transport partners they work with (Scope 3).
Learn more about Scope 1, 2 and 3 here.

Scope 3 emissions represent the most complex and significant challenge under the CSRD for companies because they include emissions from subcontractors and third-party partners.

Scope 3 emissions include:
• Emissions from transport subcontractors you hire to carry goods.
• Fuel consumption from third-party transport providers.
• Emissions from upstream suppliers (e.g., fuel producers).
• Lifecycle emissions of the vehicles in your fleet.
• End-of-life emissions from scrapping vehicles or equipment.
• Business travel and employee commuting.

Example:
If you subcontract a third-party logistics company to deliver goods, the emissions from their trucks will count as your Scope 3 emissions under the CSRD.

Why Scope 3 emissions are critical

For most companies, Scope 3 emissions account for 60%–80% of total emissions. If your subcontractors use fossil fuels or operate inefficient fleets, their emissions will reflect negatively in your overall sustainability report.

Tracking Scope 3 emissions requires collaboration across the supply chain. You need accurate data from subcontractors on fuel consumption, emissions factors, and transport volumes.

Example:
If you hire a subcontractor for last-mile delivery, you’ll need to gather data on the type of fuel they use, distance travelled, and load weight — and then integrate that into your sustainability report.

Even if your company isn’t directly required to publish a CSRD report yet, you may already feel the effects because:

• Large customers must report Scope 3 emissions (value chain emissions).
• This includes emissions from subcontracted hauliers, logistics partners, and suppliers.
• SMEs will increasingly be asked to provide data on fuel use, kilometres driven, emissions factors, and sustainability measures.
• Tenders may start including requirements for fossil-free fuels like HVO100.

In other words: SMEs are being “pulled into CSRD” through customer contracts and reporting obligations.

How Companies Can Meet Scope 3 Reporting Requirements

Scope 3 reporting may feel overwhelming — especially for transport and logistics companies where subcontractors play such a big role. But with the right approach, tools, and partnerships, it’s possible to turn this complex task into a structured process that delivers both compliance and competitive advantage.

Use Renewable Fuels Like HVO100
Switching to renewable fuels like HVO100 can significantly reduce Scope 1 and Scope 3 emissions.
• HVO100 reduces lifecycle emissions by up to 90% compared to fossil diesel.
• Subcontractors using HVO100 will contribute lower emissions to your overall Scope 3 profile.

Engage with Subcontractors Early
• Establish emissions reporting standards for all subcontractors.
• Include emissions reporting requirements in subcontractor contracts.
• Encourage subcontractors to switch to renewable fuels and cleaner technologies.

Invest in Emissions Tracking Tools
• Use platforms like Biofuel Express Insight to track and measure emissions from subcontractors and direct operations.
• Provide subcontractors with guidance on how to collect and report accurate emissions data.

Partner with Sustainable Suppliers
• Choose subcontractors and fuel providers that are aligned with your sustainability goals.
• Partner with suppliers certified under recognized sustainability standards (e.g., ISCC).

Start Early and Build a Framework
• Establish an internal emissions tracking framework.
• Start with pilot projects to refine data collection and reporting methods.
• Develop an emissions reduction roadmap aligned with CSRD requirements.

If you’re ready to explore how to reduce emissions and simplify compliance, get in touch with us. We help you turn complex regulation into measurable impact.