C1 Business Model and Value Chain: How to Write a Useful Comprehensive Disclosure

Technical status note. The Commission adopted C(2026) 5011 final on 3 July 2026. As at 1 August 2026, the delegated act was under European Parliament and Council scrutiny and had not yet completed the process leading to application. Recheck the Official Journal version, entry into force and any corrections before publication or client use.

Use note. This material separates requirements in the 2026 Voluntary Standard from London Reporting Academy implementation practices and illustrative wording. It does not replace the official text, legal analysis or entity-specific review.

A weak C1 disclosure repeats the website: it lists products, says the organisation serves “global markets” and adds that it values responsible relationships. That wording does not help a bank, customer or investor understand where the business model depends on particular inputs, channels, geographies or relationship types. It also does not create a reliable bridge to climate, workforce, human-rights or governance information elsewhere in the report.

A useful disclosure is selective rather than exhaustive. It identifies the groups that are significant to the undertaking, describes markets at the level needed to understand exposure and demand, and explains the relationship categories on which value creation depends. It then adds sustainability-related strategy elements only where those elements genuinely exist. The result should be recognisable to management and traceable to operating and commercial evidence.

Figure 1. C1 business-model disclosure map: a practical sequence for connecting products, markets, relationships, dependencies and strategy.

For an undertaking applying the Comprehensive Module, paragraph 46 requires disclosure of the key elements of the business model and strategy. The disclosure covers four components. The first three are descriptions of significant product or service groups, significant markets and main business relationships. The fourth applies when the strategy has key elements that relate to or affect sustainability issues: in that case, those elements are briefly described.

Significant groups of products and/or services offered.

Significant markets, which may be described by customer type, wholesale or retail model, channel and country or region.

Main business relationships, such as key supplier, customer and distribution-channel categories.

A brief description of sustainability-related strategy elements, where such elements exist.

The Standard defines the value chain broadly. It includes activities, resources and relationships used or relied upon from conception through delivery, consumption and end-of-life, as well as relevant financing, geographical, geopolitical and regulatory environments. C1 itself remains concise; the broad definition is a reminder not to reduce the business model to direct operations only.

A legal-entity-by-legal-entity description of the group or every operating site.

A named list of all suppliers, customers, distributors, lenders, platforms or advisers.

Disclosure of confidential contract terms, unit prices, margins or commercially sensitive negotiation positions.

A quantified supply-chain footprint or a complete climate, human-rights or due-diligence assessment inside C1.

A separate graphic value-chain map, although a map can be a useful implementation tool.

A claim that every sustainability issue has been integrated into strategy.

These negative boundaries matter. C1 should be informative, but it should not become an uncontrolled transfer of commercial information. Paragraph 22 permits omission in specified circumstances, including exceptional serious prejudice to the commercial position and qualifying trade secrets. That exemption is not automatic: the undertaking must identify its use in B1 for each omitted datapoint and reassess the omission at every reporting date.

1. Lock the reporting boundary and reporting period

Start with the B1 basis: individual or consolidated reporting, the subsidiaries included, the period and the principal locations. C1 should describe the same undertaking. A group-level C1 that silently excludes a material subsidiary, or a standalone C1 that describes group-wide products, creates an immediate scope inconsistency.

2. Group products and services by economic logic

Do not copy the full product catalogue. Group offerings according to the way management monitors the business: product families, service lines, customer solutions, regulated versus non-regulated activities, or recurring versus project-based services. A group is significant when omitting it would distort the reader’s understanding of how the undertaking earns revenue, uses resources or encounters sustainability issues. “Significant” is not defined as a fixed percentage, so the judgement and evidence should be documented.

3. Describe markets through demand, channel and geography

“Europe” or “global” is often too broad. Combine three lenses where relevant: who buys, how the offering reaches them and where activity is concentrated. For example: “Business-to-business sales to food and household-goods manufacturers in the United Kingdom, France and Benelux, primarily through direct account management, with a smaller distributor channel in Southern Europe.” This is specific without becoming a sales ledger.

4. Map the main relationship categories

Work upstream, through own operations and downstream. Ask which relationships are necessary to obtain inputs, deliver the product, reach the customer, finance activity or meet regulatory conditions. Main relationships may include critical material suppliers, contract manufacturers, logistics providers, digital platforms, franchisees, distributors, large customer categories, insurers, banks and specialist labour providers. Describe the relationship category first; consider a name only after the information need and confidentiality test.

5. Add dependencies, concentrations and transmitted sustainability issues

C1 does not expressly require a separate dependency or risk schedule. However, carefully selected dependency information is an implementation practice that makes the required relationship description useful and may support additional entity-specific information under paragraph 13. Examples include dependence on a water-stressed site, a small number of approved suppliers, energy-intensive cold storage, specialised engineering skills, a regulated distribution licence or a customer market exposed to product-transition requirements.

Use neutral, supportable language. “The business depends on three certified suppliers of a specialised polymer, with qualification of an alternative source typically taking six to nine months” is more informative than “our supply chain is resilient”. It also avoids asserting a risk conclusion that has not been assessed.

6. Describe sustainability-related strategy only at the maturity reached

C1(d) is conditional: if the strategy has key elements that relate to or affect sustainability issues, describe them briefly. A board-approved redesign of a product line, a planned shift to lower-carbon logistics, a supplier-diversification programme or investment in water efficiency can qualify. A general aspiration or an unapproved idea should not be presented as a strategic element. Link detailed policies, initiatives and targets to B2 and C2 rather than duplicating them in C1.

Before naming a counterparty, move through the following hierarchy. Each level should add enough specificity to satisfy the reader’s information need while preserving legitimate confidentiality.

Relationship type: supplier, distributor, strategic customer group, logistics provider or platform.

Product or service dependency: the input, capability or channel supplied.

Geography and channel: country, region, direct sales, wholesale, retail or online.

Concentration: number of relationships, qualitative concentration or an approved percentage range.

Sustainability relevance: the impact, dependency, transition issue or operational vulnerability transmitted through the relationship.

Response or control: qualification, diversification, monitoring, contractual conditions or contingency arrangements.

Figure 2. Confidentiality-safe C1 drafting ladder: how to add decision-useful specificity before considering a counterparty name.

Illustrative scenario. Northbridge Packaging Ltd manufactures flexible food packaging and reusable transport sleeves. It sells mainly to food manufacturers in the United Kingdom and northern Europe. Polymer film, inks and specialist barrier coatings are sourced from a limited number of approved suppliers. The company’s largest customers are subject to packaging-reduction commitments, but customer and supplier contracts contain confidentiality provisions.

The reporting team initially proposes naming the five largest customers and two coating suppliers. Review concludes that the names are not necessary. The disclosure instead describes customer and supplier categories, geography, concentration and the six-to-nine-month qualification period for alternative coating suppliers. It also describes a board-approved strategy to increase recyclable mono-material packaging and diversify specialised inputs. Detailed targets and actions are cross-referenced to C2 and C3 rather than repeated.

Adaptation warning. The example is not a compliant template. Every product group, market, concentration, dependency, time period and strategy claim must be replaced with the undertaking’s own evidence. If a required datapoint is actually omitted under paragraph 22, the undertaking must follow the formal B1 disclosure and annual reassessment conditions.

Does C1 require a formal value-chain diagram?

No. The Standard requires the specified descriptions. A diagram can help internal analysis or publication, but it should not replace a clear narrative and evidence trail.

Can we use revenue percentages to define significant product groups?

Yes, as an implementation criterion, but revenue should not be the only test where a smaller activity creates a major dependency, sustainability issue or strategic transition. Document the selected criteria.

Should we disclose a single-customer concentration?

Describe the concentration at the level needed to understand the business model and dependency. The exact identity or percentage is not automatically required by C1. Consider other reporting obligations and confidentiality before publication.

Can C1 refer to another document?

Paragraph 21 permits references to disclosures in other documents that are accessible at the same time and from the same document set. The reference should be precise and the combined information should still satisfy C1.