Disclosure focus
This disclosure asks an organisation to explain the social targets it has set for its own workforce and how those targets are being used in practice. In plain terms, it is about showing what the organisation is trying to improve, why those aims matter, and how far progress has gone against them. The focus is on being specific enough that a reader can understand the target, the intended outcome, and whether the organisation is on track.
Practically, the reporting should cover the organisation’s own operations and workforce in a way that is not limited to a few headline sites or isolated initiatives. The key question is whether the targets apply across the relevant parts of the business, how they are monitored, and whether they reflect the main social issues affecting workers. If a target only covers part of the organisation, that limitation should be clear.
This LRA educational guidance supports disclosure preparation. For the exact requirements, always refer to the official EFRAG source.
Before you start
A quick mental checklist before you prepare this disclosure — tick each as you settle it.
Preparation
Key datapoints to prepare
＋ Show S2-4 sub-elements (LRA working checklist)
Set the starting point used for comparison.
Show how the measure connects to the relevant performance indicator.
State which supplier groups or categories are covered.
Set out the target figures to be reached.
Specify the time period for delivery.
How to prepare it
1Set the boundary first: decide which supplier groups or categories are in scope for the target, and make that scope explicit in your working papers.
2Define the target itself in business terms: state what outcome you are aiming for, and link it to the relevant performance measure you will use to track it.
3Fix the starting point: identify the baseline you will compare against, and keep the source data or assumptions that support that starting point.
4Pin down the timing: record the period or milestone by which the target is meant to be reached, and keep the evidence that supports that timetable.
5Gather the support for the numbers or narrative: collect the records, calculations, and explanations that show how the target, scope, baseline, timeline, and measure connect to each other.
6Check the final draft against the official source: confirm you have covered every required element, note any exclusions or changes in approach, and resolve any gaps before sign-off.
Request the data
Request the supplier target details
Translate the disclosure into an internal business question — then adapt it to your organisation's own language.
What supplier-related targets do we have in place, and what are their scope, starting point, timing and link to our supplier performance measures?
Use your organisation’s own language first for supplier groups, categories, scorecards and performance measures, then map those terms to the disclosure fields. Keep the request in business terms your team already uses, and check the source material before sign-off.
Weak request
Please provide the ESRS S2-4 targets, including scope, baseline, timeline and KPI linkage.
Why it fails: This uses framework language that many operational teams will not use day to day, so it is easy to answer incompletely or with the wrong internal records. It also does not tell the owner what practical evidence to pull or how to describe the target in their own terms.
Better request
Please send the supplier target tracker for [reporting period]. For each target, include the supplier group or category covered, the starting point, the end date or milestone, and the scorecard or measure it sits against. Attach the tracker, approval note, or dashboard extract, and keep your team’s own labels so we can map them later. Please check the source material before sign-off.
Industry examples
Draft your disclosure
Notes that turn data into a disclosure
LRA training templates — adapt them to your organisation, and check the official source before sign-off.
Method note
Explain how each target was set out in practical terms, including the starting figure used, the business areas or supplier groups covered, the time period for delivery, and the performance measure used to track it.
Context note
Set out what the target figures mean in practice by showing the gap between the starting point and the intended outcome, and by clarifying which parts of the supply chain or other categories are included.
Fluctuation statement
If the target set has changed, explain whether the shift comes from a revised starting point, a wider or narrower scope, a different delivery date, or a change in the indicator used to follow progress.
Content index entry
S2-4 Targets — [location / page] / [notes]
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Assurance readiness
For each claim, check the evidence
Evidence pack to prepare
Common reporting gaps
The information is presented without a date or as-at point.The scope or boundary of the statement is left undefined.Key terms are used inconsistently across the report.Material changes since the previous period are not disclosed.Assertions are made without supporting detail or a source record.Boilerplate is used that does not actually answer what is asked.
Common gaps
Mistakes to avoid when collecting the data
Wrong owner
The team asks someone who does not hold the target data in their day-to-day work, so the figures come back second-hand and unverified.
Framework language only
People ask for the information using reporting jargon instead of the business terms the owner uses, and the answer does not match the organisation’s own records.
Unclear scope
No one states which supplier groups or categories are in or out, so different teams collect different populations and the result cannot be compared.
Wrong reference period
The data is pulled for the wrong time window or timing basis, so the target values do not line up with the period the organisation is trying to describe.
Mixed counting basis
One source counts items one way and another source counts them differently, and the combined set no longer sits on a single consistent basis.
Source labels lost
The original names from the underlying files or systems are stripped out during collection, making it hard to trace each figure back to its starting point.
Populations merged too early
Separate supplier sets or category groups are blended before checking them, which hides differences that should stay distinct for the target data.
No evidence trail
The collector keeps the numbers but not the supporting notes, file dates, or approval trail, so the team cannot show how the data was assembled.
No sign-off record
The final dataset moves forward without a named reviewer confirming it, leaving no clear record of who checked the target information before use.
Where judgement is often needed
Set the target boundary after a buy, sale, or reorganisation
If the supplier group or category mix changes because of acquisitions, disposals, or internal restructuring, explain whether the target now follows the new operating boundary or stays anchored to the earlier one, and show how the baseline and timeline were adjusted.
Handle country-by-country definitions with one internal rule
Where the same supplier type or category is described differently across markets, choose one internal mapping rule, apply it consistently, and explain the translation so readers can see how the target scope was built.
Decide how to treat suppliers sitting just inside or outside scope
For suppliers, categories, or spend lines near the edge of the chosen scope, state the inclusion rule you used, why it was chosen, and whether any borderline cases were grouped, excluded, or tracked separately.
Choose the baseline date and keep the reason visible
If several plausible starting points exist, pick one baseline date or period, explain why it is the right anchor for the target, and say whether later restatements were made when the underlying business mix changed.
State whether the target is built from measured data or estimates
If the target relies partly on estimates, proxies, or modelled figures rather than direct records, say which parts are estimated, how they were derived, and how that affects confidence in the target value and progress tracking.
Explain how rounding affects the target and progress figures
If numbers are rounded for presentation, disclose the rounding rule and make sure the rounded target, baseline, and progress figures still reconcile logically when read together.
Use a privacy-safe level of aggregation for sensitive supplier data
When detailed supplier information cannot be shown because of confidentiality or privacy limits, present the target at a higher grouping level, explain the aggregation choice, and make clear what detail has been withheld.
Align the target timeline with the KPI used to track it
If the target is linked to a performance measure that is reported on a different cycle or basis, explain the link, the timing used for each, and how readers should compare the target with the KPI trend.
Examples
Illustrative examples
Synthetic, written by LRA — not from a company report, not text from any standard.
Illustrative (synthetic) example — Food processing
We set a time-bound reduction aim for the supplier issue we track, using our 2024 position as the starting point and measuring progress against the same indicator each year. - Our baseline is 42 confirmed supplier cases in 2024, covering direct suppliers and the highest-risk raw-material categories in scope. - The target is 25 cases by 2027, and we will judge delivery through the same supplier-risk KPI used in our management reporting, so the measure stays aligned with our internal dashboard.
This example shows how a company can describe a supplier-related target in plain language while still covering the starting point, the coverage boundary, the deadline, and the linked KPI.
Illustrative (synthetic) example — Apparel retail
We have a staged plan to reduce the labour-rights issue we monitor across our own-brand supply chain, and we will track it with the same metric used in our quarterly risk review. - Our starting point is 18 verified supplier incidents in 2023 across tier 1 factories and nominated fabric mills. - We aim to bring that down to 9 incidents by 2026, with progress assessed against the supplier-conduct KPI that feeds our internal scorecard.
This example shows a different sector and a different target design, while still making clear the baseline, the supplier coverage, the end date, and the KPI used to follow progress.
How companies report S2-4 in practice
Real reports where this topic is disclosed. These are report practice, not exact disclosure templates to copy.
Coca-Cola HBC AG
Food and Beverage Processing · Switzerland · 2024
Coca-Cola HBC AG’s Sustainability Statement 2024 includes some contextual references to targets, their duration, baselines, and alignment with international initiatives on pages 72, 73, 78, 120, and 132, but these references do not clearly disclose specific datapoints related to the disclosure (p.72, p.73, p.78, p.120, p.132). The report mentions the company’s policy to develop relationships with suppliers sharing similar ethical values (p.113), yet no concrete performance data or clear target descriptions are provided. Several expected datapoints are missing or not found, leaving the disclosure incomplete or unclear.
Poste Italiane S.p.A.
Banks / Diverse Financials / Insurance · Italy · 2024
Poste Italiane S.p.A.'s Annual Report 2024 includes references to targets, baselines, and results achieved within the reporting year, mentioned on pages 281, 273, 296, 308, and 381, indicating some level of performance tracking. Specific key performance indicators (KPIs) related to turnover and capital expenditures are noted on page 281, with coverage figures provided on pages 273 and 281. However, no clear narrative or detailed explanation of these disclosures is found in the report, as no quotable evidence or comprehensive narrative items are present.
LANXESS Aktiengesellschaft
Chemicals · Germany · 2025
LANXESS Aktiengesellschaft’s Corporate Sustainability Report 2025 provides a baseline value of 861 metric tons for a target set with the base year of 2024, as noted on page 50. The report also references Scope 1, 2, and 3 greenhouse gas emissions, including details on raw materials purchased from suppliers (p.73), and transportation emissions in upstream and downstream categories (p.38). However, no additional specific narrative items or detailed quantitative data related to the disclosure were found elsewhere in the report.
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Scenarios to work through
A procurement team has set a goal to reduce serious labour-rights incidents in its direct supplier base, but the draft note only says the aim is to “improve supplier standards” and does not say which supplier group is covered. The team also has a baseline from last year, but it is not yet linked to the target statement.
QWhat should the preparer do before sign-off so the target can be understood and traced properly?
Reveal model answer →Hide answer ↑They should rewrite the target in plain business terms so it states the intended end point, identifies which supplier group or category it covers, and shows the starting point used for comparison. If the target is tied to a wider programme, the link to the baseline should be clear enough that a reader can see what is being measured and against which population.
Why this matters · A target is only useful if the audience can see what is being aimed at, who it covers, and where the comparison starts.
A company has announced a supplier-wellbeing target for 2030, but the draft report gives no date by which progress should be achieved and no interim milestone. The underlying KPI is tracked monthly, yet the narrative does not say how that measure connects to the target.
QHow should the preparer handle the timing and KPI connection in the disclosure?
Reveal model answer →Hide answer ↑They should add the time horizon for the target and explain how the chosen KPI supports it. If the organisation uses a monthly measure to monitor progress, the disclosure should make the relationship between that measure and the longer-term target clear, so readers can tell how delivery will be checked over time.
Why this matters · A target needs a clear deadline and a visible link to the indicator used to track progress.
The sustainability team has two supplier-related targets: one for training completion among high-risk suppliers and another for audit follow-up closure. The draft combines them into one paragraph, but it is unclear whether both targets share the same baseline or whether each has its own starting point and timetable.
QWhat judgement should the preparer make about presenting multiple targets?
Reveal model answer →Hide answer ↑They should separate the targets enough that each one can be understood on its own, including its own starting point, timing, and scope. If the targets are different, the report should not blur them together in a way that makes it impossible to see which baseline or timeline belongs to which aim.
Why this matters · When there is more than one target, each one needs its own clear set of details unless they truly share the same basis.
A business has set a target to increase responsible sourcing coverage across selected supplier categories, but the draft wording uses internal jargon and does not explain whether the target applies to all suppliers or only certain groups. The KPI is mentioned, but the report does not show how it relates to the target value.
QWhat is the best way for the preparer to frame the target disclosure so it is understandable to a reader outside the team?
Reveal model answer →Hide answer ↑They should translate the target into ordinary language, state the supplier categories or groups it applies to, and show the target value together with the measure used to monitor it. The wording should let a reader see the scope of the ambition and how the KPI supports the target, without needing internal shorthand to decode it.
Why this matters · Use plain language and make the scope, value, and tracking measure easy to follow.
Framework references
Related framework references
How this disclosure maps across the major reporting frameworks.
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FAQ
Questions this page answers
How do I use the S2-4 page to prepare a disclosure on workers in the value chain?+−
Start with the plain-language explainer, then work through the step-by-step preparation section and the datapoints to prepare. The page is designed to help you turn source information into a draft disclosure, not to replace your own judgement or internal process.
What data do I need to collect for S2-4 before I can draft the disclosure?+−
The page says to prepare target setting details, coverage of suppliers, starting point value, delivery timetable, and metric alignment. Use those datapoints as your minimum data checklist before drafting.
How should I define the scope for S2-4 workers in the value chain?+−
Use the page’s coverage of suppliers datapoint to set the scope and be clear about which supplier population the disclosure covers. The page also points you to the step-by-step preparation section, which is where you would document that scope choice.
Who should own the S2-4 disclosure process in practice?+−
The page is aimed at sustainability or ESG managers, HR or data owners, and assurance reviewers, so ownership should sit with the person or team that can coordinate those inputs. The page itself does not assign roles, so you would use it to support internal ownership rather than to define it.
What should I include in the evidence pack for S2-4 assurance readiness?+−
The page includes an evidence pack with five items to support assurance readiness. Use it alongside the six assurance claims to verify so you can show the claim, the risk, and the supporting evidence clearly.
What are the common mistakes to avoid when drafting S2-4?+−
The page lists common reporting gaps and mistakes, so it is useful as a pre-submission check. Use it to spot missing datapoints, weak scope descriptions, or unsupported claims before you finalise the draft.
How do I use the synthetic example disclosures on the S2-4 page?+−
They are there to show what a finished disclosure can look like, including a quantitative table where relevant. Treat them as illustrative only and make sure any numbers in your own draft are internally consistent.
Can I use the S2-4 workbook to build my draft disclosure?+−
Yes. The Download Centre includes a Prep & Assurance workbook in .xlsx format, which is intended to help you organise the preparation and assurance steps before drafting.
What is the printable Library Card for S2-4 used for?+−
The Download Centre includes a printable Library Card in .pdf format, which you can use as a quick reference while preparing the disclosure. It sits alongside the workbook rather than replacing the main page content.
How do I turn the S2-4 page content into a draft narrative?+−
Use the draft-output section, which gives visualisation ideas, narrative starters, and a content-index line. That section is designed to help you move from prepared data to a first draft.
Where can I find real company examples for S2-4 workers in the value chain?+−
The page has a 'From company reports' table that links to real published reports at the pages where the topic is disclosed. Use it for reference points, but the page does not claim an exact framework mapping.
More questions this page can help with
What are the five evidence pack items on the S2-4 page?What are the six assurance claims to verify for S2-4?How do I check whether my S2-4 target setting details are complete?What does metric alignment mean in the S2-4 datapoints to prepare?How do I document the starting point value for S2-4?How should I describe delivery timetable in an S2-4 disclosure draft?What should I do if my S2-4 supplier coverage is incomplete?How can the S2-4 step-by-step preparation section help with assurance?What should I put in the content-index line for S2-4?How do I use the visualisation ideas on the S2-4 page in a report?Can I use the company report links as evidence for S2-4?How do I avoid overclaiming in an S2-4 disclosure draft?
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247 practitioner guides
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