Disclosure focus
This disclosure asks an organisation to explain the policies it has in place for workers in its value chain, and how those policies are used in practice. In plain terms, it is about showing whether the organisation has clear rules or commitments that cover the people who make, handle, transport, sell, or otherwise support its products and services outside its own workforce, and what those rules are meant to achieve.
The practical focus is on whether those policies are broad enough to apply across the relevant parts of the value chain, rather than only to a few visible or high-profile sites or suppliers. The organisation should make clear where the policies apply, who they cover, and whether they are embedded in day-to-day management of supplier and contractor relationships, not just stated at a high level.
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 S2-1 sub-elements (LRA working checklist)
State whether child labour is present or not.
State whether forced labour is present or not.
State whether trafficking is present or not.
Show what share of suppliers is covered.
Describe the ways supplier compliance is enforced.
State whether a supplier code exists.
Set out the countries or regions the policy applies to.
Give the policy’s name.
Say whether the policy applies upstream, downstream, or both.
Identify which worker groups are included.
How to prepare it
1Start by pinning down the policy you are reporting on: record its name, then state whether it applies to activities before your own operations, after them, or both. Add the worker groups it reaches and the countries or regions it covers, so the reporting boundary is clear from the outset.
2Decide what counts as covered for the three labour-risk topics. Use a consistent internal definition for each one, and make sure the team applying the disclosure understands which cases are treated as forced labour, child labour, or trafficking for this report.
3Gather the source material that supports the yes/no answers and the descriptive fields. Pull together the policy document, any supplier standards, and any records that show how the policy is applied across the relevant parts of the value chain and workforce groups.
4Complete the disclosure by entering the three boolean answers and the related narrative or figures. For the supplier standard, state whether one exists, give the share of suppliers it reaches, and describe the ways it is enforced.
5Explain any gaps, exceptions, or changes in approach. If a field is not fully covered in the period, or if the scope has shifted, note that clearly so readers can understand what the numbers and statements do and do not include.
6Check the draft against the source records and the official ESRS wording before sign-off. Confirm that the policy name, scope, worker groups, geography, labour-risk topics, supplier standard coverage, and enforcement details all match the underlying evidence.
Request the data
Request the supplier policy evidence pack
Translate the disclosure into an internal business question — then adapt it to your organisation's own language.
What policy and control evidence do we have for labour-rights expectations across our supplier and other value-chain worker relationships?
Use your organisation’s own terms first, then map them to the reporting categories. For example, if you talk about supplier standards, vendor rules, contractor requirements or partner conduct, use those labels in the request and only translate them afterwards for reporting. Keep the ask in the language the owner already uses internally, and check the official source before sign-off.
Weak request
Please provide the ESRS S2-1 policy disclosures for value chain workers, including the policy, coverage, scope, and enforcement mechanisms.
Why it fails: It uses reporting-framework language that many operational owners will not use day to day, so the recipient has to translate the ask before they can answer. It also does not tell them which internal documents, systems, or business labels to pull from, which makes the request slower and more likely to come back incomplete.
Better request
Please send the current supplier and third-party labour policy pack for [period], including the policy name/version, the supplier groups and worker groups it covers, the countries or regions in scope, the share of suppliers covered, and the controls used to apply it. Use your own internal labels first, then we will map them for reporting.
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 the organisation defined the policy scope, the worker groups included, the geographic boundaries used, and how supplier coverage and enforcement were assessed from the underlying records.
Context note
Set out what the figures show about how far the policy reaches across the business, which supplier groups are covered, and whether the controls are designed to address forced labour, child labour, and trafficking risks.
Fluctuation statement
If coverage or enforcement changed from the prior period, note whether this was driven by a revised policy scope, a wider supplier population, or a change in how the organisation applies its controls.
Content index entry
S2-1 Policies (Value Chain Workers) — [location / page] / [notes]
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Preparation tools & forms
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Assurance readiness
For each claim, check the evidence
Evidence pack to prepare
Common reporting gaps
A percentage is stated without the underlying counts (numerator and denominator).The denominator — what the figure is a share of — is not explained.Partial scope is reported as if it were complete coverage.One-off activities are counted as if they were ongoing programmes.Boundary or period changes that move the figure are not flagged.Exclusions from the reported scope are not listed or explained.
Common gaps
Mistakes to avoid when collecting the data
Wrong owner
Chasing the policy team alone can miss the people who actually run supplier controls, so the answer comes from the wrong desk.
Framework language only
Asking for the data in ESRS-style terms can confuse colleagues, because they know the process by their own internal policy names and control labels.
Scope left vague
If you do not pin down which parts of the supply chain are in scope, teams may mix upstream and downstream coverage or leave out a whole segment.
Wrong worker group split
Combining different groups of external workers into one bucket can hide which group is covered by which policy and blur the result.
Wrong timing basis
Using a different cut-off date or reporting period from the one used in the source records can make the collected data inconsistent with the underlying evidence.
Mixed counting basis
If one source counts suppliers by legal entity and another by site or contract, the coverage figure will not match the same population throughout.
Source labels lost
Copying figures without the original file names, system tags, or document titles makes it hard to trace where each value came from.
Evidence trail missing
When the team keeps the numbers but not the supporting notes, approvals, and version history, no one can show how the data was checked before sign-off.
Where judgement is often needed
Defining the policy boundary after a deal closes
If a business is bought, sold or restructured during the year, decide whether the policy description and coverage figures follow the opening set-up, the closing set-up, or a weighted view, and explain the cut-off used.
Reconciling local labour-law labels to one group policy
Where country-level terms for prohibited work or protected worker groups do not line up neatly, map them to a single internal wording and state how the local differences were handled.
Including workers near the edge of the supply chain
For contractors, agency staff, seasonal labour, home-based workers or other borderline groups, set out whether they are treated as in scope and why that call was made.
Choosing which parts of the chain the policy covers
If the policy applies only to selected buying, production or sales activities, describe the business areas included and excluded, and make clear whether the scope is upstream, downstream or both.
Using a snapshot date or an average view
When the covered population changes through the year, pick one basis for the coverage percentage and say whether it reflects a point-in-time count, a period average, or another consistent method.
Mixing direct records with estimates
If complete headcounts or supplier counts are not available, use a clear estimate method, identify which figures are measured and which are approximated, and explain the main assumptions.
Rounding the coverage percentage
Agree a rounding rule for the supplier coverage figure, apply it consistently, and note it if the published percentage differs slightly from the underlying calculation.
Aggregating sensitive workforce information
Where naming a worker group, country or supplier could expose personal data or create confidentiality issues, combine the information at a higher level and explain the aggregation approach.
Examples
Illustrative examples
Synthetic, written by LRA — not from a company report, not text from any standard.
Illustrative (synthetic) example — Apparel manufacturing
We have a group-wide human-rights policy for our upstream supply chain, covering factory workers, home-based workers, migrant labour, and temporary agency staff across our sourcing countries in Asia, Europe, and North Africa. We also require a supplier code for 92% of direct suppliers by count, and we use audits, corrective-action follow-up, and contract remedies where breaches are found. - In our latest review, we did not identify any confirmed cases of forced labour, child labour, or trafficking in the covered scope.
This is a synthetic, illustrative narrative showing how a reporter might describe a policy, its reach, supplier-code coverage, enforcement approach, and a zero-incident outcome for the three labour-abuse indicators.
Illustrative (synthetic) example — Food processing
Our group applies a labour-rights policy across both our own operations and selected downstream distribution partners, with the main focus on warehouse staff, transport workers, seasonal workers, and agency labour in the UK, Ireland, and Spain. A supplier code is in place for 78% of relevant suppliers, and we back it with training, site visits, escalation to senior management, and suspension of business where needed. - We recorded no confirmed instances of forced labour, child labour, or trafficking in the reporting period.
This is a synthetic, illustrative narrative showing a second plausible reporter with a different sector, broader scope, partial supplier-code coverage, a different enforcement mix, and a zero-incident outcome for the three labour-abuse indicators.
How companies report S2-1 in practice
Real reports where this topic is disclosed. These are report practice, not exact disclosure templates to copy.
Terna S.p.A.
Electric Utilities / IPP / Energy Traders · Italy · 2025
Terna S.p.A.'s 2025 Annual Report includes a Supplier Code of Conduct summarised on page 337, indicating some guidelines related to supply chain practices. There is related context on page 172 about policies concerning value chain workers and processes for engaging with them, but this is not a clear or detailed disclosure. Several expected narrative items on human rights and value chain worker engagement are not found or are unclear in the report, limiting the completeness of the disclosure.
DSV A/S
Air Freight Transportation and Logistics · Denmark · 2025
DSV A/S’s 2025 Annual Report includes references to human rights policies addressing forced labour, human trafficking, and modern slavery, with specific mention of a Human Rights Policy, Code of Conduct, and Supplier Code of Conduct on pages 72-73. The report notes ongoing awareness campaigns to support compliance and states that in 2025, no cases of severe human rights impacts were identified (p.72-73). However, there is no clear or detailed disclosure specifically quantifying or describing labour or forced labour issues in the value chain, and relevant numeric data is unclear (p.47).
Covivio
Real Estate · France · 2025
Covivio's 2025 Sustainability Report provides some related context on policies concerning workers in the value chain, mentioning scope of application, group supervision, and references to third-party standards on page 150, though it does not clearly disclose specific details for this datapoint. The report also references policies related to affected communities across all activities with supervision and third-party standards on page 159, and outlines actions to prevent accidents on construction and operating sites with objectives and delivery dates on pages 151 and 156. However, no clear or quotable evidence was found explicitly addressing the disclosure in question, leaving key narrative details missing or unclear.
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Scenarios to work through
A preparer is drafting the policy note for a group that buys components from Asia and sells finished goods through distributors in Europe. The draft policy covers labour risks in the supply base, but it does not yet say which worker groups are in scope or which countries are covered.
QShould the note stay at that high level, or should it also spell out the policy name, whether it applies upstream, downstream, or both, which worker groups it covers, and the geographic reach?
Reveal model answer →Hide answer ↑It should be more specific. For this disclosure, the policy description needs to identify the policy by name and make clear where along the value chain it applies, which categories of workers it is meant to protect, and the places it is intended to cover. A vague summary is not enough if those details are available.
Why this matters · Give enough context for a reader to see what the policy is, who it is meant to cover, and where it applies.
A company has a supplier standard that bans forced labour, child labour, and trafficking in its direct sourcing network. The same document also says suppliers must pass the rule on to subcontractors, but the preparer is unsure whether to report the policy as covering only direct suppliers or the wider chain.
QHow should the scope be described when the policy reaches beyond first-tier suppliers through contractual flow-down?
Reveal model answer →Hide answer ↑Describe the scope in line with the actual reach of the policy, not just the first layer of suppliers. If the wording and controls extend to subcontractors or other linked parties, the disclosure should reflect that broader upstream coverage. If the policy also touches sales channels or other downstream relationships, that should be stated too.
Why this matters · State the real reach of the policy, including any wider chain coverage, rather than narrowing it to the easiest part to describe.
The legal team confirms the group has a supplier code, and procurement says 82% of suppliers by spend have accepted it. However, there is no clear process for what happens when a supplier breaches the code beyond a general statement that issues are reviewed case by case.
QIs naming the code and giving the coverage percentage enough, or does the disclosure also need to explain how the code is put into practice when breaches occur?
Reveal model answer →Hide answer ↑It needs both. The disclosure should identify the supplier code, show how much of the supplier base it reaches, and explain the practical ways it is enforced. A coverage figure alone does not show whether the code is actually backed by follow-up actions when problems are found.
Why this matters · Pair the policy with its reach and the real-world steps used to make it effective.
A preparer has three separate internal documents: one on labour standards, one on supplier conduct, and one on human rights due diligence. The team is unsure whether to present them as one combined policy or as separate items, and whether to mention that the labour standard is the main document used for value chain workers.
QHow should the policy name be handled if several documents together shape the approach to workers in the chain?
Reveal model answer →Hide answer ↑Use a clear name that matches how the organisation actually frames the approach, and do not force unrelated documents into one label unless that is how the policy set is managed in practice. The key is that the reader can tell which policy or policy set is being referred to, and how it relates to workers in the chain.
Why this matters · Choose a policy label that reflects the organisation’s real structure and makes the disclosure understandable.
Framework references
Related framework references
How this disclosure maps across the major reporting frameworks.
Primary
Related & explore
FAQ
Questions this page answers
How do I use the S2-1 page to prepare a disclosure on workers in the value chain without treating it as an official standard?+−
Use the page as practitioner guidance only: start with the plain-language explainer, then work through the datapoints to prepare, the step-by-step preparation section, and the draft-output section. It is designed to help you assemble a draft and evidence pack, not to replace your organisation’s own reporting judgement or review process.
What datapoints do I need to collect for S2-1 on workers in the value chain?+−
The page lists the datapoints to prepare: forced labour flag, child labour flag, trafficking flag, supplier code adoption, supplier coverage rate, enforcement actions, policy title, policy reach, covered worker groups, and geographic coverage. Use that list to define your data request and check that each item has an owner and source.
How should I set the scope for S2-1 workers in the value chain?+−
The page points you to policy reach, covered worker groups, and geographic coverage as the main scope-setting datapoints. In practice, use those fields to make clear which workers, suppliers, and locations are included in the draft disclosure.
Who should own the S2-1 data collection and sign-off process?+−
The page is built for sustainability/ESG managers, HR or data owners, and assurance reviewers, so ownership should sit with the people who can confirm the underlying data and evidence. Use the workbook and evidence pack to assign each datapoint to a named owner before drafting.
What evidence pack do I need to make an S2-1 disclosure assurance-ready?+−
The page includes an evidence pack with five items for assurance readiness, alongside six assurance claims to verify. Use those materials to build a file that links each reported point back to source evidence and a clear reviewer trail.
What are the six assurance claims on the S2-1 page and how do I use them?+−
The page says there are six assurance claims to verify, each framed around claim, risk, and evidence. Use them as a checklist to test whether the draft disclosure is supported by the underlying records before it goes to review.
What are the common reporting gaps or mistakes for S2-1 workers in the value chain?+−
The page includes a list of common reporting gaps and mistakes to help you avoid weak or incomplete drafting. Use that section as a pre-submission check, especially where a datapoint is missing, unclear, or not backed by evidence.
How do I use the Prep & Assurance workbook for S2-1?+−
The Download Centre includes a Prep & Assurance workbook in .xlsx format. Use it to organise the datapoints, track ownership, and assemble the evidence needed for a draft and assurance review.
What is the printable Library Card for S2-1 and when should I use it?+−
The Download Centre also includes a printable Library Card in .pdf format. Use it as a quick reference while you are preparing the disclosure, checking the evidence pack, or reviewing the draft output.
How do I turn the S2-1 page into a draft disclosure?+−
The page has a draft-output section with visualisation ideas, narrative starters, and a content-index line. Use those prompts to turn your collected data into a short narrative and a structured draft that matches your internal reporting format.
More questions this page can help with
What does the S2-1 plain-language explainer cover?Which S2-1 datapoints are qualitative and which are quantitative?How do I check supplier coverage rate for S2-1 before drafting?How do I document policy title and policy reach for S2-1?How do I evidence enforcement actions for S2-1 workers in the value chain?What should I include in an S2-1 evidence pack for assurance review?How can I use the synthetic illustrative example disclosures on the S2-1 page?What visualisation ideas does the S2-1 draft-output section suggest?How do I use the content-index line in the S2-1 draft-output section?Where can I find real published reports linked from the S2-1 page?How do I avoid the most common S2-1 reporting gaps before sign-off?Can I use the S2-1 page to map to ESRS or IFRS requirements?
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