A Social Risk‐Based Approach Supporting Corporate Sustainability Reporting Directive Framework

ABSTRACT Social sustainability is difficult to measure due to its qualitative and context‐specific nature. However, regulatory pressure and stakeholder expectations increasingly require organisations to disclose robust and verifiable information. In this context, the European Corporate Sustainability Reporting Directive (CSRD) sets new sustainability reporting standards. This paper proposes a social risk‐based decision‐making approach that integrates Social Organisational Life Cycle Assessment (SO‐LCA) and risk assessment tools to enhance reporting accuracy and transparency. A methodological framework was developed to combine SO‐LCA principles with a social risk mapping tool (RMT), aligned with CSRD requirements. A case study was conducted on a multinational packaging company operating in 16 countries. This study assessed the impact category ‘Labour Rights and Decent Work Conditions’ using the Social Hotspot Database (SHDB) RMT. Indicators were mapped against the CSRD's ‘Own Workforce’ reporting datapoints (EFRAG IG3 2024). The risk mapping identified significant variations in social risks across geographies. India, Thailand and China emerged with the highest frequencies of very high‐risk indicators, whereas Germany and France showed the best performance. The results provide prioritisation insights for monitoring and mitigation actions. Cross‐analysis confirmed strong alignment between RMT indicators and mandatory CSRD disclosure points. SO‐LCA and CSRD are complementary tools for social risk governance. Integrating social life cycle thinking into reporting improves decision‐making, enhances transparency and supports compliance. The proposed approach provides a practical pathway for companies to structure social data collection, identify social hotspots and align with evolving EU sustainability requirements.