This study aims to describe how the institutionalization of the Corporate Sustainability Reporting Directive (CSRD) has taken place and whether it has influenced supply chain management. The background is based on shortcomings identified in previous sustainability regulations, where there has been a need for improved transparency, traceability, and standardization in reporting. With CSRD, stricter requirements are now imposed on companies’ sustainability reporting, which means that many must adapt how they work with their suppliers to ensure compliance with the new reporting obligations.

To achieve the purpose of the study and answer its research question, a qualitative method was applied, including twelve semi-structured interviews, ten with companies affected by CSRD and two with external experts. Together with previous research on institutionalization, sustainability governance, and supplier networks, a holistic result has been presented through an abductive approach.

The analysis of the collected data shows that CSRD has contributed to moving sustainability work closer to the company's governance functions. This has also resulted in the creation of new roles and an increased importance of sustainability data in business decision-making. At the same time, the requirements have influenced the selection and management of suppliers, where sustainability aspects have become more sought after. Despite this, challenges remain in collecting data from suppliers further down the chain, and transparency is still limited. There is also uncertainty about CSRD's long-term impact and how it may affect the competitiveness of EU-based companies.

The conclusion is that CSRD has led to changes in sustainability work within supply chains, but the degree of institutionalization varies. The directive has acted as a driver for internal process changes while also requiring advancements in sustainability efforts, particularly those connected to suppliers. However, further improvement in digital systems, relationships, and strategies is needed for CSRD to drive real change throughout the entire supply chain.