Executive Summary
The NIS2 Directive significantly extends cybersecurity obligations beyond direct organisations to include third-party vendors and supply chain partners. This shift presents new challenges for procurement managers, risk and compliance teams, and cybersecurity experts, who must ensure that suppliers align with NIS2 and ISO 27001 standards.
This white paper explores how NIS2 impacts the supply chain, outlines effective third-party risk management strategies, and presents best practices for enforcing secure vendor relationships. Organisations that fail to address these risks could face regulatory penalties, operational disruptions, and reputational damage.
1. Introduction
1.1 Understanding the NIS2 Directive’s Supply Chain Implications
The NIS2 Directive, which replaces the original NIS Directive (2016), enhances cybersecurity across critical and important entities within the EU. One of its key changes is the increased accountability for third-party cybersecurity risks.
Under NIS2, organisations are now responsible for ensuring that their suppliers and service providers adhere to cybersecurity best practices. This means procurement teams and compliance officers must establish stronger vendor risk management frameworks to avoid regulatory non-compliance and potential cyber threats.
1.2 Why Supply Chain Security Matters
Cybercriminals often target supply chains as weak links in an organisation’s security posture. A single compromised vendor can introduce vulnerabilities across multiple organisations, leading to widespread security breaches.
Key Statistics on Supply Chain Risks:
- 60% of data breaches originate from third-party vendors.
- Only 37% of organisations have full visibility into their supplier cybersecurity practices.
- The average cost of a third-party data breach is €4.35 million.
Ensuring supply chain security is not just about compliance—it is a critical component of risk mitigation.
2. How NIS2 Extends Cybersecurity Obligations to the Supply Chain
2.1 Broader Scope of Responsibility
NIS2 categorises organisations as Essential or Important Entities, both of which must ensure that third-party vendors meet security requirements. This includes suppliers that provide:
- IT and cloud services
- Operational technology (OT) components
- Critical infrastructure support
- Outsourced cybersecurity services
Under NIS2, companies must demonstrate proactive supplier risk management, ensuring that vendors adhere to security policies, implement risk controls, and maintain audit trails.
2.2 Key Supply Chain Security Requirements Under NIS2
NIS2 introduces the following obligations related to third-party risk management:
- Risk Assessments: Companies must evaluate suppliers based on cyber resilience, security controls, and incident response capabilities.
- Security Agreements: Contracts must include clear cybersecurity obligations, SLAs, and compliance clauses.
- Monitoring and Audits: Organisations must conduct regular audits and security assessments of suppliers.
- Incident Reporting: Third-party providers must comply with incident reporting requirements, including 24-hour initial reporting and 72-hour full disclosure.
3. Third-Party Risk Management Strategies for NIS2 Compliance
3.1 Establishing a Supplier Risk Management Framework
To align with NIS2 and ISO 27001, organisations should implement a structured risk management approach that includes:
✔️ Risk-Based Supplier Classification
- Critical Vendors: Suppliers with direct access to core systems and sensitive data.
- High-Risk Vendors: Third parties that provide IT infrastructure, cloud hosting, or security services.
- Low-Risk Vendors: Non-technical service providers with minimal cybersecurity impact.
✔️ Risk Assessment & Due Diligence
- Conduct pre-contractual cybersecurity assessments before onboarding new vendors.
- Require suppliers to undergo penetration testing and security audits.
- Assess vendors based on NIS2 compliance checklists.
✔️ Contractual Cybersecurity Requirements
- Include mandatory security controls in vendor agreements.
- Define data protection and incident reporting obligations.
- Specify penalties for non-compliance.
✔️ Continuous Monitoring & Auditing
- Implement continuous security monitoring tools for supply chain risk management.
- Schedule annual security audits of high-risk vendors.
- Require vendors to provide compliance reports and security certifications.
4. Ensuring Suppliers Meet NIS2 and ISO 27001 Standards
4.1 Aligning NIS2 with ISO 27001 for Supply Chain Security
ISO 27001 provides a well-established cybersecurity framework that aligns with NIS2’s risk management principles. Key areas of alignment include:
| NIS2 Requirement | ISO 27001 Control |
|---|---|
| Supply chain security risk assessments | A.15 – Supplier Relationships |
| Incident reporting & response | A.16 – Information Security Incident Management |
| Business continuity & disaster recovery | A.17 – Business Continuity |
| Access control & authentication | A.9 – Access Control |
Organisations can leverage ISO 27001 certification as proof of compliance with NIS2 supply chain security requirements.
4.2 Vendor Certification & Compliance Reviews
To ensure compliance, companies should require suppliers to:
- Obtain ISO 27001 or SOC 2 certification.
- Submit annual cybersecurity compliance reports.
- Implement third-party risk assessment tools.
- Participate in cybersecurity awareness training.
5. Best Practices for Enforcing Secure Vendor Relationships
✅ Develop a Centralised Vendor Risk Register
Maintain a real-time inventory of suppliers, classified by risk level and security requirements.
✅ Standardise Cybersecurity Contract Clauses
Ensure every vendor contract includes clear cybersecurity obligations, incident reporting timelines, and penalties for non-compliance.
✅ Automate Third-Party Risk Management (TPRM) Processes
Utilise TPRM platforms to monitor supplier risk scores, compliance gaps, and threat intelligence.
✅ Conduct Cybersecurity Drills & Tabletop Exercises
Simulate supply chain cyberattacks to test incident response readiness.
✅ Implement Secure Data Exchange Protocols
Enforce encrypted communications, secure API integrations, and zero-trust network access for vendors.
6. Conclusion: Securing the Supply Chain Under NIS2
The NIS2 Directive places significant cybersecurity obligations on supply chain management, making third-party risk management a top priority for compliance teams. By establishing structured risk assessment frameworks, enforcing supplier compliance with ISO 27001, and continuously monitoring vendor security practices, organisations can mitigate supply chain threats and achieve NIS2 compliance.