Sustainable Supply Chains - Being Aware of the Current Requirements.pdf

© Assent 2022 / assent.com
Sustainable Supply
Chains: Being Aware of
The Current
Requirements
SCOPE Summit UK, Twickenham Stadium,
London
Monday 24th October 2022

Steven Andrews Raj Takhar
Today’s Presenters
Regulatory & Sustainability Expert
Assent Inc.
Regulatory & Sustainability Expert
Assent Inc.

Agenda
1. Introduction to Assent
2. The Colliding Worlds of PC & ESG
3. ESG (Environmental, Social & corporate
Governance)
4. The Risks of ‘Greenwashing’
- Be aware of it; and
- What happens when things go wrong?
- How to avoid it
5. Conclusions & Takeaways

Introduction to Assent
1

Introduction to Assent
12 Years
A customer-driven
innovation, single platform,
est. 2010.
1000+
Employees
Europe, North America,
Africa, and APAC
$1B USD
valuation backed by
Warburg Pincus and Vista
Equity Partners
800+ Customers
GE, Honeywell, Polaris,
Bombardier, Cook, Juniper
Networks, Ledvance…
1M Suppliers
Continually expanding
company supplier network
100+ Data
Types
Exchanged on platform
1B+
Parts/contacts database
5-Vertical Focus
Automotive, Aerospace,
Electronics, Industrial, and
Medical Devices
A Global Presence
▸ Ottawa, Canada
▸ Columbus, US
▸ Penang, Malaysia
▸ Amsterdam,
Netherlands
▸ Eldoret, Kenya
B Corp Certified
This company meets the
highest standards of social
and environmental impact

1. Secure SaaS Platform
2. Elimination of Data Silos
3. The Sustainability Network
4. Managed Services
5. Regulatory Expertise
The Assent Supply Chain Sustainability Platform
Supply Chain Sustainability Management

Assent Breadth of Regulation Support
The Assent Platform Delivers Efficient Supply Chain Data Collection, Validation & Centralized Management
for an Extensive Scope of Regulatory Requirements & Data Types
Product Compliance
▸ REACH SVHC
▸ EU Waste Framework
(SCIP)
▸ REACH Authorisation
▸ REACH Restrictions
▸ TSCA Restrictions
▸ EU RoHS
▸ Persistent Organic
Pollutants (POP)
▸ China RoHS
▸ Toxics in Packaging
▸ Korea RoHS
▸ EU Medical Device
Regulation
▸ California Proposition 65
▸ Low Halogen
▸ EU Biocides
▸ DFARS Specialty Metals
▸ AD-DSL (IPC-1754)
▸ Food & Water Contact
Materials
▸ Montreal Protocol
▸ EU Ship Recycling
Regulation (IHM)
▸ Custom DSL
▸ Children’s Safe Products
Act
▸ Customer Product Safety
Improvement Act
▸ Full Material Disclosure
▸ Global Automotive
Substance List
▸ Recycled Content
Trade Compliance
▸ USMCA Country of Origin
▸ Country of Origin
▸ Trade Classification & Origin
▸ Supplier Qualification
▸ C-TPAT – U.S. Importers
Environmental, Social & Corporate Governance
▸ Anti-Bribery Anti-Corruption
▸ Code of Conduct
▸ General Data Protection Regulation (GDPR)
▸ Human Trafficking & Slavery
▸ Supplier Diversity
▸ Information Security
▸ Labour Standards Assurance System
▸ NIST 800-171
▸ Responsible Minerals – Conflict Minerals
▸ Responsible Minerals – Extended Minerals

James Calder
VP, Compliance &
Regulatory Programs
Sarah Carpenter
Director, Corporate
Responsibility
Travis Miller
General Counsel
Cally Edgren
Director, Sustainability
Magnus Piotrowski
Manager, Compliance
& Regulatory (Europe)
Jared Connors
ESG & Responsible
Sourcing
Our Regulatory Experience is Your Advantage
Steven Andrews
Subject Matter Expert,
Environmental
Stewardship & Policy
Devin O’Herron
Sr. ESG & Responsible
Sourcing Analyst
Abiola Okpechi
Subject Matter Expert,
Business & Human Rights
Dr. Bruce Jarnot
Sr. Manager,
Product Compliance
Sue Fortunato-
Esbach
Sr. Subject Matter Expert,
Product Compliance
Noah Taetle
Jr. ESG & Responsible
Sourcing Coordinator
Daniel Zamora
Subject Matter Expert, ESG
& Responsible Sourcing
Valerie Kuntz
Manager,
Product Compliance
Marcus Schneider
Product Compliance
Jamie Wallisch
ESG & Responsible
Sourcing Analyst
Neil Smith
Manager, Compliance
& Regulatory Programs
Dr. Raj Takhar
Materials Management
& Chemical Reporting

Assent Customers
Aerospace &
Defence
Automotive
Medical
Devices
Electronics Cross-Industry

The Colliding Worlds of PC
and ESG
2

The Colliding Worlds of PC and ESG (i)
Product Compliance (PC)

The Colliding Worlds of PC and ESG (ii)
Examining both product safety and environmental
credentials

The Colliding Worlds of PC and ESG (iii)
● 1970s: TSCA the
grandfather of
modern chemical
regulations.
● 1980s: California
Prop 65 - liabilities
for not having
appropriate
labelling;
● 2016: Frank R.
Lautenberg
Chemical Safety for
the 21st Century
Act leading to
TSCA section 6(H)
● Reactive in nature
● 1980s:
Awareness of
continued
globalisation of
industry resulting
in increased
emissions, climate
change,
environmental
damage and
scarcity of natural
resources.
● 2000’s+: Global
accords POPS,
ODS, FGAS, etc
● 2000s: EU RoHS, EU
REACH, EU CLP, EU
ELV, etc
● 2010’s: EU BPR, EU
WEEE, etc.
● 2020’s: Increased
coordination between
regulations,
● Greater
enforcement.
● No Data No Access
To Markets.
● Phase out hazardous
chemicals in
consumer products.
● 2000s: Aligned to
EU approaches.
● 2020’s:
Developing UK
Chemicals
Strategies.
● Risk vs Hazard
(EU)
● 2010’s: Emerging
awareness and
control measures
● Increasing awareness of societal impacts
from using hazardous chemicals has taken
shape from EU approaches which are
considered as the gold standard.

The Colliding Worlds of PC and ESG (iv)
Key PC Emerging EU Directives, Acts and Regulations
Revision of EU REACH reg proposal
(Q4)
2022 2023 2024
Revision of EU CLP Delegated Act
(Q4)
Revision of EU RoHS proposal (Q2)
EU CLP Delegated Act Entry into Force
(Q2)
Chemicals - Simplification and
Digitalisation of labelling requirement
reg proposal (Q4)
PFAS restriction under EU REACH
proposal (Q1) - JAN 2023
Beyond
Chemicals - making use of EU
agencies reg proposal (Q4)
Integrated water management list of
pollutants reg proposal (Q4)
LEAD RoHS exemptions (Q4)
D4/D5/D6: Authorisation Proposal
under EU REACH (Q4)
Bisphenol A and bisphenols:
Restriction Proposal under EU
REACH (Q4)
Fluorinated greenhouse gases –
review (2015-20) Reg Proposal (TBD)
D4/D5/D6: Restriction Proposal under
EU REACH (Q4,2022- Q1,2023)
Publication of UK Chemicals Strategy
2030 (Q1-Q2))
European
Parliamentary
Elections
(Mid-2024)

The Colliding Worlds of PC and ESG (v)
Key PC Takeaways
▸ Number of regulations appearing globally is increasing, no longer just an
EU centric mindset!.
▸ Organization's need to clearly identify the use of ALL chemicals consumed
within products and in the process of manufacturing products to identify
associated risks and and reporting obligations (both in chemical regulations
and associated product approval regulations).
▸ The number of chemical substances that need to be identified is increasing
at an exponential rate!.
▸ Not understanding what these chemicals are can mean:
▹ Products are no longer allowed to be placed onto a given
marketplace.
▹ Supply chain disruptions from no-longer being able to source key
components / materials.
▸ There is a huge amount of pressure to reduce the amounts of dangerous
chemicals in products in use today to support greater recycling and
circularity initiatives in the future (reducing climate change is now a must!)

The Colliding Worlds of PC and ESG (vi)
Environmental, Social and corporate Governance (ESG)
PC → Sustainability → Product Stewardship → Corporate Social Responsibility → ESG
Growing awareness of societal risks pushing industry to act in a more responsible manner.

The Colliding Worlds of PC and ESG (vii)

The Colliding Worlds of PC and ESG (viii)
● 2000s: Numerous
indices (GRI)
developed with
ESG ratings first
developed within
financial sector.
● Key issues remain
over ‘cherry
picking’ on certain
topics leading to
concerns over
‘green washing’.
● 2020’s: Several
US EO’s for ESG
reporting in
federal contexts.
● 2000’s: Global
concerns led to
initiatives and
standards such as
the UN
Sustainable
Development
Goals, Complex
mixture of
mandatory and
optional targets.
● OECD due
diligence
framework,
UNGC, ILO.
● 2000s: Actively
participating in in
global initiatives.
● 2010’s: Lots of
investment and
reporting
obligations in
public procurement
context.
● 2020’s:
Recognition of ESG
impact, key
regulations aimed
at showing due
diligence +
evidential proof
● 2000s: Aligned to
EU approaches.
● 2020’s:
Redefining ESG
reporting
strategies post-
Brexit.
● 2020’s: Evolving
environmental
disclosure laws..
● Financial sector ESG reporting seen as the
key trigger.
● However this requires greater data
transparency and trust in the data reported
to show actual changes taking place
towards ESG goals.
● Enhanced proof of due diligence
activities.

The Colliding Worlds of PC and ESG (ix)
Key ESG Emerging EU Directives, Acts and Regulations
2022 2023 2024
GreenData4All – updated rules on
geospatial environmental data and
access to environmental information reg
proposal (Q4)
Fitness check of how the Polluter Pays
Principle is applied to the environment
consultation (Q1)
Beyond
Effectively banning products produced,
extracted or harvested with forced labour
reg proposal (Q4)
Environmental impact of waste
management – revision of EU waste
framework Dir proposal (Q1)
Environmental performance of products
& businesses – substantiating claims reg
proposal (Q4)
Revision of EU Batteries Directive Reg
proposal (Q4)
Reducing packaging waste – review of
rules Dir proposal (Q4)
Reducing packaging waste – review of
rules Dir proposal (Q4)
Sustainable consumption of goods –
promoting repair and reuse Dir proposal
(Q4)
EU Ecodesign
Sustainable Products
Regulation proposal
(EU ESPR) Reg
proposal (TBD)
EU Corporate Sustainability Reporting
Directive (CSRD) Dir proposal (TBD)
EU Corporate Sustainability Due
Diligence Directive (CS3D) Dir proposal
(TBD)
EU Anti-
Greenwashing -
Substantiating
Green Claims Reg
proposal (TBD)
Consumer policy – strengthening the role
of consumers in the green transition Dir
Proposal (TBD)
European
Parliamentary
Elections
(Mid-2024)

The Colliding Worlds of PC and ESG (x)
● Scope: Any physical, durable good that is placed on the market or put into service,
including components and intermediate products - medical devices are not excluded!
● Products will need to be Sustainable by design (SSbd):
■ product durability and reliability
■ product reusability
■ product upgradability, reparability, maintenance and refurbishment
■ presence of substances of concern in products
■ product energy and resource efficiency
■ recycled content in products
■ product carbon footprint
■ product environmental footprint
■ products’ expected generation of waste materials
● Digital Product Passport will be required for all products placed on the EU market
The Sustainable Products Initiative (SPI) and ESPR

How are you thinking about ESG:
Risk avoidance/compliance or value
creation/competitive advantage?
What is your primary motivation
when thinking about improving your
sustainability positioning?
Which stakeholders are causing the
most pressure?
INVESTOR
PRESSURE
MARKET
EXPECTATIONS
BUYER
REQUIREMENTS
Investors
representing $100
trillion in assets
incorporating ESG
into company
performance.
Thousands of
companies already
doing sustainability
reporting. Ten percent
of global public
companies have an
ESG score from an
independent evaluator.
>$70 billion in
global spend at
stake with buyer
prerequisites.
The Colliding Worlds of PC and ESG (xi)
Investors and customers are driving sustainability initiatives, but there is a
fine balance to maintain between being truly sustainable and greenwashing

The Colliding Worlds of PC and ESG (xii)
Key ESG Takeaways
▸ Societal pressures to meet climate change targets and maintain
sustainable growth have been known for decades.
▸ Early initiatives saw the emergence of indices and rating systems, which
often resulted in ‘false / positive’ reporting, leading to well known issues
with ‘greenwashing’
▸ The EU has recently launched several initiatives to address this via:
▹ Financial sector investments (EU SFDR, EU CMU) greater bias to financing
sustainable activities
▹ Corporate financial reporting (EU CSRD) enhanced financial reporting
▹ Corporate social governance (EU CS3D, EU mHREDD, EU FL Ban) expected due
diligence activities
▹ Sustainability (EU GD, EU CSS, EU SPI) transitioning to circular economy
▸ Vast amounts of data will need to be collected, analysed and reported to
show evidential proof of organisations acting in a really sustainable way.
▸ Similar themes are emerging globally!
▸ Lots of complex activities that organisations need to be aware of!

3 ESG - Environmental, Social &
corporate Governance

ESG is more than just Greenhouse Gas Emissions
Environmental
● Climate, GHG Emissions, Energy, Land
Usage & Forests
● Pollution, Waste, Hazardous Substances
● Environmental Compliance Risks
● Water
● Materials, resource efficiency
● Biodiversity & Ecosystem Services
● Supplier Environmental Assessment
Social
● Human Rights
● Employment Conditions, Policies &
Practices
● Social Impact & Value Creation
● Products & Services Responsibility
Governance
● Accountability, Anti-Corruption, Anti-
Competitive Behavior
● Structure & Leadership
● Ethics & Integrity
● Stakeholder Engagement
● Remuneration
● Effectiveness

G
E
ESG Overview
A broad scope of issues reported alongside company financials
Impact on the ecosystem
Pollution
Carbon Emissions & Climate
change
Resource Utilization & impact
analysis
Impact on people
Employees
Customers
Suppliers
Community
Human Rights
Impact of behavior & approach
Executive compensation
Management Structure
Board accountability
Shareholder treatment
Code of Conduct & Supplier
Expectations
S

Vital Supply Chain ESG Topics for Complex Manufacturers
Environmental Social Governance
Climate Impact
▸ GHG Emissions Reporting
▸ Reduction Targets
▸ Renewable Energy
Resource Use
▸ Water & Wastewater Management
▸ Waste & Hazardous Materials
Biodiversity
▸ Cotton
▸ Natural Rubber
▸ Forestry
Product Stewardship
▸ Safe Material Handling
Human Trafficking & Slavery
Labour Rights
▸ Health & Safety
▸ Workplace Wellbeing
Human Rights
▸ Security Forces
▸ Land Use, Access and Acquisition
Diversity & Inclusion
▸ Ownership
▸ Workforce Demographics
Organisational Commitment
▸ Business Ethics & Integrity
▸ Bribery & Corruption
▸ Business Conduct
▸ Antitrust
▸ Whistleblower
Resiliency
▸ Business Continuity & Planning
Data Protection & Privacy
▸ Data Protection
▸ Privacy

Why Change?
The Pressure
for ESG is
Mounting
Regulation ramp up
▸ Due diligence regulations (EU and U.S.) are ramping up ESG
reporting requirements, affecting international businesses serving
these markets
Investor demands
▸ Leading investment firms, like BlackRock, are treating ESG
performance as an equal partner to financial data
▸ Trillions in investment dollars are now locked behind ESG scoring
requirements
Customer expectations
▸ >$70 billion in global spend at stake with buyer prerequisites.
▸ The buying public and manufacturers are prioritizing products with
defensible ESG data and reporting.

German Supply Chain Due Diligence Act
▸ Do we have significant operations in Germany?
▸ Have we established a supply chain due
diligence system?
▸ Are we mapping supply chain human rights and
environmental risk?
▸ Do we engage with our supply chain on human
rights and environmental risk?
▸ Do we track the information the German Agency
Bafa is providing to provide legal clarity on the
understanding of “supply chain due diligence”?
Questions Companies Need To Ask
Companies with significant operations in Germany
should be working to implement systems to comply
with the requirements of this law.
There is still great uncertainty on how to comply -
the LkSG remains a moving target.
The German agency responsible for enforcing the
law (BAFA) is proving step by step guidance
information
- Understand the obligations - these come into
force in January 2023
- Stay on top of the ‘dripping out’ of information
- Establish a risk management system
- Establish supply chain due diligence procedures
What companies need to do

Uyghur Forced Labor Prevention Act (UFLPA)
▸ Do we sale goods in the US?
▸ Do we rely on materials/components containing
silica & gold?
▸ How confident are we that our suppliers do not
manufacture parts in Xinjiang?
▸ What about our suppliers’ suppliers?
▸ Are we regularly monitoring our suppliers for
links to the UFLPA entity list?
▸ How will we know if our suppliers have links to
Xinjiang?
Products are piling up after being stopped at the US
border.
Businesses are losing access to the US market
because of supply chain links to Xinjiang.
▸ Configure their supply chains so they have no
connection to Xinjiang or a listed entity.

Ecodesign
▸ Does our design process incorporate
environmental criteria for the manufacturing
process as well as use and disposal of the
product?
▸ How do we determine whether hazardous
substances are present in our factories and
products?
▸ How do we determine GHG and water efficiency
for our products?
Ecodesign is both a design philosophy for environmentally-friendly
products AND the name of the EU Regulation (Ecodesign Directive
2009/125/EC).
The Directive is part of the CE-marking regime and is (currently)
focused mainly on the energy efficiency requirements for 31 types
of products.
Understand what they’re trying to achieve with their products to
differentiate between design ideals & regulatory compliance:
▸ A more environmentally-friendly product (either in design or
manufacturing resources or both) OR
▸ Meeting a regulatory requirement for market access.
Sustainable products are part of a good ESG program.
▸ They reduce the use of hazardous materials which are
harmful to the environment and humans, including creating
safer conditions for workers
▸ They use less energy during sourcing, manufacturing & use
▸ They are repairable and last longer, reducing waste

Resilience
MSCI
ISS ESG
Sustainalytics
Waste
SASB
UN SDG
UFLPA
EU Supply
Chain Due
Diligence
EU Forced
Labor Ban
DEI
Climate
Impact
Life Cycle Analysis
ABAC Privacy
Ecodesign
Product Stewardship
Health & Safety
Ethics
Bribery &
Corruption
Business Continuity
Antitrust
Lieferkettensorgfaltspflichtengesetz
TCFD
OECD
CDSB/CDP
Data
Protection
GRI
Privacy
Wastewater
Carbon
Footprint
Design for
Sustainability
Growth
Investors
Customer
Expectations
Regulations
Resourcing
Automation
ESG Entry Points

ESG Programs and Their Supply Chain Impact
Beyond the Four Walls: ESG Impact for Supply Chain Can Exceed Operational Impact
UN Principles for Responsible Investment. (2017). Managing ESG Risk in The Supply Chains of Private Companies and Assets.
https://www.unpri.org/download?ac=1894.
Environmental Impact
within the Supply
Chain by Industry
93%
7%
36-56%
44-64%
28-30%
70-72%
10-14%
86-90%
4-5%
95-96%
2%
98%

Why now?
ESG due diligence has shifted from a good business practice to an industry expectation,
yet it can feel overwhelming.
Accelerating ESG due
diligence regulations
The rise of ESG regulations, like the SCDDA
and UFLPA, are just the beginning….
Increased scrutiny on ESG
claims
Businesses are now being held to a higher
standard of accountability.
Supply Chain ESG is now a business imperative

4 The Risks of ‘Greenwashing’

Greenwashing
▸ “Greenwashing” occurs when companies convey a false impression or provide false
information about the environmental impact of their products, services, or processes,
including:
▹ False or irrelevant claims
▹ Misleading imagery
▹ Ambiguous labelling
▸ It is not always deliberate and it’s not new!
▸ Jay Westerveld (a U.S. Environmental Activist) is credited with coining the term when
examining the business practices of the hotel industry in 1986!
The Terminology

Greenwashing
Some Examples
Our packaging
is widely
recyclable
Misleading
Imagery
(Picture - Mark Kerrison/In Pictures via Getty Images)
Our Products Are
Eco-Friendly!
Now better
for you,
better for
the planet
Our product
is now toxic-
free
Made from
sustainable sources
“Invented”
Labels

It’s Growing & New Stories Appear Everyday!
(Picture - Surfers Against Sewage/PA)
▸ Canadian company to pay $3 million penalty to
settle Competition Bureau’s concerns over coffee
pod recycling claims (January 2022)
▸ “Greenwashing hogwash”: A Singapore Bank's
“eco-warrior” marketing brag draws flak in social
media (July 2022)
▸ Revealed: Global oil company’s “greenwashing”
social media ads as anger over fuel costs rose
(August 2022)
▸ Firms blamed for branded packaging pollution
accused of “blatant greenwashing” by UK NGO
(August 2022)
Media Reporting on Suspected Greenwashing

Greenwashing
▸ Unavailability of a common standard: There is no single, reliable method on the market to
quantify environmental and climate impacts of products and make the results for different
products comparable.
▸ Regulatory failure: A single, reliable method for quantifying environmental and climate impacts
of products that can influence buyer decision-making has not been defined by lawmakers.
▸ Insufficient data: No access to simplified, immediate, and trustworthy information on
environmental performance of products. This lack of a consistent global reporting framework
leads to disparate company disclosures as well as data points that are less reliable.
▸ Lack of understanding/naïvety: Not taking account of the bigger picture.
▸ Stakeholder pressure: Saying what they think consumers and others want to see.
Main Drivers

Companies Are Under Pressure From Stakeholders
A Company’s Ownership Cares About Sustainability & ESG
The pressure on organizations to meet environmental,
social, and governance (ESG) criteria is more
widespread than most leaders might realize —
85% of investors considered ESG
factors in their investments in 2020.
— Gartner: "The ESG Imperative: 7 Factors for Finance Leaders to Consider"
Source: Venkataramani, S. (2021, June 9). The ESG Imperative: 7 Factors for Finance Leaders to Consider. Gartner.
https://www.gartner.com/smarterwithgartner/the-esg-imperative-7-factors-for-finance-leaders-to-consider/

Risks of Greenwashing
Even When Claims Are Made in Good Faith
▸ Limits the uptake of truly green products
▸ Brand and reputational damage
▸ Loss of investment
▸ Removal of products from the market
▸ Removal of advertisements from public media
▸ Increased scrutiny from regulators, insurance agencies,
and industry watchdogs
▸ Lawsuits
▸ Loss of faith in future communications

New Initiatives to Combat Greenwashing in Europe
These Are Growing!
Many global jurisdictions are now looking into drafting legislation, but
already we have:
▸ The UK Government’s Consumer Protection Laws and the Green
Claims Code — September 2021
▸ The April 2022 amendment to the French Government’s
Consumer Code
▸ European Commission proposed amendments to Directive
2005/29/EC in March 2022 on unfair business-to-consumer
commercial practices and empowering consumers for the green
transition

New Initiatives to Combat Greenwashing in Europe (Cont.)
These Are Growing!
▸ European Commission proposed a Corporate Sustainability Reporting Directive
(CSRD) in 2021
▹ Introduces requirement to report according to mandatory EU sustainability reporting
standards on the social and environmental impacts of their activities
▹ Will amend the existing reporting requirements of the NFRD (Non-Financial Reporting
Directive) 2014/95/EU
▹ Extends the scope to all large companies and all companies listed on regulated markets
▹ Reporting requirements will become more detailed and will need to comply with
mandatory EU sustainability reporting standards
▹ Requires the audit of reported information

Initiatives to Combat Greenwashing in North America
What Is in Place or on the Horizon?
▸ The U.S. Federal Trade Commission’s Green Guides were first issued in the 1990s
and were updated in 2012
▸ The U.S. Environmental Protection Agency (EPA)’s Frequent Questions about
Sustainable Marketplace and Green Products — what are greener products and
services and why buy them?
▸ The Canadian Government’s Competition, Consumer Packaging & Labelling and
Textile Labelling Acts — these laws enable the Competition Bureau to take action
against companies making false, misleading, or unsubstantiated environmental
claims

Risks for Companies
▸ In 2020, more than 60 percent of greenwashing-related securities class action
settlements in the U.S. exceeded $5 million, with 8 percent exceeding $100
million
▸ The French Government’s Consumer Code — penal sentences, large fines of up to
€300,000, plus additional fines related to the advertising
▸ “Usual” penalty provisions laid down in EU directives and regulations — “The
penalties provided for by individual member states must be effective,
proportionate, and dissuasive” — can range from fines, withdrawal of product from
market, and penal sentences
▸ In the UK, the Competition and Markets Authority can instigate court proceedings
and the Advertising Standards Authority can take action, including insisting on
compensation payments to misled consumers
Potential Penalties

Everyone Plays a Part
▸ Support and invest in supply
chain sustainability processes
and tools
▸ Work closely with supply
chain
▸ Champion transparency
across the organization
▸ Advise on which KPIs matter
most to investors
▸ Investigate the supply chain via
surveys and media monitoring
to capture data
▸ Due diligence to ensure
suppliers are free from ESG
risks
▸ Advise marketers on which
claims can be substantiated
▸ Create ESG and product
composition disclosures
▸ Develop data-driven
messaging that resonates
with the audience
▸ Adhere to green marketing
best practices
▸ Find third-party validated
certifications that can help
sell the product
Source: Assent Greenwashing Guide

The Majority of a Manufacturer’s Environmental Footprint Is
Located Within Its Supply Chain
Source: The UN Principles of Responsible Investment

Building a Supply Chain Sustainability Program
▸ Supply chain sustainability starts with product compliance data
▹ Use technology to your advantage
▸ Different program levels:
▹ A basic program ensures that your products meet the minimum
requirements for market access
▹ A more mature program incorporates deeper due diligence practices
and ESG reporting
▸ The more mature your supply chain sustainability program, the
more it protects you from the risk of making unsubstantiated
greenwashing claims
Engaging Directly With Suppliers Is Key

Building a Supply Chain Sustainability Program (Cont.)
▸ Product compliance data gives you deeper insights into what goes into your product
and where you get your materials, so you can start making sustainable marketing
statements with confidence
▸ The more robust data you collect about your product compliance, the more your
sustainability program can mature
▸ Establishing and developing a supply chain sustainability program now will help you
prepare for the legal requirements that are coming
Preparing for the Future

The Assent Supply Chain Sustainability Maturity Model for
Complex Manufacturing
A System That Matures Step by Step
Source: Assent Greenwashing Guide

Building a Supply Chain Sustainability Program
How Could This Be Established?
1. An educated and well-supported supply chain is a
compliant supply chain
2. Start with a gap assessment and build from there
3. Use industry standard surveys to collect data from
your suppliers
4. Ensure you have access to the right expertise
5. Know the suitability, benefits, and limits of ecolabels

Ecolabels
In the US & Europe
▸ The US EPA has developed its own ecolabels covering energy
and water efficiency, products with safer chemical ingredients,
refrigerant and vehicles emissions, and recycled materials.
▸ The EPA maintains a list of recommended standards and
ecolabels in different product & service categories
▸ The EU Ecolabel was established in 1992 by the European
Commission. It certifies products with a guaranteed,
independently-verified low environmental impact
▸ It covers a wide range of product groups, from electronics and
clothing to furniture and cleaning products
▸ Nordic Swan Ecolabel — Nordic countries; Milieukeur —
Netherlands; Blue Angel — Germany; & many more

Ecolabels
Points to Keep in Mind
▸ Are government-developed ecolabels seen as more reliable and credible than their privately
owned and managed counterparts?
▸ Benefits
▹ Industry can offer third-party-verified alternatives to conventional products that have a
smaller environmental impact, thereby enabling buyers to make informed choices &
contributing to sustainable development
▹ Educating & influencing consumer behaviour toward more environmentally responsible
products
▹ Reallocation of the cost of responsible use of natural resources
▹ Can help to expose ‘greenwashing’
▸ Limits
▹ They still do not create a level playing field
▹ Government mandated standards through legal instruments such as the ESPR will be the only
way to achieve this

Conclusions & Takeaways
▸ Keep abreast of all product regulatory developments and link these to ESG aims &
objectives
▸ Engage your supply chain with your sustainability aims & goals
▸ The pressure for ESG reporting is growing from both customers & investors and
regulation is following closely behind
▸ ‘Greenwashing’ is all pervasive — companies need to ensure that they can fully justify
any claims they make
▸ Help is available — consult & follow guidance

Thank you!

Sustainable Supply Chains - Being Aware of the Current Requirements.pdf

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Sustainable Supply Chains - Being Aware of the Current Requirements.pdf