Update LkSG und CSDDD - die wichtigsten Änderungen
10.10.2024

Update zu LkSG und CSDDD: Die wichtigsten Änderungen

Die neue EU-Lieferkettenrichtlinie CSDDD stellt im Vergleich zum deutschen Lieferkettengesetz LkSG neue Anforderungen an Unternehmen. Um die europäische Regelung mit den nationalen Vorschriften in Einklang zu bringen, sind Anpassungen unvermeidlich. In diesem Beitrag zeigen wir Ihnen, worauf Sie vorbereitet sein sollten, und geben Ihnen Handlungsempfehlungen.

Einführung in die CSDDD

Die Corporate Sustainability Due Diligence Directive (CSDDD) ist am 25. Juli 2024 in Kraft getreten. Ziel der EU-Lieferkettenrichtlinie ist es, menschenrechtliche und umweltbezogene Sorgfaltspflichten in Unternehmen EU-weit zu vereinheitlichen. Unternehmen in der EU müssen entlang ihrer gesamten Lieferkette potenzielle Risiken identifizieren und gezielte Maßnahmen ergreifen, um diese zu minimieren – insbesondere bei Hochrisiko-Lieferanten. Im Vergleich zum deutschen Lieferkettensorgfaltspflichtengesetz (LkSG) geht die CSDDD noch weiter und umfasst zusätzliche soziale und ökologische Aspekte, die bisher nicht im Fokus standen.

Inhalt dieses Blogbeitrags:

  • Vergleich zwischen CSDDD und LkSG
  • Geplante Anpassungen des LkSG in Deutschland
  • Handlungsempfehlungen für Unternehmen

Vergleich zwischen LkSG und CSDDD

Obwohl das deutsche LkSG und die europäische CSDDD ähnliche Ziele verfolgen, gibt es wichtige Unterschiede in ihren Anforderungen.

Zunächst betrifft das die Reichweite der Due-Diligence-Verpflichtungen. Beide Regularien verwenden einen risikobasierten Ansatz. Während das LkSG aber vor allem auf direkte Lieferanten fokussiert ist, fordert die CSDDD eine Betrachtung der gesamten Lieferkette. Bei Hochrisiko-Lieferanten bedarf es einer vertieften Analyse.

Außerdem deckt die CSDDD einen breiteren Bereich an Themen ab. Die europäische Richtlinie umfasst neben den 13 aus dem LkSG bekannten Risikokategorien zusätzliche soziale und ökologische Themen.

Unterschiede gibt es auch beim Geltungsbereich:

LkSG

  • Seit 2024: Unternehmen mit mehr als 1000 Beschäftigten

CSDDD

  • EU-Unternehmen
    • Ab 2027: mit mehr als 5000 Beschäftigten und einem Jahresumsatz von über 1500 Millionen Euro
    • Ab 2028: mit mehr als 3000 Beschäftigten und einem Jahresumsatz von über 900 Millionen Euro
    • Ab 2029: mit mehr als 1000 Beschäftigten und einem Jahresumsatz von über 450 Millionen Euro
  • Nicht-EU-Unternehmen:
    • mit einem Nettoumsatz von über 450 Millionen Euro in der EU generiert
Geltungsbereich LkSG und CSDDD

Schließlich sieht die CSDDD auch zivilrechtliche Haftungen vor, die im LkSG nicht enthalten sind. Betroffenen Unternehmen drohen also rechtlichen Konsequenzen, wenn sie ihren Sorgfaltspflichten nicht nachkommen. 

Die CSDDD und die Anpassung des LkSG

Da die Anforderungen der CSDDD über die des LkSG hinausgehen, ist eine Anpassung des deutschen Gesetzes unvermeidlich. Die Bundesregierung hat in ihrer Wachstumsinitiative angekündigt, das Lieferkettengesetz möglichst bürokratiearm an die neuen europäischen Regelungen anzupassen. Wie genau diese Anpassungen aussehen werden, ist allerdings noch offen.

Ein zentrales Thema ist der Geltungsbereich, da in Deutschland aktuell mehr Unternehmen vom LkSG betroffen sind als in der CSDDD vorgesehen. Es wurde diskutiert, ob die deutsche Regierung den Anwendungsbereich des LkSG ändern kann. Jedoch hindert der Wortlaut der CSDDD die EU-Mitgliedstaaten ausdrücklich daran, den Geltungsbereich bestehender nationaler Gesetze zu verringern. Wie die Bundesregierung mit diesem Konflikt umgehen wird, bleibt abzuwarten.

Die Bundesregierung plant zudem ein Sofortprogramm für untergesetzliche Maßnahmen, das Unternehmen entlasten und ihnen bei der praktischen Umsetzung des LkSG helfen soll. Dieses Programm, das im September 2024 eingeführt wurde, enthält Maßnahmen, die kurzfristig durch das Bundesamt für Wirtschaft und Ausfuhrkontrolle (BAFA) operationalisiert werden können, um eine praxisnahe Anwendung der Vorgaben zu ermöglichen.

Eine weitere Anpassung, die bereits konkret geplant ist, betrifft die Berichtspflichten. Um doppelte Berichtspflichten zu vermeiden, sollen Unternehmen, die sowohl unter die Corporate Sustainability Reporting Directive (CSRD) als auch unter das LkSG fallen, ein Wahlrecht erhalten. Sie können entweder den CSRD-konformen Nachhaltigkeitsbericht oder den BAFA-Fragebogen für das LkSG nutzen. Allerdings gibt es Unterschiede zwischen den beiden Berichtsanforderungen: Der CSRD-Bericht deckt nicht alle Details ab, die im BAFA-Fragebogen verlangt werden. Unternehmen, die sich für den CSRD-Bericht entscheiden, sollten daher auf mögliche Nachfragen des BAFA vorbereitet sein und eine umfassende Dokumentation ihrer Sorgfaltspflichten intern sicherstellen.

Umsetzung des LkSG: Empfehlungen für Unternehmen

Was bedeuten die Anpassungen des deutschen LkSG für Sie und Ihr Unternehmen. Wir haben Handlungsempfehlungen zusammengestellt:

1. Informiert bleiben

Die regulatorischen Anforderungen entwickeln sich stetig weiter. Es ist wichtig, dass Sie über Neuerungen im Rahmen des LkSG und der CSDDD informiert bleiben, um rechtzeitig auf Änderungen reagieren zu können. Dazu bietet sich unser VERSO-Blog an und folgen Sie uns auf LinkedIn.

2. Bestehende Prozesse fortsetzen

Auch wenn einige Anpassungen des LkSG noch in der Diskussion sind, sollten Sie Ihre bisherigen Maßnahmen zur Einhaltung der Sorgfaltspflichten in der Lieferkette fortsetzen. So stellen Sie sicher, dass Sie auf zukünftige Anforderungen vorbereitet sind.

3. Sorgfaltspflichten etablieren

Unabhängig von gesetzlichen Vorgaben lohnt es sich, wirksame Sorgfaltspflichten zu etablieren. Diese helfen Ihnen, resilientere Lieferketten aufzubauen, eng mit Geschäftspartnern zusammenzuarbeiten und langfristig die soziale Akzeptanz für Ihr Handeln zu sichern. Zudem stärken Sie Ihre Marke und tragen positiv zum Schutz von Menschen und der Umwelt bei.

4. CSRD beachten

Fällt Ihr Unternehmen unter die CSRD, müssen Sie – unabhängig von den Änderungen des LkSG – eine menschenrechtliche Sorgfaltsprüfung durchführen. Stellen Sie sicher, dass Ihre Berichterstattung diese Anforderungen erfüllt und Sie ausreichend Daten zur Verfügung haben, um transparent und umfassend zu berichten.

Unterstützung durch VERSO bei der Umsetzung von LkSG, CSDDD und CSRD

Die Umsetzung von LkSG und CSDDD stellt viele Unternehmen vor Herausforderungen. Der VERSO Supply Chain Hub bietet eine umfassende Lösung, um diese Anforderungen effizient zu bewältigen. Die Plattform ermöglicht eine automatisierte Risikoanalyse der gesamten Lieferantenbasis, unterstützt das Einholen von Self-Assessments und sorgt für die Transparenz entlang der gesamten Lieferkette. Unternehmen können damit sowohl den Vorgaben des LkSG als auch der CSDDD nachkommen. Mit dem ESG Hub bietet VERSO darüber hinaus die Möglichkeit, CSRD-konforme Nachhaltigkeitsberichte zu erstellen.

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EUDR umsetzen, Entwaldung verhindern
07.10.2024

EUDR: Was Unternehmen jetzt wissen müssen

Die EU-Verordnung für entwaldungsfreie Lieferketten (EUDR) stellt Unternehmen vor neue Herausforderungen im Bereich der Lieferketten-Compliance. Die EUDR zielt darauf ab, den Handel mit Produkten, die zur Entwaldung beitragen, streng zu regulieren. Doch was bedeutet das konkret für betroffene Unternehmen und wie können sie sich darauf vorbereiten?

Die EUDR kurz erklärt

Die EUDR (EU Deforestation Regulation) hat das Ziel, die Abholzung von Wäldern weltweit zu verringern. Mit der Verordnung ist die Ersteinführung, das Inverkehrbringen/Bereitstellen auf dem EU-Binnenmarkt sowie der Export bestimmter Waren verboten, für die seit Anfang 2021 Wälder gerodet oder Wald-Ökosysteme beschädigt wurden. Die umfangreichen Anforderungen der EUDR haben Klaus Wiesen (Head of Sustainable Supply Chains bei VERSO) und Louis Warnking (Rechtsanwalt bei Taylor Wessing und Experte für Lieferketten-Compliance) im Webinar „Fit für die EUDR: So meistern Sie die neuen Anforderungen” erläutert.

Folgende Rohstoffe sowie Erzeugnisse, die unter Verwendung dieser Rohstoffe hergestellt wurden, sind betroffen: Holz, Kaffee, Kakao, Kautschuk, Palmöl, Rind und Soja. Die EU-Verordnung soll ab 30.12.2024 für erste Unternehmen Anwendung finden. Aktuell hat die EU-Kommission eine Verschiebung der EUDR um ein Jahr vorgeschlagen. Mitgliedsstaaten und EU-Parlament müssen allerdings noch zustimmen.

Unternehmen müssen nachweisen, dass ihre Produkte nicht aus entwaldeten Gebieten stammen und die nationalen Rechtsvorschriften des Ursprungslandes einhalten. Ein zentraler Bestandteil der EUDR ist die Sorgfaltserklärung, die Informationen über die Lieferkette enthält und die Einhaltung der Vorschriften sicherstellt.

On-demand-Webinar zur EUDR

Im Webinar erhalten Sie alle Informationen rund um die EUDR und die rechtlichen Pflichten. Außerdem geben Ihnen erfahrene Lieferketten-Experten wichtige Tipps zur Vorbereitung und Umsetzung.

Wie Unternehmen die EUDR umsetzen

Mit der EUDR kommen umfassende Sorgfaltspflichten auf Unternehmen zu, um sicherzustellen, dass ihre Produkte entwaldungsfrei sind. Der Fokus liegt dabei auf der Transparenz und Nachverfolgbarkeit der Lieferketten. Unternehmen müssen in der Lage sein, den gesamten Weg eines Produkts lückenlos nachzuverfolgen. Eine besondere Herausforderung stellt dabei die Beschaffung von Geolokalisierungsdaten dar, die bis zum Erzeugergrundstück zurückverfolgt werden müssen.

„Das heißt, man muss sich im Zweifel bis an den Anfang der Lieferkette durchfragen, um festzustellen, von welchem Grundstück stammt mein Holz, das ich jetzt hier am Ende in meinem angefertigten Holzstuhl verwende”, erklärte Louis Warnking im Webinar „Fit für die EUDR: So meistern Sie die neuen Anforderungen”. Unternehmen müssen für jedes relevante Produkt Nachweise erbringen, dass es nicht auf Flächen erzeugt wurde, die nach dem 31.12.2020 abgeholzt wurden.

Die EUDR fordert von betroffenen Unternehmen umfangreiche Daten und Angaben. „Angesichts der doch enormen Komplexität, muss man sagen: Dieses Gesetz schreit nach einer Umsetzung per Software. Beim LkSG gilt das natürlich schon, aber bei der EUDR gilt das noch mehr, da eine Umsetzung ohne Software nahezu nicht möglich ist, wenn man es in irgendeiner Weise pragmatisch halten möchte”, sagte Klaus Wiesen im EUDR-Webinar.

EUDR: Wie können sich Unternehmen vorbereiten?

Unternehmen, die von der EUDR betroffen sind, sollten frühzeitig Maßnahmen ergreifen, um die Einhaltung der Verordnung sicherzustellen. Wichtig sind hier unter anderem Transparenz in der Lieferkette, die Identifizierung der betroffenen Rohstoffe und die Zusammenarbeit mit Lieferanten.  

Detaillierte Informationen und praxisnahe Tipps zur Umsetzung der EUDR erhalten Sie in unserem On-demand-Webinar „Fit für die EUDR: So meistern Sie die neuen Anforderungen”. Darin erhalten Sie alle Infos über die konkreten Anforderungen der EUDR und wie Sie diese in Ihrem Unternehmen erfolgreich umsetzen können.  

* Bei diesen Informationen handelt es sich um redaktionell zusammengefassten Content, der nicht als Rechtsberatung zu verstehen ist. VERSO übernimmt keine Haftung. 
** Die im Webinar genannten Daten zum Anwendungsstart sind derzeit noch in Diskussion und könnten sich verändern.

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Blog Fahrradbranche Lieferkette
09.09.2024

Compliance in the supply chain: How the bicycle industry is mastering the task

Sustainability regulatory obligations are increasing and compliance in the supply chain is becoming ever more important. Read our article to find out how companies fullfil the ESG requirements for the supply chain and how VERSO specifically supports the bicycle industry in this task.

The economy is undergoing a profound change. More and more companies are integrating sustainability into their business models. This topic is also becoming increasingly important in the bicycle industry – especially in relation to the supply chain, as this is where the greatest risks and the greatest impact of bicycle manufacturers lie.

Two factors play a key role. Firstly, many companies are launching sustainable initiatives to improve their environmental footprint. This enables them to generate business value and Competitive advantages.

On the other hand, regulatory pressure is growing – including throughtheCSRD reporting obligation, the CO2-border-adjustment mechanism CBAM and the EUDR regulation for deforestation-free supply chains. Compliance with sustainability requirements is becoming mandatory.

CSRD, EUDR and CBAM: New requirements for compliance in the supply chain

There are numerous new requirements in the area of sustainability that also affect the bicycle industry. The CSRD, the EU directive on sustainability reporting, plays a major role. Companies have to provide extensive ESG information – and not only consider their own company, but also the supply chain. We have summarised what exactly is required in our blog post „CSRD and the supply chain”. However, the industry is also confronted with new obligations arising from the use of certain raw materials. For example, companies are subject to the EUDR because rubber is used for bicycle tyres. By using CO2-intensive materials such as aluminium or steel, companies may also be affected by CBAM. Both regulations include an assessment of certain raw materials as well as a documentation and reporting obligation. Those who create transparency here and thus address the risks identified have created the basis for fulfilling almost all requirements and compliance in the supply chain.

Compliance in the supply chain: the challenge of a complex supply chain

Cycling is – apart from walking – the most environmentally friendly form of transport: emission-free, quiet, efficient and climate-friendly. However, this only applies to pedalling. When it comes to the production of bicycles, especially e-bikes, the balance is somewhat different.

In addition to emissions – including CO2-intensive materials – the use of high-risk materials also plays a role. “Raw materials for motors, electronics and batteries are associated with major sustainability risks,” explains Klaus Wiesen, Head of Sustainable Supply Chain at VERSO. In addition, the bicycle industry often has complex supply chains. This makes it all the more important to create transparency with regard to these issues and reduce risks.

The complexity of the supply chain results from the large number of players involved in the production of the numerous components of a bicycle or e-bike. These players are distributed internationally, which results in different framework conditions and long transport routes.

Compared to conventional bicycles, e-bikes bring additional challenges. New technologies and raw materials for the drive and battery have become relevant in production. Here, bicycle manufacturers are competing with industries such as the IT sector, with which they previously had little contact.

CSRD and supply chain: these disclosures are required

The CSRD obliges companies to provide extensive information on the supply chain. Find out what information is required and what opportunities and risks arise from the EU directive.

The growing importance of transparency and data management

“Transparency in the supply chain is the key to complying with current and future regulations,” emphasises Klaus Wiesen. Many VERSO customers have voluntarily established corresponding processes before they are obliged to do so by regulations such as the Supply Chain Act (LkSG).

Riese Müller is a pioneer in the bicycle industry and aims to be the most sustainable company in the e-bike sector by 2025. With the VERSO Supply Chain Hub the company creates the necessary transparency in the supply chain and promotes its suppliers in terms of sustainability. Riese Müller is also improving risk management and supply chain mapping to ensure compliance in the supply chain.

However, not all companies in the bicycle industry are that advanced. A key problem is the collection and management of data along the supply chain. Smaller manufacturers in particular have some catching up to do.

“Many companies have hardly collected any structured data, which now presents them with considerable challenges if they want to fulfil the requirements of CSRD, CBAM, EUDR and other regulations,” says Klaus Wiesen. This is where VERSO comes in and offers solutions to support companies in realigning their processes and fulfilling the requirements.

Compliance in the supply chain: benefiting from the network

VERSO is the bicycle industry’s leading platform for sustainability in the supply chain. Their customers include German companies such as Riese Müller as well as international manufacturers – for example from the Netherlands, Switzerland and the USA.

“As there is a large overlap in the supplier base in the bicycle industry, our customers benefit from the networks created and stored in our software,” explains Klaus Wiesen. All customers also benefit from learning effects from previous projects. VERSO integrates new regulations into its software at an early stage to ensure future compliance in the supply chain.

EUDR: Everything you need to know

The EU regulation for deforestation-free supply chains (EUDR) aims to prevent the ongoing deforestation of forests. In our article, we answer the most important questions about the EUDR.

Leveraging supply chain ompliance as a chance for the bicycle industry

The regulations are not only associated with additional tasks. They also open up new opportunities for companies.

One example is risk management. Companies in the bicycle industry have suffered particularly badly from supply bottlenecks in the past. Resilience in the supply chain has therefore become an important issue. By identifying risks (e.g. political instability, natural disasters or human rights violations), a company can take measures to minimize or avoid the impact of these risks. This ensures robust supply chains.

Bicycle manufacturers’ customers often attach great importance to sustainability. Those who fulfill the compliance requirements show that their company takes responsibility for ethical and environmentally friendly standards in the supply chain. This creates trust, provides a competitive advantage and contributes to the long-term success and good reputation of the brand.

Avoiding reputational damage and penalties also plays a role. Companies that do not fulfill their regulatory obligations must expect sanctions. We have summarised possible penalties in the blog post Sanctions at a glance: The cost of mistakes in reporting and implementing sustainability” for an easy overview.

Holistic sustainability management at VERSO

In order to fulfill the requirements, companies should prepare for the new regulations at an early stage. Thanks to our expertise in the bicycle industry (among others) VERSO is the ideal partner. “With the VERSO Supply Chain Hub we have been supporting our customers for years with transparency in the supply chain and the fulfillment of their due diligence obligations. Our software solution enables optimized preparation for current and future regulations,’ emphasizes Klaus Wiesen.

The supply chain harbors the greatest risks and has the greatest impact in the bicycle industry. However, a holistic view of a company is necessary, particularly with regard to CSRD. This includes the upstream and downstream value chain as well as the company’s own business activities. VERSO offers an all-in-one solution here.

With the VERSO ESG Hub you can collect all relevant data and create a meaningful sustainability report. With the Climate Hub the corporate carbon footprint is calculated and a climate strategy is mapped. The VERSO sustainability experts will support you throughout the entire process. Furthermore, you can gain additional know-how about sustainability in our VERSO Academy courses.

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Moosbewachsene Baumwurzeln als Symbolbild für die EUDR
13.08.2024

The most important questions and answers on EUDR

The EU regulation for deforestation-free supply chains (EUDR) aims to prevent the ongoing deforestation in order to protect biodiversity and reduce greenhouse gas emissions. In this article, we answer the most important questions about the EUDR.

What is the EUDR?

After the USA, Germany was the world’s largest importer of green coffee in 2019. In 2018, Germany was also one of the largest importers of raw cocoa and was the European leader in per capita cocoa consumption. Let’s broaden our view a little. The EU is the second largest importer of soy, much of which is used as animal feed.
And even if imports are falling in some areas (e.g. tropical timber), one thing is certain: together with other high-income countries such as the USA and China, Europe is one of the world’s largest importers of raw materials and goods that drive global deforestation.

In the last 30 years, we have lost an area of forest worldwide that is larger in total than the European Union. Forest degradation and deforestation are still progressing at a tremendous rate, which only exacerbates global warming and biodiversity loss.

However, the growth of prosperity and the economy cannot be endlessly expanded at the expense of the environment. As early as 2013, the EU therefore put an initial stop to deforestation with the EU Timber Regulation (EUTR ) (implemented in Germany by the Timber Trade Security Act (Holzhandels-Sicherungsgesetz – HolzSiG)). However, the standards and enforcement of the EUTR have been repeatedly criticized as weak.

As part of the Green Deal, the EU is now tightening its measures with the EUDR. The initial introduction, placing/provision on the EU internal market and export of certain goods for which forests have been cleared or forest ecosystems damaged since the beginning of 2021 will soon be prohibited. Regardless of whether this forest is located in Thuringia, Romania or Brazil.

Checklist for sustainable procurement

Is your procurement prepared for the many new ESG requirements? Review now using our checklist!

When does the EUDR come into force?

The EUDR is set to affect the first companies from 30.12.2024. The scope of application will then be gradually expanded in a similar way to the CSRD and CSDDD. From 30.12.2024: companies that meet at least two of the following criteria (large and medium-sized enterprises – referred to as “non-SMEs” in the EUDR)

  • > 50 employees
  • > 10 million € turnover
  • > 5 million € Balance sheet total

From 30.06.2025: Companies that meet at least two of the following criteria (small and micro enterprises – referred to as “SMEs” in the EUDR):

  • < 50 employees
  • < 10 million € turnover
  • < 5 million € Balance sheet total
Timeline of the EUDR deadlines

Who is affected by the EUDR?

The EUDR is product-based. Any company that trades in products or raw materials that fall within the scope of the EUDR is affected. A distinction is made between affected companies:

  • Market participants: companies that import/export relevant products into/out of the Union market for the first time
  • Traders: companies that make relevant products available on the Union market

CSRD and supply chain: these disclosures are required

The CSRD obliges companies to provide extensive information on the supply chain. Find out what information is required and what opportunities and risks arise from the EU directive.

Which products are covered by the EUDR?

The new deforestation regulation affects the following raw materials and products manufactured using these raw materials:

  • Wood
  • Palm oil
  • Coffee
  • Cocoa
  • Beef
  • Soy
  • Rubber

The regulation does not provide for any thresholds or volume values. Incidentally, the list of affected raw materials is to be expanded in the future.

Overview of the goods affected by the EUDR directive

What conditions must products fulfill under the EUDR?

Starting with the implementation phase: Import, trade and export of the above-mentioned raw materials and their derived products on the EU internal market are only permitted, if these three conditions are met:

  • Deforestation-free:The products were manufactured without converting natural forest into agricultural land or tree plantations after 31.12.2020. This also applies if deforestation was considered legal in the country of origin!
  • Production in accordance with the relevant rights of the country of origin: This concerns both environmental protection and human rights. Species protection measures, anti-corruption measures, labor rights, the UN Declaration on the Rights of Indigenous Peoples, trade law, etc. have been complied with.
  • Due diligence declaration available:A risk assessment has been carried out for the product, the due diligence obligations have been complied with and there is no or only a negligible risk of deforestation.

Are there any exceptions?

Yes, there are some exceptions to the EUDR:

  • 100% recycled goods, i.e. goods made from raw materials/consequential products whose life cycle is already complete anyway
  • Packaging materials used solely to support, protect or carry goods
  • Operating instructions
  • Bamboo products

Products that were produced before the EUDR came into force on 29.06.2023 are also exempt from the EUDR.
However, this does not apply to wood products, as these were previously covered by the EUTR.

What requirements does the EUDR place on my company?

Under the new Deforestation Regulation, companies that are the first to place a raw material or downstream product on the market (“operators”) must carry out a risk assessment, mitigate risks and submit a due diligence declaration via the EU “Traces” system. Traders who trade or process the raw materials or goods downstream on the EU market may then be able to refer to the reference numbers in the due diligence declaration. If the due diligence declaration is missing, the traders must of course provide it themselves. Large traders must also verify the risk assessment on a random basis. The EUDR also introduces a documentation and reporting obligation. As the Deforestation Directive also differentiates between “SMEs” and “non-SMEs” for traders and market participants, there is also a gradation here: implementation is simplified for SMEs (according to the EU Directive) through a narrower list of obligations. Among other things, they have to provide less information about their upstream and downstream supply chain and do not have to submit a public EUDR report. You should therefore check which categories your company falls into and which specific obligations you are subject to.

Risk management in the supply chain

Read our whitepaper to find out how to efficiently implement risk management along the supply chain through digitalization.

The requirements of the EUDR – step by step

1. Collect data

Get a precise overview of your goods and raw materials. This includes information such asprecise descriptions, quantities, suppliers and countries of origin. The EUDR also requires the geolocation of all properties on which the raw materials concerned were produced – including the time or period of production. Not only in the future, but also retroactively until 31.12.2020. This is to ensure that no deforestation has actually taken place on the land in question. You should also obtain proof that all rights are protected in the country of origin.

2. Carry out a risk assessment

The aim is to assess the deforestation risk of newly imported products and raw materials. Criteria for risk assessment include the country of origin, the deforestation dynamics in this country, the political/social situation or the complexity of the importing company’s supply chain. The EU provides a benchmarking system that categorizes producer countries according to risk classes. According to the EUDR, only products with no or negligible risk may be traded on the EU internal market.

3. Reduce risks

If you have identified risks in your supply chain, these must now be reduced as far as possible.
Develop a new code of conduct together with your suppliers as well as adaptable strategies and control measures.
Check compliance, e.g. through supplier audits or by requesting additional documentation.

4. Document and report

Furthermore, the EUDR also introduces an internal documentation obligation and a reporting obligation. A due diligence declaration or confirmation of EUDR compliance must be enclosed with each batch of affected goods, which customs will check on a risk basis. With the exception of “SMEs”, all companies are also obliged to publicly report on the risk assessment, due diligence process and measures taken. If your company falls under the EU Sustainability Reporting Directive (CSRD), you can handleEUDR reporting via the CSRD report.

Steps to implement the EUDR in your company

Does the EUDR provide for sanctions?

Yes. Planned sanctions include:

  • Skimming off profits unlawfully made as a result of non-compliance with the EUDR
  • Fines in proportion to forest damage and value of goods, but at least 4 % of annual turnover
  • Confiscation of goods or products
  • Temporary import bans
  • Exclusion from public funds and public tenders
  • Naming and shaming

Read more in our article “Sanctions for errors in ESG reporting and implementation”.

What is the best way to implement the EUDR?

With VERSO. Our Supply Chain Hub offers you a seamless end-to-end process for all EUDR requirements – from risk identification to the creation of your CSRD report in the ESG Hub. Find out more:

* This information is summarized editorial content and should not be construed as legal advice. VERSO accepts no liability.

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CSRD und Lieferkette - Was der Einkauf beachten muss
17.06.2024

CSRD and supply chain: What purchasing needs to consider

The CSRD with its ESRS standards is not only a lot of work, it also has a major impact on companies: This is because you have to make extensive ESG disclosures – and not only look at your own company, but also at the supply chain. Read here what purchasing departments need to consider and what opportunities and risks arise from the EU directive.

The CSRD (Corporate Sustainability Reporting Directive) has applied to the first companies since January 2024, and others are gradually being added.
Ultimately, around 50,000 companies in Europe will be obliged to publish a report with comprehensive information on ESG (environmental, social and governance) issues.
The ESRS, the European Sustainability Reporting Standards, were also introduced with the CSRD.
For the first time in the EU, they provide a standardized framework for the preparation of a sustainability report – in simple terms: which ESG information is required and in what form it must be reported.
It is important to note that the reporting obligation not only relates to the company itself, but also extends to the entire value chain. In this blog post, we look at the upstream value chain – i.e. the supply chain.
And this is where companies subject to CSRD reporting requirements can quickly run into problems: they need a lot of information from their suppliers and the data situation is often inadequate – according to the Bertelsmann Stiftung’s Sustainability Transformation Monitor 2024.
With VERSO, you can master this challenge.
Our Supply Chain Hub creates transparency in the supply chain and enables you to analyze risks, develop targeted measures and comply with reporting obligations.
We will now take a closer look at these disclosure requirements within the framework of the CSRD and the impact on purchasing.

Implement LkSG with legal certainty

Our webinars are also available on demand: In this episode, you will learn how companies can implement the Supply Chain Act in a legally compliant manner and pragmatically fulfill the BAFA requirements – with practical lessons for SMEs.

CSRD and supply chain: What needs to be reported?

The CSRD demands a lot from companies: the ESRS comprises around 1150 data points and over 100 of these relate to the supply chain.
Purchasing is therefore an important player in the reporting process.
The information involved can be roughly summarized as follows: The ESG report must contain information on environmental and social IROs (impacts, risks and opportunities) in the supply chain as well as measures related to the IROs.
If your company is affected by the LkSG, you will probably recognize some disclosure requirements and can realize synergies: This is because some BAFA requirements overlap with the ESRS.

Bei den ESRS gibt es sektorunabhängige Standards und sektorspezifische Standards. Die Sektorunabhängigen Standards teilen sich in die Bereiche Allgemeines, Umwelt, Soziales und Unternehmensführung. Die Allgemeinen Standards sind verpflcihtend für alle Unternehmen, die Themenstandards sind je nach doppelter Wesentlichkeit berichtspflichtig oder nicht.

But what does this mean in detail?
To answer this question, let’s take a closer look at some ESRS standards and clarify how they relate to the supply chain.  

ESRS E1 – the climate protection standard

The name says it all: ESRS E1 is about climate protection – in your company and in your supply chain. Your company must therefore not only disclose its own greenhouse gas emissions, but also the CO2 emissions in the upstream and downstream value chain – i.e. in Scope 3. Incidentally, the majority of companies generate the most emissions in this category.
E1 also requires companies to set themselves climate targets.
Transparency about the targets and measures of their own suppliers is crucial in this respect.  

ESRS E5 – Resource utilization and circular economy

The supply chain naturally plays an important role in ESRS E5, as many resources are obtained or processed here.
For example, the CSRD asks for:

  • Measures to avoid the generation of waste
  • Resource utilization
  • Measures to promote the circular economy
  • Cooperation or initiatives to improve the recyclability of products and materials

 

ESRS S2 – Workforce in the value chain

The fact that the ESRS S2 also relates to the supply chain and entails disclosure obligations is already in the name, so to speak.
Among other things, the CSRD is concerned here with how your company fulfills the due diligence obligations.
This means How do you
Ensure compliance with human rights, labor standards andgood working conditions at suppliers ?The CSRD does not require much more than the LkSG. You should also show whether there is a complaints management or whistleblower system for workers in the supply chain, how you handle complaints and resolve any problems raised.  

ESRS S3 – Affected communities

The ESRS S3 addresses the impacts that your company’s operations, products or services, and upstream and downstream value chains have on “affected communities”.
This refers to people and groups who live or work in the same area as a company.
The standard also explicitly refers to impacts on indigenous peoples.
Impacts can arise, for example, from truck transportation, the extraction of raw materials or controversial land use.  

ESRS G1 – Company policy

With regard to the supply chain, your company must
ESRS G1, your company must disclose the following:

  • Management of relationships with suppliers, payment practices, in particular with regard to late payments to small and medium-sized enterprises
  • Strategies for detecting and preventing corruption and bribery, including training for suppliers

However, you do not have to provide information on every standard in your CSRD report.
This depends on whether a topic is material for your company.
VERSO offers you an AI-supported materiality analysis here.
In our white paper “All information on the ESRS” you will also find further detailed information on the European standards, in particular on the transition periods.

Is your purchasing department ready for the ESG requirements?

Companies are now affected by a large number of sustainability requirements – and purchasing is no exception.
Use our checklist to find out whether your purchasing organization is optimally prepared for ESG requirements.

CSRD and the supply chain: opportunities and risks for procurement

The CSRD is a major challenge – we can’t hide that and we don’t want to.
With almost 1200 data points, ESRS reporting is a mammoth task.
It is complex and resource-intensive.
But with the right support, you can manage it – we will be happy to assist you with the sustainable transformation.
What’s more, the CSRD doesn’t just end with a sustainability report.
The fact that your company is systematically addressing the issue of sustainability opens up great opportunities.
The double materiality analysis and reporting will make opportunities and risks in the supply chain more visible.
This enables your company to address these in a targeted manner.
Sustainability requirements can trigger innovations, such as the use of environmentally friendly materials or the optimization of logistics processes.
Many customers also tell us that the reporting process has enabled them to get to know their suppliers even better.
The increased transparency ensures better and more sustainable supply chain practices.
By working closely together, you strengthen long-term partnerships and thus improve the stability and efficiency of the supply chain.
The reporting process promotes digital development.
Software specialized in CSRD, LkSG and CBAM requirements helps monitor the supply chain and ensures compliance with legal requirements.
It can collect and process the necessary large volumes of data.

Risk management for sustainability in the supply chain

In our white paper, you will learn how to implement the requirements of the German Supply Chain Act (LkSG) in a future-proof manner through digitalization and collaboration.

How does CSRD influence purchasing and the supply chain?

CSRD has a major impact on purchasing and requires a high degree of transparency and responsibility.
Your company must collect and provide detailed information and comply with legal due diligence obligations in relation to environmental and social standards.
This includes a new assessment in the purchasing process to ensure that suppliers comply with sustainability requirements.
So you need to be even more careful about who your company does business with.
Teamwork is also required when it comes to climate change.
Climate change and extreme weather will affect us all.
That’s why we need to act together to slow down climate change and reduce its impact.
Climate protection measures must not stop at the gates of your own company: Together with your suppliers, you can implement initiatives that help reduce greenhouse gas emissions.
You can find specific tips for decarbonizing your supply chain in the blog post “Why is climate protection in the supply chain relevant?”.  

How VERSO supports you in implementing the CSRD

VERSO offers you the all-in-one package for implementing the CSRD.
The EU directive makes the topic of sustainability in the supply chain even more relevant, as companies must now also report robustly on sustainability activities in the supply chain.
The VERSO Supply Chain Hub helps procurement to record the necessary data in the supply chain, monitor suppliers and provide the required reporting key figures with minimal effort.
We round off the package for implementing your CSRD obligations with additional software solutions and consulting services.
With VERSO, you can carry out an AI-supported materiality analysis.
In the ESG Hub, you collect all relevant data and create a meaningful sustainability report.
The Climate Hub supports you with your carbon footprint and decarbonization strategy.
And in the VERSO Academy, you will acquire the necessary knowledge about CSRD and ESRS.

* This information is summarized editorial content and should not be construed as legal advice. VERSO accepts no liability.

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Ältere Frau arbeitet am Laptop und guckt sehr konzentriert
15.05.2024

Sanctions at a glance: The cost of mistakes in reporting and implementing sustainability

A slap on the wrist and, if it becomes public, a brief outcry from the public: until a few years ago, companies didn’t have to worry too much if they put sustainability on the back burner or engaged in greenwashing. This is now a thing of the past. Read here about the consequences if the new requirements are not implemented correctly – and get tips on how to do it right!

Some simply lack an overview of their own data.
Others are overwhelmed by the numerous requirements of the new ESG regulations.
Still others underestimate the effort involved and start far too late.
And then, of course, there are companies that try to cover up their lack of commitment to sustainability with falsified information.
The possible reasons for inadequate implementation of the new regulations in sustainability, climate and supply chain management are as varied as the people who implement them for their companies.
Until a few years ago, there were hardly any consequences.
There might have been a shitstorm and a few calls for a boycott, but over time – or a lot of PR work – these soon petered out.
However, with the introduction of the new regulations and guidelines for sustainable business practices, which are being rolled out across Europe as part of the Green Deal, this is now a thing of the past.
Errors and misrepresentations can be expensive.
How expensive exactly?
We have summarized this for you in this article – including recommended reading to help you get it right!

This information is editorial content that should not be construed as legal advice. VERSO accepts no liability.

Sanctions for EU taxonomy, CSRD and SFDR

As far as uniform sanctions are concerned, the trio is unfortunately still rather incomplete.
This is because the three directives have yet to be transposed into national law.
Each EU member state must independently determine the extent to which it wishes to sanction errors in financial and non-financial reporting.
In line with the CSR-RUG – the predecessor of the CSRD – errors in reporting in accordance with the CSRD, SFDR and EU taxonomy will presumably also be penalized in accordance with §331 and §334 HGB.
In figures, this means

  • Prison sentences of up to 3 years
  • For members of authorized representative bodies or supervisory boards of a corporation: prison sentences of up to 3 years; companies face fines of up to 2 million euros or twice the economic benefit they have derived from the incorrect report – whichever is higher.
  • For capital market-oriented companies: Fines of up to 10 million euros, 5 percent of annual turnover or twice the economic benefit – the highest amount is also chosen here.

On top of this – as the fermented icing on the cake, so to speak – there may also be legal action for breach of competition law, exclusion from public procurement procedures and “naming and shaming”, i.e. public disclosure including loss of reputation.
loss of reputation.
Important to know: Only intentional errors and errors due to gross negligence are punishable.
Incidentally, the Auditors’ Association wants to relax the CSRD for auditors: With a cap on the amount of liability and limited liability for gross negligence.
However, this demand has been heavily criticized – so there is still some way to go here.
From 2025, the first court proceedings will show the exact direction of sanctions for breaches of the EU taxonomy, CSRD and SFDR. Read more:

Practical guide to CSRD

Our practical guide, including a checklist, will help you prepare for CSRD reporting.
Find out what challenges there are and how you can overcome them.

Sanctions for LkSG and CSDDD

CSDDD

After a long back and forth, an agreement was reached in March 2024 on the CSDDD; the European supply chain law.
Here, too, there is still some time before it is transposed into national law.
However, the liability and sanction framework in the event of a breach of the due diligence obligations for people and the environment enshrined in the CSDDD is already clear.
Affected companies are liable for all damages that occur along the upstream supply chain due to inadequate or missing risk prevention or remedial measures – unless these are caused by a business partner.
In other words:

  • If your company knows about irregularities and ignores them, supervisory authorities can impose fines of up to 5% of global turnover.
  • Civil liability will also be introduced.
    Those affected can therefore assert claims against your company with the help of NGOs or trade unions, for example.
  • There is also the threat of naming and shaming and exclusion from public procurement.

LkSG

In contrast to the CSDDD, there is no civil liability under the German Supply Chain Act.
However, there are expensive fines if the legal obligations are not complied with.
Under the LKSG, these include environmental and human rights due diligence obligations towards indirect suppliers and, if known, also towards direct suppliers.
Under the LkSG, risks must also be identified, documented and then eliminated or at least minimized.
Otherwise there is a risk of fines of up to 8 million euros.
For companies with an annual turnover of more than 400 million euros, the fine increases to up to 2% of annual global turnover.
And: companies can be excluded from public procurement. Read more:

EU ETS and CBAM sanctions

EU ETS

With the EU Emissions Trading System (EU ETS), the EU aims to cap the emissions of the member states.
Companies only have a certain amount of freedom to emit emissions – otherwise certificates must be purchased.
Non-compliance could result in fines:

  • 100 euros per metric ton of CO2 equivalents emitted without a certificate

In order to avoid certificate prices on the one hand and sanctions on the other, some companies relocated their production to non-EU countries (“carbon leakage”).
The CBAM was therefore also introduced as part of the EU ETS reform.

CBAM

Since January 2024, the CBAM reporting obligation has applied to all companies that import certain emission-intensive goods from non-EU countries.
The so-called “climate tariff” supplements the EU ETS – and entails a whole range of possible sanctions:

  • Transitional phase: If the CBAM report is incomplete, contains incorrect information or is not submitted at all, or is not corrected after being requested to do so, a penalty of 10 to 50 euros per ton of unreported emissions will be imposed.
  • Implementation phase: In accordance with the EU ETS, fines of EUR 100 per tonne of CO2 equivalent are imposed for missing certificates.
  • Anyone importing CBAM goods without the status of authorized user must expect even higher penalties.
  • In addition to the financial sanctions, it is also possible that the “Authorized Declarant” status will be withdrawn – the company concerned would then no longer be allowed to import CBAM goods from 2026.

Good to know: As a CBAM applicant, you will have noticed that there was a delay in activating the registration options.
As a result, the first CBAM reports could not be submitted on time.
According to the Federal Environment Agency, however, this delay will not be penalized. Read more:

Is your purchasing department ready for the ESG requirements?

Companies are now affected by a large number of sustainability requirements – and purchasing is no exception.
Use our checklist to find out whether your purchasing organization is optimally prepared for ESG requirements.

Sanctions with the EUDR

Supply chain officers and buyers must prepare for even more sanctions.
At the end of 2024, the directive for deforestation-free supply chains – the EUDR – will come into force.
If you place products on the EU internal market that have been produced without deforestation, you could face the following penalties under the directive:

  • Skimming off profits unlawfully made as a result of non-compliance with the EUDR
  • Fines in proportion to forest damage and value of goods, but at least 4 % of annual turnover
  • Seizure of goods or products
  • Temporary import bans
  • Exclusion from public funds and public tenders
  • Inclusion in a public list incl.
    Information on the violation

Also important: If you do not have the relevant geo-information and proof of origin for your goods, you will no longer be allowed to import them into the EU once the EUDR comes into force.
Keep this in mind now if you are ordering goods that you want to import into the EU internal market from 2025. Read more:

Sanctions under the Green Claims Directive

There is already a whole range of regulations on environmental claims and environmental labeling systems on the market.
The Green Claims Directive will be added shortly.
It is specifically aimed at advertising claims that make a product or company appear more sustainable than it actually is.
False green claims are punished as follows:

  • Fines of at least 4% of the annual turnover
  • Exclusion from public procurement
  • Recovery of the revenue that your company has generated through the false statements.

Read more:

Save money and nerves with VERSO

To ensure that companies do not approach the sustainable transformation too carelessly, the EU provides for “effective, proportionate and dissuasive” measures in any case.
In view of the possible sanctions, we are happy to believe this – and help you to correctly implement the guidelines and regulations that apply to you.
Not only our top software, but also our experienced consultants and our specialized partners are at your side.
Feel free to get in touch with us!

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  • Pragmatic all-in-one solution for ESG reporting, climate and supply chain management
  • Individual advice from the VERSO experts
  • Developed with expertise from 12+ years of sustainability management
  • Trusted by 250+ customers

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LKW auf einer Landstraße als Symbolbild für die Lieferkette
28.03.2024

Why is climate protection relevant in the supply chain?

In this blog post, we take a look at why climate protection is also a high priority in the supply chain from two perspectives. You will also find specific tips for decarbonizing your supply chain.

LkSG and CSDDD – when you hear these terms, the first thing that comes to mind is human rights due diligence in the supply chain, such as fair working conditions and protection against slavery.
Climate protection?
Perhaps only a second thought.
However, it should definitely not be neglected in the sustainable transformation of supply chains.
After all, this is where the majority of a company’s emissions are generated.
And that has consequences.
In this blog post, we take a look at why climate protection in the supply chain is also a high priority from two perspectives.
You will also find specific tips for decarbonizing your supply chain.

Climate protection in the supply chain – because it is required by law

The first reason is quite banal: Climate protection must be taken into account because it is quite simply imposed on certain companies by law.
The basis for current sustainability legislation is the Paris Climate Agreement.
With this agreement, almost 200 countries have committed themselves to the global 1.5° target and the reduction of emissions, among other things.
The Paris Climate Agreement is the basis for the European Green Deal a strategy with which the EU aims to become climate-neutral by 2050.
A whole range of strategies have been planned for its implementation.
The most important of these for purchasing are the German Climate Protection Act (GHG neutrality by 2045), the EUDR (deforestation-free supply chains), the CSDDD (EU supply chain law) and the CSRD (sustainability reporting).
Added to this is the “Fit for 55”-package, which aims to reduce net greenhouse gas emissions in the EU by 55% by 2030. This results, among other things, in the CBAM (CO2 tax) and a reform of EU emissions trading. In addition, Germany has introduced the LkSG which was developed on the basis of the National Action Plan for Business and Human Rights.

Darstellung: Auf dem Pariser Klimaabkommen bauen die meisten der aktuellen Nachhaltigkeitsgesetze und -regularien auf

All of these guidelines directly and indirectly oblige companies to prioritize climate protection in their supply chains.
For example, the CSDDD draft paper – in relation to the CSRD climate obligations – explicitly requires “that the company’s business model and strategy are compatible with the transition to a sustainable economy and with limiting global warming to 1.5 °C in accordance with the Paris Agreement and the goal of climate neutrality in accordance with [dem EU-Klimagesetz], including [der Ziele] for climate neutrality […].”(CSDDD draft of 15.3.2024 , Art. 15) So much for the dry legal perspective.
However, as we already wrote in the ESG Briefing, we at VERSO are convinced that anyone who does not take a holistic approach to the topic of sustainability strategy will only end up with bureaucratic red tape without any added value as a result of the requirements. So let’s take a look at why climate protection in the supply chain is incredibly important, even beyond legal obligations!

Climate protection in the supply chain – because it makes companies future-proof

Climate change poses risks for supply chains

The supply chain is the backbone of every company.
But it is also one of the biggest sources of greenhouse gas emissions.
Depending on the industry, up to 80% of a company’s total emissions are generated here alone.
By now, everyone should be aware that greenhouse gas emissions – especially CO2 – fuel climate change.
And this has consequences for the supply chain.
Because with global warming, storms, heavy rain, floods, but also heatwaves with droughts and fires are becoming more frequent worldwide.
These extreme weather events can damage, block or completely destroy production facilities and transport routes.
This results in delivery delays and production and harvest failures with considerable financial losses and frustration among customers.
On the other hand, there is the growing global demand for raw materials of all kinds. This is not just about rare earths or important metals, but also about very basic things such as drinking water and food.
And where resources become scarce, conflicts, tensions or even wars are not long in coming.
It is clear as daylight that this is a real problem for the local people on the one hand, but also for your supply chain on the other.
It is therefore in the interests of procurement to help curb climate change with climate protection measures along the supply chain.

Supply chain resilience with VERSO

Gain transparency, reduce dependencies, keep an eye on current crises: Find out how you can strengthen your supply chain with the VERSO Supply Chain Hub!

Customers and consumers demand sustainability

Sustainability – and therefore also climate protection – is becoming increasingly important for investors, customers and consumers when making purchasing decisions: 79% of consumers surveyed in a Capgemini study stated that they are changing their purchasing behavior in the interests of sustainability.
66% even responded that they specifically look for environmental friendliness when selecting products and services.
Sustainable, climate-friendly products are therefore a) becoming a competitive advantage.
But be careful: If it says climate protection on the label, it must really contain climate protection!
With the Green Claims Directive, false or vague environmental claims (greenwashing) lead to expensive fines.
Not to mention the loss of reputation for your company.
And even if the CSDDD no longer directly affects SMEs and companies can no longer simply pass on their due diligence obligations to their suppliers: The Business Development Bank of Canada found that 92% of large companies will demand clear ESG information from their suppliers.
ESG commitment is therefore also b) becoming a decision criterion when awarding contracts.

Measures for climate protection in the supply chain

In summary, we can therefore state the following: On the one hand, climate protection in the supply chain is a must because it is simply required by law in various forms.
At the same time, however, it also presents opportunities!
If you start decarbonizing your supply chain now, you will make it more resilient to climate change risks and their effects.
At the same time, you will meet the growing sustainability demands of customers and consumers.
And you protect yourself against rising costs, such as those associated with the carbon pricing that the CBAM places on imports.
The challenges associated with the sustainable transformation of the supply chain are therefore more than worth it.
Don’t you agree?
Last but not least, only one question remains: What does climate protection in the supply chain mean in practice?
You can find specific tips on reducing emissions in the supply chain in our article “Decarbonizing the supply chain: How companies can achieve their climate targets along the supply chain”.
Read on now!  

* This information is summarized editorial content and should not be construed as legal advice. VERSO accepts no liability.

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  • Pragmatic all-in-one solution for ESG reporting, climate and supply chain management
  • Individual advice from the VERSO experts
  • Developed with expertise from 12+ years of sustainability management
  • Trusted by 250+ customers

Get to know the software!

Aufgerollte Stahlbleche als Symbolbild für die Dekarbonisierung der Lieferkette
04.03.2024

Decarbonizing the supply chain: How companies achieve their climate targets along the supply chain

Around 80% of total emissions are generated along the supply chain – the path to Net Zero therefore also requires clear climate targets for the supply chain. But targets alone are not everything. Read here to find out how to implement them.

In recent years, numerous companies have clearly felt that their supply chains are susceptible to crises.
As a result, more and more companies have committed themselves to a sustainable transformation of their business model.
The push for sustainable business practices also soon came “from the very top”: with the European Green Deal, the EU has set the ambitious target of climate neutrality by 2050.

Transparency beyond one’s own nose

One of the pillars of the Green Deal is the CSRD, which obliges companies to report on sustainability.
This means that companies must disclose detailed data on the status quo, their goals and their sustainability measures.
With the ESRS, a set of rules has been introduced specifically to request this data.
However, seamless sustainability reports require one thing above all: 100% transparency.
And far beyond the boundaries of the company itself.
The LkSG, EUDR and CBAM alone demand supply chain transparency from companies.
In addition, the ESRS E1 standard (“Climate Protection and Climate Change”) in particular requires clear targets and strategic planning for all emissions associated with your company – right through to Scope 3.

Überblick zu den einzelnen Scopes: Scope 1 umfasst direkte Emissionen eines Unternehmens, Scope 2 umfasst indirekte Emissionen eines Unternehmens und Scope 3 umfasst alle Emissionen, die in der Wertschöpfungskette eines Unternehmens entstehen.

With an average of 80% of total emissions, the majority of a company’s emissions are generated along the supply chain.
Scope 3 emissions have the greatest impact on the carbon footprint.

The ESRS at a glance

With the new CSRD reporting obligation, the EU is also introducing uniform European standards for comparable sustainability reports – the ESRS.
Get an overview in the factsheet!

Your company therefore needs clear answers on the status of emissions along the supply chain – and how you can decarbonize your supply chain in a targeted manner.
Do your suppliers keep an eye on their emissions, or do they not care?
Can they provide you with data on this?
And if not, do they at least intend to provide the necessary data in the future?
Can you persuade them to work with your company to drive sustainability forward?
Questions upon questions.
Let’s take a look at how you can get answers.

4 steps to decarbonize your supply chain

Step 1: Estimate Scope 3 emissions

Get an overview of your suppliers and compile a list of expenditure and product groups.
You can use this to estimate supplier emissions.
If you lack precise data, you can initially fall back on average data for the sector.
Make the distribution more precise as soon as you have primary data from the suppliers.

Step 2: Identify Scope 3 hotspots and assess suppliers’ climate maturity

Then categorize your suppliers according to their level of climate maturity.
Supply chain tools such as the VERSO Supply Chain Hub make this possible via direct inquiries.

  • No maturity level available: Decarbonization strategy or measures are completely lacking.
  • Low level of maturity: Initial steps have been taken to reduce CO2, but no systematic approach yet.
  • Advanced maturity level: Concrete reduction measures are being implemented, but are not yet anchored in the business processes.
  • High degree of maturity: The supplier systematically implements decarbonization, reduction measures are firmly integrated into the corporate strategy.
  • Very high level of maturity: Sustainability has long been on the agenda.
    With innovative approaches and high standards, the supplier is leading the way as a prime example.

Indicators for this are, for example
The origin of raw materials, energy and resource efficiency, the use of renewable energies in production and transportation or verified (!) CO2 compensation projects.
Another plus point would be, for example
the voluntary provision of a sustainability report.
You now know how high the emissions load per supplier/product is and how seriously your suppliers are already taking the issue of sustainability.
This gives you an overview of which suppliers need special attention and support when you later implement the strategy to achieve your decarbonization goals.

Step 3: Set climate targets, onboard suppliers

Set clear, science-based climate targets for your supply chain that are in line with the results of climate research and support the Paris Climate Agreement (limiting global warming to 1.5 °C).
You can find industry-specific assistance from the Science Based Targets Initiative (SBTi), for example.
The next step is the actual decarbonization of the supply chain.
The SBTi recommends the following approach:

  1. Communication
  2. Cooperation
  3. Support
  4. Monitoring
  5. Reinforcement

Inform your suppliers about your climate targets for the supply chain and motivate them to cooperate.
Our tip: Increase the chance of good cooperation by involving your suppliers in the target setting from the outset. Net Zero is teamwork!

Step 4: Implement climate strategy

In the long term, you will only achieve your climate targets in the supply chain if you remain in close contact and support your suppliers in implementing the targets.
This could look like this, for example:

  • Enforce specific measures – Walmart has supported its suppliers in switching to renewable energy, for example, which helped the Group achieve its supply chain emissions targets 6 years ahead of schedule.
  • Support with knowledge or resources – for example, you can increase
    Increase your suppliers’ sustainability expertise and therefore their level of climate maturity through training.
  • Stimulate competition among suppliers – by 2024, 92% of companies will require ESG data from their suppliers, according to a BDC study; over the next 5 years, they will also increase the number of criteria on which suppliers must report.

Also help your suppliers to optimize processes or even break completely new ground.
Continuously monitor progress and make climate targets a fixed item on the agenda of your supplier meetings.
After all, genuine sustainability requires transparency and honesty.
But it also needs consistency.
So make sure your suppliers understand this: Anyone who doesn’t participate will be kicked out sooner or later.
Suppliers with a low level of maturity in particular will not be able to make the switch overnight.
Nevertheless, they should show a long-term willingness to make production and transportation sustainable.
After all, this will not only help the climate – but also the company’s own resilience.

How can I achieve the climate targets for my supply chain as easily as possible?

The more complex your supply chain is, the more difficult it is to collect all the necessary data, determine the status quo and monitor progress.
In discussions with our supply chain consultants, it becomes clear time and again that a lack of resources and incomplete data floating around make life difficult for procurement.
So how do you achieve your climate targets in the supply chain as simply and automatically as possible? With the right tools! The combination of VERSO Climate Hub and VERSO Supply Chain Hub helps you to strategically manage your climate targets according to SBTi or ESRS:

  • The VERSO Climate Hub simplifies the calculation of your carbon footprint, taking into account the individual scopes.
  • With the VERSO Supply Chain Hub, you can automatically query the climate protection maturity level of your suppliers and obtain specific carbon footprints.
    These in turn help you to refine your climate strategy in the Climate Hub and make savings transparent.
  • You can then use the reporting function to create qualified reports in accordance with GRI/CSRD for the CDP or SBTi in no time at all.
Übersicht: So gelingt die Lieferketten-Dekarbonisierung mit den Tools von VERSO. VERSO deckt die Scope-3-Priorisierung, die Klimadatenerfassung, die Maßnahmen und das Klimareporting für die Lieferkette ab.

Please write to us. Together we will find a solution to help your company achieve its Net Zero goals!

* This information is summarized editorial content and should not be construed as legal advice. VERSO accepts no liability.

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Containerhafen mit Containerschiff – Der CBAM verschärft den Warenimport in die EU durch eine CO2-Steuer © Suriyapong Thongsawang, Getty Images via canva.com
07.11.2023

Fit for CBAM: background, key data and requirements

On October 1, 2023, the CBAM – the Carbon Border Adjustment Mechanism – became mandatory for many companies in the EU. This article will give you a quick overview of how the CBAM works and how you can prepare your company specifically for the new requirement.

To get started: What is the CBAM?

CBAM (“Carbon Border Adjustment Mechanism”) is the official title of the new Regulation EU 2023/956.
To understand the background to this regulation, it is best to go back to 2005.
This was the year in which the European Emissions Trading Scheme (EU ETS) was introduced; the European instrument for implementing the Kyoto Protocol.
In order to actually achieve the climate protection targets set, the EU has adapted the emissions trading system several times – most recently in 2021, as part of the Fit for 55 package.
The EU ETS aims to limit emissions with a cap and trade system.
An upper limit is set for the amount of emissions that companies are allowed to emit.
If these are not sufficient, allowances can be purchased.
This has been a problem in recent years.
In order to avoid the strict EU requirements and the associated costs, some companies have relocated their CO2-intensive production to countries with no or lower CO2 prices.
This phenomenon is also known as “carbon leakage” or “relocation of CO2 emissions”.
The CBAM now wants to counteract this. The goals at a glance:

  • General strengthening of emission reduction measures
  • Encouraging the reduction rather than displacement of emissions in production
  • Protection of companies producing in the EU from competitive disadvantages

After publication on August 17, 2023, the CBAM officially came into force on October 1, 2023.
Anyone importing emission-intensive goods into the EU is now obliged to purchase offsetting CBAM certificates.
For the time being, however, companies are granted a transitional period.
We’ll take a closer look at this in a moment – but first an important question: who does the new CO2 border adjustment system actually apply to?

Who does the CBAM apply to?

CBAM initially affects all companies that import the following groups of goods in pure or processed form from non-EU countries:

  • Iron and steel
  • Cement
  • Fertilizer
  • Aluminum
  • Hydrogen
  • Electricity

The EU reserves the right to adapt regulations and product groups until 2026.
The scope of application will therefore be extended in the future.
The new regulations cover both direct production emissions and indirect emissions from the manufacture of primary products or the electricity required.
In contrast to the recently introduced CSRD, the CO2 border adjustment mechanism does not differentiate between turnover and employee figures.
The new system is therefore mandatory for almost all companies in the manufacturing and production industry, provided they import from third countries.

Infografik: Diese Warengruppen sind vom CBAM betroffen (verarbeitet und in Reinform): Eisen und Stahl, Zement, Düngemittel, Aluminium, Wasserstoff und Strom. Die Pflicht gilt unabhängig von Mitarbeiterzahl und Bilanz / Erlösen.

Are you affected? What your company has to do now

Let’s move on from theory to practice.
After coming into force on October 1, 2023, a transition period began.
During this period, your company is only required to report.
By 2030, all products that are subject to EU emissions trading should be included in the CBAM.

Zeitstrahl: Fristen und Phasen vom CBAM 17.08.2023 Veröffentlichung CBAM-Durchführungsverordnung 01.10.2023 Inkrafttreten, Beginn der Übergangsphase 01.01.2024 Beginn der Berichtspflicht 
01.04.2024 Ende der Möglichkeit, Standardwerte für THG-Emissionen zu verwenden
01.01.2025 Registrierungspflicht für CBAM-Anmelder 01.01.2026 Beginn der Implementierungsphase & Zertifikatehandel

CBAM reporting obligation: requirements and timetable

Until the end of the reporting phase, you are required to create quarterly updated reports on the goods you have imported.

How can I prepare for the CBAM?

Step by step: Which specific goods are subject to CBAM, which are exempt from the mechanism and how you can prepare specifically for your new reporting obligation.

This belongs in the CBAM report

Even if it sounds like a lot of work: Stick to your obligations and check your supply chains.
The CBAM Regulation provides for “proportionate and dissuasive sanctions” in the event of non-compliance.
Even in the transition phase, penalties of 10 to 50 euros per non-reported tonne of CO2 emissions are envisaged.

Das gehört in den CBAM-Bericht: Ab 1.10.2023 Quartalsbericht einen Monat nach Quartalsende. Zu berichten sind Stammdaten Ihres Unternehmens, CBAM-Accountnummer, Anzahl und Art importierter Waren, spezifische CBAM-relevante THG-Emissionen, CO2-Ausgleichspreis im Herkunftsland Ab 31.5.2026: CBAM-Erklärung zum Vorjahr (Startjahr 2026) Zu berichten sind Gesamtmenge importierter Waren, Gesamtmenge grauer Emissionen jeder Warengruppe, Gesamtzahl der CBAM-Zertifikate die den Grauemissionen zugeordnet sind – minus des im Ursprungsland entrichteten CO2-Preises

Compensation obligation and certificate trading

From 01.01.2026, the following applies: All emissions that your company has not yet offset in the country of origin of your goods must now be taxed.
To do this, you first need a CBAM registration authorization for your company’s branch.
Only “approved registrants” will be entitled to purchase certificates and import CBAM goods from 2026.
You can then purchase unlimited certificates for your company on a central platform.
It is up to the applicant to calculate the necessary compensation and purchase a corresponding quantity of certificates.
The price is based on the weekly average price of EU ETS certificates.
In principle, you should always have enough certificates available to offset at least 80 percent of the imported goods.
The certificates are valid for two years and can be surrendered.

How can I prepare for the CBAM?

Step by step: Find out briefly and concisely in the factsheet which specific goods are subject to CBAM, which are exempt from the mechanism and how you can prepare specifically for your new reporting obligation.

The CBAM is here – VERSO helps

As you can see: With the CBAM regulations, your company once again has a lot on its plate.
What is intended to be a sensible and above all important step for the environment and the economy is in practice associated with a lot of bureaucracy and effort – especially when it comes to collecting all the necessary data.
With VERSO, you can avoid the data chaos.
In the CBAM module of the Supply Chain Hub, you can automatically and efficiently record all the data that the new CO2 border adjustment system requires of you.
Watch a free demo now to see how it works:

* This information is summarized editorial content and should not be construed as legal advice. VERSO accepts no liability.

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Mountainbiker in einem Bergwald – Symbolbild für Nachhaltigkeit in der Lieferkette des Reifenherstellers Schwalbe
26.04.2023

Taking a holistic approach to responsibility – Interview with Felix Jahn from Schwalbe

Since Schwalbe was founded in 1922, the family-run company Schwalbe has stood for innovation, quality and responsibility. In this interview with Felix Jahn, Head of Sustainability at Schwalbe, you can find out what makes Schwalbe environmentally and socially responsible and how VERSO supports Schwalbe in achieving more sustainable supply chains.

7 questions for Felix Jahn, Head of the Sustainability Department at Schwalbe

1. what characterizes responsibility at Schwalbe?

Our vision is to lead the way in the development of environmentally friendly products.
We are pioneering innovations in the circular economy and taking responsibility for future generations.
For example, we take back our used products via specialist retailers and recycle them in the production of new inner tubes and tires.
We will be presenting the first tire produced from the recycled material from the tire recycling process, among other things, at Eurobike this year.

2. how would you describe your mission when it comes to responsibility?

We try to take a holistic approach to the issue of responsibility, which is why we have defined four areas of action for ourselves: One is the product field of action – this includes environmentally friendly products, but also our recycling systems.
We have the company field of action; this includes our cradle-to-cradle building here, for example, as well as the promotion of our employees and our mobility concept.
We have another important area of activity – social commitment.
As a family-run company, we have strong roots here in our region, but we also look beyond our own backyard, as our supply chain is global.
And that’s why our fourth area of activity is the supply chain.
We are very proud of our Fair Rubber project.

3. what next fields of action have you defined at Schwalbe in the area of sustainability?

For us, the next few years will be characterized by significantly reducing emissions here locally, but also particularly in our global supply chain.
At the same time, we are trying to offer our recycling systems throughout Europe and continuously increase the use of renewable and recycled materials.
And, of course, we want to create transparency in our supply chain.

4. the supply chain is part of the 4 pillars of responsibility at Schwalbe.
What does responsibility mean with regard to your supply chain?

We work on a transparent and traceable supply chain to protect our stakeholders and meet our high standards.
We have a strict code of conduct to ensure human rights, labor and environmental protection.
We actively seek dialog with our stakeholders, with the partners in our supply chain, in order to know what is happening where.
A good example of this is our involvement with Fair Rubber e.V. – the Fairtrade association for natural rubber.
By working together, we have been able to enter into a close exchange with the small farmers of natural rubber in order to improve their working and living conditions bit by bit.
We are also very proud of the fact that we have been working with our production partner, Hung A from Korea, for 50 years.
We produce in Indonesia and Vietnam and are very well informed about the situation on the ground and know all the processes.
We work together with VERSO to transfer this self-image to our suppliers.

5. how did you become aware of VERSO and why did you choose the VERSO Supply Chain Platform?

We got in touch with VERSO (formerly sustainabill) two years ago via a customer and were able to get to know the platform very well.
In the meantime, VERSO has established itself as the industry standard in the bicycle industry.
That’s why it was very clear to us that VERSO would be our partner when we really got going with the topic of responsibility in the supply chain.

6. how do you rate the VERSO Supply Chain Platform and which functions do you find particularly useful?

VERSO enables us to reduce our workload enormously because manual documentation is largely eliminated.
And that helps us in the digitalization of our Green KPIs.
The platform is very easy to understand and intuitive to use.
Above all, the visualization of the supply chain helps us to build an understanding of our partners.
With VERSO, we can easily record and evaluate data and export it even faster.
In addition, VERSO Support is always there for us and can support us.
It is also interesting to note that as a user of the VERSO supply chain platform, we basically have a dual role.
We are both a registered supplier on the platform and a VERSO customer.
In other words, we serve our customers on the platform with our company data and at the same time request company data from our suppliers via the platform so that we can gain insight into our supply chain.

7. what are your plans for the future in the area of responsibility and what role does the supply chain play in this?

We already collect and reduce our emissions here on site, but we are well aware that the majority of our emissions are generated in the supply chain.
That’s why we want to work even more closely with our suppliers in future to make progress, take responsibility together and achieve our goals.
With regard to our supply chain, this also means that we want to address the relevant upstream suppliers after surveying our Tier 1 suppliers.
We take a holistic approach to responsibility.
This starts at the beginning of the supply chain, through production and use to beyond the life cycle of the product – closing the circle.

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