SUPPLY CHAIN ACT
Advice for your company
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SUPPLY CHAIN ACT
Companies are obliged to check their own business operations and their supply chain for human rights and environmental risks. Specifically, this concerns worker protection (e.g. child labour, forced labour, fair pay), the protection of livelihoods (e.g. soil degradation, air pollution), the production and use of environmentally hazardous substances (e.g. mercury or POPs) and the prohibition of exports of hazardous waste.
We advise and support you in the implementation – regardless of whether you are directly affected by the Supply Chain Act or supply a customer affected by the Act.
TERRA AS A STRONG PARTNER IN THE SUPPLY CHAIN ACT
Founded in 2010, the Terra Institute has been committed to supporting companies in their efforts to achieve sustainable business practices from the very beginning. We see ourselves as competence partners for innovation and sustainability and work together with companies, regions and individuals who want to make their contribution to the global change towards sustainability.
Our services range from consulting and coaching to facilitating and training, as well as developing workshops tailored to you, your status quo and your needs. We are also happy to actively support you in the implementation of the Supply Chain Act. Our many years of experience in sustainability consulting make us ideal companions for your business transformation.
What can Terra do for you in implementing the Supply Chain Duty of Care Act?
We work with you to identify where you are not yet complying with the necessary due diligence requirements (GAP analysis) and develop an action plan. We also bring transparency to your supply chain so that you can carry out the required risk analysis.
With the support of our competent team, which is well versed in all aspects of the Supply Chain Act, it is made much easier for affected companies to understand and concretely implement the requirements.
Even companies that are not directly covered by the Act will be audited as direct suppliers of an affected company in the area of risk analysis. Accordingly, even a company that is not directly affected must be able to transparently disclose the extent to which it complies with human rights and environmental criteria requirements.
HOW DO OUR CLIENTS BENEFIT FROM HELP WITH A SUPPLY CHAIN LAW CONSULTATION?
In light of this law and all future regulatory measures, it is beneficial to take a strategic and holistic view right from the start. This way, as a sustainability consultancy, we can work together with our clients to ensure due diligence and make the supply chain more sustainable, e.g. by recording CO2 emissions (Scope 3) or defining further environmental criteria.
We also keep abreast of other legislation that also affects the supply chain and its management, such as the EU’s Corporate Sustainability Reporting Directive (CSRD). This obliges companies to report publicly on their sustainability activities according to a specific standard and also covers the supply chain and human rights compliance. A combination makes sense and saves resources in the company.
The planned European supply chain law (Corporate Sustainability Due Diligence Directive – CSDDD) will probably add more far-reaching environmental aspects, for which we can already prepare companies in the best possible way today, so that they do not have to realign their strategy again after the law has been passed and implemented. In addition, a link to the Paris Climate Agreement is expected, so that large companies will have to present a plan that shows how the company’s business model and strategy are compatible with the transition to a sustainable economy and the limitation of global warming to 1.5 degrees.
We also advise on formulating a climate strategy or looking at the entire value chain through the lens of the circular economy. This leads to companies repositioning themselves in the field of sustainability and gaining a competitive advantage by strengthening their reputation. In the long term, investing in the future of supply chains will also lead to cost savings (e.g. by improving energy efficiency) and risk minimisation (e.g. value alliances with suppliers).
WHO HAVE CHOSEN US
HOW DOES TERRA GO ABOUT CONSULTING?
Fundamentally, the following are the first four steps:
- Understand: Present the supply chain transparently, develop a basic understanding of a sustainable supply chain.
- Analyse: Identify due diligence obligations, analyse, assess and prioritise risks.
- Act: Anchor through effective measures, processes, structures and control mechanisms.
- Report: File credible sustainability reports
We advise companies in these different stages and thus enable you to implement the requirements in a sound manner.
Concrete measures, which our consultants will go through with you, can look as follows – here, even companies that are not affected by the Supply Chain Act per se can find orientation. This is also exciting for foreign companies, as an even more far-reaching draft law regulating sustainable supply chain management is soon to be passed at EU level.
- Establish a complaints management system
- Publish a policy statement (description of human rights strategy, code of conduct for employees and suppliers)
- Prepare a risk analysis (annual and ad hoc analysis of own business units and suppliers)
- Establish preventive measures (internal training, sustainable procurement strategies)
- Taking corrective action (if violations or breaches of the law exist)
Other questions that may be relevant as part of a holistic consultation process:
- How resilient are our supply chains with regard to current developments (global warming, weather extremes, pandemics, biodiversity loss, etc.)?
- How accurately have risks in our supply chain related to these issues been analysed so far?
- How reliable are the relationships with suppliers?
- Are these relationships sufficiently stable to be able to make changes together?
AT A GLANCE: SUMMARY SUPPLY CHAIN ACT FAQ
1. WHAT IS THE SUPPLY CHAIN ACT ACTUALLY?
2. WHEN DOES THE SUPPLY CHAIN ACT COME INTO FORCE?
Among other things, this should make it possible to record all downstream and upstream activities. From 2025 onwards, companies in the EU with more than 250 employees and a net annual turnover of more than 40 million euros could be affected.
3. WHO DOES THE SUPPLY CHAIN ACT AFFECT?
However, companies may also be affected that do not fall directly within the scope of application, but are active as suppliers to a company that falls under the above-mentioned requirements. However, these supplying companies cannot be affected by fines or legal requirements. If there are violations of the requirements of the Supply Chain Act in these directly supplying companies, the company must also take action here with regard to the respective point.
SUPPLY CHAIN LAW CONSULTING – OUR TEAM
Hans W. Steisslinger
Hans W. Steisslinger, a chemist by training, has a broad knowledge of the natural sciences coupled with a systemic understanding of business as part of society and nature.
His work focuses on strategy development and implementation. He has personally screened various supply chains and audited suppliers on the ground in all parts of the world.
Her core competencies are in the areas of human rights and supply chain, and sustainability strategy and reporting.
With a Master’s degree in Gender, Culture and Social Change, she is particularly active in social sustainability issues at the Terra Institute.
Her focus is on sustainable procurement and supply chain legislation (LkSG and CSDDD).
Through her operational work in procurement and as a consultant, she understands supply chains, knows the processes of sustainable supplier management, and the benefits of digitalisation in procurement.
Through her previous professional experience in a renowned political strategy consultancy, political scientist Xenia Knorr has a deep understanding of socio-political development and requirements.
With the help of circular solutions and the development of a circular economy, she wants to brew a bridge for companies to a way of doing business that enables the preservation of our livelihood.
Do you have any questions or would you like our support on your way to becoming a sustainable company?
The easiest way to get in touch with us is here!
Thank you very much! We look forward to receiving your message!
Tel. +39 0472 970 484.
Terra Institute Srl
Via Sant'Albuino 2
39042 Bressanone (BZ)
INNSBRUCK OFFICE AUSTRIA WESt
Maria Theresienstr. 34
Tel. +39 0472 970 484