What does CSRD mean for supply chain managers?

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2 Minutes Read


In November, the EU signed the Corporate Sustainability Reporting Directive (CSRD) into law. 

This is the latest in an increasing number of heavily-acronymed reporting requirements to encourage more responsible businesses, such as NFRD (Non-Financial Reporting Directive), TCFD (Task Force for Climate-related Financial Disclosure), and TNFD (Task Force for Nature-related Financial Disclosure). These directives and task forces will be followed by additional legislature across the globe. This includes the newly proposed climate risk disclosures from the US Securities and Exchange Commission (SEC).

 

What does this mean for supply chains?

You’ve probably heard it said before that the majority of an average business’s carbon emissions come from its supply chain. That means you can expect the current awareness of supply chains to increase. While supply chains have already been under scrutiny in the wake of Covid, it’s likely there will be new interest in how sustainably you’re performing.

With the first set of companies due to report on their 2024 data, getting a system for gathering and utilising that data in place will be key for 2023. That means you’ll need to act quickly to determine how you will report and how your emissions data will be assured by a third-party. 

 

What CSRD means for supply chain managers

As a supply chain manager, the introduction of CSRD means your goals will likely evolve to include more sustainable initiatives. This will involve calculating and reporting on your supply chain’s sustainability and creating reasonable strategies for improving your company’s overall sustainability through supply chain. You’ll also be the one the leadership team comes to when they want to know about Scope 3 emissions.

Scope 3 emissions are the ones that you don’t have direct control over. The most significant part of this is going revolve around your logistics providers. What makes that difficult is that they aren’t obligated to share their emissions data with you and uncovering it on your own is highly unlikely. That can put you in kind of a tight spot.

What you’ll need to do is come up with a plan for getting that data in a way that is meaningful to both the leadership team and the report auditors. You’ll have two primary options for getting this done: bringing in an external consultant and using an AI-powered platform. Which one makes sense for you will likely come down to stakeholder needs. 


That said, it’s worth remembering that a)consultants aren’t likely to have much more access to your provider data than you and b) these reports will need to be made annually, so bringing in a consultant every year can become costly. 

You’ll also likely be expected to input into short, medium and long-term sustainability goals for your supply chain. So the more data you can have available. Having software that can both identify where your emissions are now and help you determine a path toward reducing them could prove very helpful.

 

Get ahead of the curve and check out The ultimate guide to Scope 3 emissions reporting. It’s a handy workbook that has all the information you need to get prepared for CSRD and even help lead your company toward more successful reporting.

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