The CS3D Digest #17

Welcome to the seventeenth edition of The CS3D Digest, a dedicated newsletter by Ripple Research and your weekly compass for navigating conversations that matter in the corporate sustainability landscape. Our goal is simple—to keep you informed about the latest developments in the Corporate Sustainability Due Diligence Directive (#CSDDD) space as we further our understanding of it.

Read our previous editions to catch up, and subscribe for future updates!

In today's roundup, we look at EU's ban on products linked to forced labor, new EU legislation prohibiting single-use plastics, SEC's updated climate-disclosure rules, investors' perspective on regulatory reporting requirements, and Lufthansa-Climeworks partnership for carbon removal.

Before we dive in -- don't forget to follow Truth Be Told, our newest initiative to keep you abreast with the latest developments in the world of mis- and disinformation.

What are we reading?

We've employed our proprietary AI tools to curate the most engaging news about CS3D. Our focus extends beyond what's trending at the moment to showcase headlines that are fueling meaningful conversations around the world.

1. New EU agreement bans products linked to forced labor

The European Council and Parliament have reached a provisional agreement on a regulation to prohibit products made with forced labor in the EU market. This applies to both imported and domestically produced goods. The agreement aims to combat modern slavery, affecting roughly 27.6 million people worldwide. National authorities will lead investigations for potential violations within their territories, while the EU Commission will handle those outside the EU. Final decisions will be made by the investigating authority, with the possibility of exemptions for specific components found in violation.

2. EU lawmakers agree to ban single-use plastics

The EU lawmakers have provisionally agreed to ban single-use plastic items such as sachets of ketchup and hotel mini-toiletries by 2030 to cut packaging waste. However, cardboard fast-food cartons and coffee cups remain untouched, marking a win for paper manufacturers who have lobbied against the regulation since 2022, when it was first proposed by the European Commission. The initial proposal included goals for using reusable packaging in specific areas like beverages, food containers, and shipping pallets. However, these goals were removed from the final agreement after facing strong opposition from countries with powerful paper and recycling sectors, like Finland and Italy. The agreement still requires final approval from the European Parliament and member states.

3. Securities and Exchange Commission publishes rules for climate-related disclosures

The Securities and Exchange Commission (SEC) has finalized rules to improve climate-related disclosures by public companies and in public offerings. Responding to investor demands, these rules aim to provide clear and reliable information on the financial impacts of climate-related risks. Companies must now disclose climate-related risks that could affect their business strategy, financial health, and operations. The rules will be integrated into SEC filings for enhanced reliability and take effect 60 days after publication in the Federal Register. Compliance deadlines will be phased in based on a company's filing status.

4. 90% of Investors believe regulatory reporting requirements improve investment decisions, survey finds

A new Workiva survey shows that the majority of investors believe that ESG reporting regulations, such as the EU’s CSRD and the SEC’s climate reporting rules, will enable better investment decisions. However, 74% of company executives say complying with these regulations will be difficult due to challenges like data collection and technology limitations. Investors have also voiced support for integrating financial and ESG reporting, with 88% expressing that they are more likely to invest in a company with integrated reporting. On the other hand, 85% of executives agree that integrated reporting will make it easier for companies to comply with the requirements.

5. SWISS, Lufthansa Group partner with Climeworks for carbon removal

Climeworks, a Zurich-based Direct Air Capture (DAC) carbon removal provider, announced a long-term agreement with Lufthansa Group and Swiss International Air Lines to address unavoidable CO2 emissions. DAC technology, endorsed by the IEA and IPCC, directly extracts CO2 from the atmosphere, offering a key solution in the transition to net-zero energy systems. Notably, this marks Climeworks' inaugural agreements with airline companies. This marks Climeworks' first agreement with airline companies, with SWISS' commitment to achieving a neutral CO2 balance by 2050. The agreement extends until 2030, with provisions for additional carbon removal volumes in the future.

Voices from this week

??Catarina Vieira, EU Policy Advisor at Solidaridad Network, argues that while CS3D isn't a cure-all, it's a crucial step toward encouraging companies to take responsibility for human rights within their supply chains. She further emphasizes the Directive's potential to improve the lives of women working in garment production industries.

??Luke Purdy, Director of Sustainability at Wieden + Kennedy, discusses the limitations of the recently passed US climate disclosure rules. He points out that excluding Scope 3 emissions limits the effectiveness of measuring a company's full environmental impact.

??Auret Van Heerden, Founder & CEO at Equiception, shares the compromise text on CS3D released by the Belgian Presidency that raises company size thresholds, narrows the scope of required actions, and introduces a phased implementation timeline.

??Heidi Hautala, Member of the European Parliament, highlights that CS3D will ensure responsible business practices by EU companies involved in rebuilding Ukraine. This will protect vulnerable people and the environment during reconstruction.

??Maria Pia Bianchetti, Programme Specialist of Child Rights and Business at UNICEF, underscores the importance of CS3D in protecting children's rights in global supply chains.

Enjoy our content? Share your thoughts and ideas for future editions of The CS3D Digest in the comments.

Don't forget to subscribe for the latest updates. Thanks for reading, and we will see you next time!

About us:

Ripple Research works with policymakers, researchers, businesses, and philanthropies to build resilient societies. We apply large-scale behavioral and cultural insights uncovered through big data analysis and machine learning to design solutions for impact-driven organizations. Our contributions have earned recognition from international global media outlets, including The New York Times, POLITICO, Vox, Fast Company, and Forbes.

If you're a business, non-profit, academic institution, or mission-driven organization embracing corporate sustainability as a focus, we're open to exploring collaborative opportunities. To learn how Ripple Research can contribute to your mission and impact, please get in touch.