The CS3D Digest #41
Ripple Research
Ripple Research works at the intersection of data science, behavior change, and social impact.
Welcome to the 41st 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!
Today's focus: EU's decision to go ahead with EUDR despite protests, Italy's greenwashing investigation against Shein, a new report highlighting labour violations across 75% of global battery supply chains, Hong Kong's new sustainability reporting standards.
What are we reading?
We've employed our proprietary AI tools to curate the most engaging news about CS3D and related regulations. Our focus extends beyond what's trending at the moment to showcase headlines that are fueling meaningful conversations around the world.
The European Union (EU) has announced that it will not delay the implementation of its Deforestation Regulation (EUDR), despite objections from major agricultural-exporting countries such as Brazil, India, Indonesia, and the US. This decision was confirmed during the World Trade Organisation (WTO) committee on agriculture meetings held on September 25 and 26, 2024. The EUDR will officially come into effect on December 30, 2024, requiring exporters of products such as cattle, palm oil, cocoa, coffee, leather, paper, wood, and related goods to prove that these items were not produced on deforested land after December 31, 2020. Large firms are expected to comply with the new rules by December 2024, while small firms have until June 2025.
The Italian Competition Authority (AGCM) has opened an investigation into Infinite Styles Serves Co Limited, the Dublin-based entity managing Shein's website and app, over accusations of "greenwashing." The inquiry is focused on Shein's claims about its eco-friendly practices, particularly concerning the "evoluShein" collection, which allegedly presents misleading information about the sustainability of the brand's products. The AGCM has also flagged inconsistencies between Shein's public commitments to reduce its carbon footprint and actual increases in emissions reported in the company's 2022 and 2023 sustainability reports.
A new report from London-based Infyos reveals that companies accounting for 75% of the global battery market, particularly in the automotive and energy sectors, have been accused of unethical practices within their supply chains. The report points to various violations, including instances of forced labour in lithium refining facilities and young children, some as young as five, being subjected to hazardous conditions while mining cobalt materials. Much of the focus is on upstream operations, such as mining and refining raw materials in regions like the Xinjiang Uyghur Autonomous Region (XUAR) in northwest China. The complexity of global battery supply chains, often involving over 10,000 suppliers, makes it difficult for manufacturers to fully trace and address the risks. This, in turn, makes it challenging for end-users and buyers to ensure that the products they purchase are free from labour law violations. In Europe, the EU Battery Regulation is set to enforce rigorous due diligence across battery supply chains, requiring companies to provide more transparent and detailed information on their sourcing of materials.
The European Commission has initiated infringement procedures against 17 Member States, including Belgium, Germany, Spain, Finland, and the Netherlands, following their failure to fully transpose the Corporate Sustainability Reporting Directive (CSRD) into national law which includes amendments to existing directives related to accounting, transparency, and auditing. The CSRD mandates that large and listed companies disclose critical information regarding their social and environmental risks to empower investors and stakeholders in accurately assessing sustainability performance. The Commission emphasizes that without proper transposition of the CSRD, the necessary harmonization of sustainability reporting within the EU cannot be achieved. The Member States have been granted a two-month window to draft a response in the absence of which the Commission may escalate the matter by issuing a reasoned opinion.
The Hong Kong Institute of Certified Public Accountants (HKICPA) has announced the publication of new exposure drafts proposing sustainability-related and climate-related reporting standards for companies, fully aligned with the International Financial Reporting Standards (IFRS) established by the International Sustainability Standards Board (ISSB). This initiative follows the Hong Kong government's earlier release of its "vision statement on developing a sustainability disclosure ecosystem," which aims to align local sustainability reporting requirements with international standards. The new standards are designed for a range of entities, including listed companies, regulated financial institutions like banks and fund managers, and insurance companies.
Voices from this week
??Ingrid Elbertse, Policy and Advocacy Officer at Fair Wear Foundation , highlights the launch of the EU-helpdesk to support various stakeholders, especially those from production countries, for a successful implementation of CSDDD.
??Paloma Mu?oz Quick, Director of Human Rights Standards at BSR , connects CSDDD to climate action and just transition, emphasizing the need for companies to conduct due diligence across supply chains to reduce the negative impact of their operations on society and the environment.
??Maxine Bichler
, Consultant for Business and Human Rights at L?ning – Human Rights & Responsible Business GmbH , emphasizes the importance of adopting a holistic approach to meet sustainability, transparency, and accountability requirements associated EU regulations such as the CSRD and CSDDD.
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