The CS3D Digest #9

Welcome to the ninth 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.

You can read our previous editions to catch up, and remember to subscribe!

In today's roundup, we look at the Starbucks lawsuit on ethical sourcing, EU Court's ruling in the Dyson case, EU waste ban's impact on the recycling industry, revised sustainability reporting proposals from UK real estate associations, and the finance sector's approach to handling Scope 3 emissions.

Let's dive in!

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. Starbucks faces lawsuit over ethical sourcing claims?

The National Consumers League (NCL) has filed a lawsuit against Starbucks, alleging the coffee giant's "100% ethical sourcing" advertising claims are deceptive and misleading. The U.S.-based advocacy group cites media reports and investigations uncovering forced labor and sexual abuse on plantations that supply to Starbucks. The company has denied knowledge of specific incidents, emphasizing adherence to fair working conditions and zero tolerance for child labor. The outcome of the lawsuit remains uncertain, but the case underscores the need for more transparency and accountability across tea and coffee supply chains.?

2. EU Court rules against Dyson in energy label row

The European Court of Justice (ECJ) has rejected Dyson's claim for €176 million in compensation from the EU Commission over energy labeling rules. The dispute centered on testing methods that Dyson claimed favored vacuum cleaners with bags over its bagless technology. The company argued that the tests, conducted with empty bags, did not reflect real-world usage and allowed rivals to exploit loopholes to inflate energy efficiency ratings. The Commission has since initiated a process to develop new energy labeling rules for vacuum cleaners, incorporating improved testing methods that better reflect actual usage.

3. EU plastic waste export ban threatens recycling industry

The EU's recent decision to halt plastic waste exports has raised concerns about a potential collapse of the plastic collection and recycling market. Industry players are struggling to manage a surge in domestic plastic waste amidst limited processing capacity and a lack of strong incentives for using recycled materials. This unforeseen consequence of the ban threatens to undermine progress towards the EU's ambitious circular economy goals. Industry associations like Valipac have called for mandatory recycled content targets and investments in EU-recycling infrastructure to ease the transition.?

4. Financial firms under fire as Scope 3 emissions reporting heats up

The EU's new Corporate Sustainability Reporting Directive (CSRD) requires companies to report Scope 3 emissions, and the UK government is considering including it in its Streamlined Energy and Carbon Reporting framework. With Scope 3 emissions disclosure becoming a regulatory requirement, many financial services firms continue to grapple with complex reporting provisions while navigating greenwashing concerns. Despite challenges, there is a growing focus on embracing data-driven transparency, forging strong supplier partnerships, and taking targeted action across the value chain to achieve net zero goals.

5. UK Real estate associations update ESG metrics for sustainability reporting

Real estate industry associations in the UK have revised their recommendations for ESG metrics for clearer and more consistent sustainability reporting. Building on their earlier calls for tailored metrics and product labels, the updated proposals align with the Financial Conduct Authority's (FCA) recently outlined plans for the Sustainability Disclosure Requirements (SDR) regime. The revised ESG metrics are designed to assess the actual performance of real estate portfolios in terms of both environmental and social impact, helping policymakers develop quantifiable standards for ESG compliance and labeling.

Our impact:

?? In partnership with Changing Markets Foundation, we analyzed misinformation surrounding the 2022-23 Dutch Farmers' Protests against the national nitrogen policy. Our study revealed the influence of misleading far-right narratives on these protests, shedding light on how public opinion and policy decisions are shaped in the environmental and agricultural sectors.

Since the release of this report, Geert Wilders' far-right Party for Freedom (PVV) has won the Dutch parliamentary elections. This victory underscores the tangible threat misinformation poses to the democratic process. It distorts public perception with voters making decisions based on false or misleading information. It contributes to societal divisions by spreading polarizing narratives, hindering constructive dialogue, and eroding trust in government institutions. Deploying proactive measures to counter misinformation is crucial for transparent governance and a well-informed electorate.

Voices from this week

??Neil J. Campbell, ICAEW Council Member, emphasizes the urgency for business advisors working with SME clients to prioritize ESG considerations. The urgency is fueled by the implementation of regulations like IFRS S1/S2, EU CSRD, EU CS3D, CBAM, TPT, Modern Slavery Act, and EPR that focus on supply chains.

??Amanda Koefoed, ESG Manager at ESG Implementation , notes that 57% of CSRD data points are qualitative or descriptive, highlighting the prevalence of narrative information in ESG reporting.

??Tim Mohin, Partner and Director at 波士顿谘询公司 , explains that CS3D will result in the integration of environmental and human rights considerations into company processes for enhanced value creation.

??Marie-Josée Privyk, ESG subject-matter expert and advisor, provides a comprehensive update on various ESG-related developments, including the European Financial Reporting Advisory Group's (EFRAG) draft guidance for ESRS implementation and IFAC's call for integrated internal control in sustainability reporting.

??Vali Marszalek, ESG Director for 玛泽咨询 Adria Region, talks about a recent Mazars workshop in Brussels focused on CSRD assurance, double materiality assessment, ESRS gap analysis, and the upcoming CS3D.

??Angela McClellan, Director of Sustainable Finance at 普华永道 , delves into the implications of the circular economy on sectors like finance, insurance, and construction.

??Institutional Investors Group on Climate Change (IIGCC) recounts the many positives of CS3D implementation, including the robust provisions for companies aligning with a 1.5C world. They express some reservations related to the financial sector's limited role but maintain overall optimism.

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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.