The Edge Round-Up

In this month's round-up, we cover important legislative updates that will affect businesses in Australia and around the world. With major changes on the way, it's crucial for organisations to stay updated and prepared.

A note from Alison Rowe

Edge Impact's CEO

As we navigate a rapidly evolving regulatory landscape, staying informed and proactive is crucial.?

The Corporate Sustainability Due Diligence Directive (CSDDD) and the Nature Positive Plan introduce new responsibilities for corporate accountability and environmental care. These changes bring both challenges and opportunities. Compliance will require diligence and adaptation, but it also allows us to lead by example and integrate sustainability more deeply into our business practices.

By staying ahead of these developments, we can ensure we not only meet new regulatory standards but also drive meaningful impact in our work and the broader community.??

Warm Regards,

Alison Rowe

??News

Human Rights and Modern Slavery Updates?

The Corporate Sustainability Due Diligence Directive (CSDDD): Key Insights for Australian businesses?

The EU's Corporate Sustainability Due Diligence Directive (CSDDD) was formally adopted, published in the EU’s Official Journal on July 5, 2024, EU member states will have to transpose the CSDDD into national law within 2 years, i.e. by 26 July 2026.

This directive represents one of the most significant corporate responsibility reforms in recent years and may impact many Australian businesses.

The CSDDD introduces the obligation for in scope companies to conduct appropriate human rights and environmental due diligence with respect to their operations, operations of their subsidiaries, and operations of their business partners in companies’ chains of activities.?

Australian businesses may be impacted in one of three ways:?

• by being directly in scope, (In Scope Entity);?

• by being majority owned by an In Scope Entity; or?

• by supplying goods or services to an In Scope Entity or their subsidiary.?

The path towards mandatory due diligence is evolving, and the CSDDD represents a clear model that Australian businesses should closely monitor.?

Given the directive’s recent introduction, many large European companies have yet to fully establish their responses. They will first need to understand their risks and prioritise them – it is likely some of this context will already be in their existing public disclosures.

As a key supplier, understanding your relationship to their risk profile and priorities will help you stay aligned with their expectations. Take the initiative to start the conversation and understand their current and evolving expectations. - Nick Dexter, Principal Consultant, Human Rights?

What are the effects on business partners??

An important consideration is how the CSDDD’s requirements may impact Australian businesses working with In Scope Entities. While this requirement is new, due diligence as a discipline is not. Businesses engaging with in-scope entities can expect to be impacted in the following ways:?

1. Receive updated Supplier Codes of Conduct and seek contractual assurances of compliance.?
2. Receive requests to verify compliance with the Code of Conduct.?
3. Receive requests for information to map supply chains and understand impacts at a granular level.?
4. Receive requests to support capacity-building, risk identification, and mitigation initiatives deep in the supply chain.?
5. Engage in more frequent dialogue on risks and risk management within the supply chain.?

If these activities sound familiar, it indicates that you likely have approaches in place that can be reinforced. Now is a great time to consider how you will communicate your approaches with confidence to your customers. If not, and you have large European customers, now might be the time to consider getting support on your human rights governance processes, starting with a risk assessment.?

Beyond Compliance: Opportunity and Learning?

“This isn’t just a compliance issue; it's also an opportunity. The law doesn’t care if an in scope entity is your customer or your supplier – but you should. Your large European-based suppliers will be mapping their supply chains to understand and mitigate risks. Seek opportunities to use their data to inform your own due diligence processes to benefit from their approaches” - Nick Dexter, Edge Impact Principal Consultant, Human Rights?

To learn more about how this directive might impact your business, contact Nick Dexter.?

?? [email protected]?

?? +61481223266?

Nature Positive Plan – Recent Progress?

The Federal Government has progressed 'Stage 2' of its Nature Positive Plan, with proposed new laws passing in the House of Representatives on 4 July 2024.?

Key takeaways:?

• The proposed new laws establish a new Federal environmental regulator to oversee compliance and enforcement action, and to make various assessment and approval decisions.?

• This has been coupled with a suite of proposed new compliance and enforcement tools and tougher penalties, which will put environmental offences on par with financial crime.?

• A new statutory function, known as Environment Information Australia, is also proposed to be created, which aims to provide high-quality environmental information to underpin policy, projects, investment and regulatory decision-making.?

Although no timeframe has been provided for the Stage 3 process, all Australian organisations should proactively work to understand their relationship with nature. This involves managing their nature-related risks and exploring opportunities to enhance nature within their supply chains or through the Nature Repair Market.

Establishing the business case for nature should start now, demonstrating the value of taking action and preparing for impending disclosure requirements. By doing so, you can navigate the evolving regulatory landscape, manage risk and discover opportunities while contributing to the restoration of nature.?

NSW plan for nature?

The NSW Government has recently released its response to the statutory reviews of the Biodiversity Conservation Act 2016 and the native vegetation provisions of the Local Land Services Act 2013.?

The response signals a shift in the way the state fulfills its responsibilities to protect the environment and manage native vegetation across the state, now and into the future.?

However, the response has faced widespread criticism. Many argue that while it acknowledges the biodiversity crisis, it does not adequately address the threats posed by major coal and gas projects.?

Sarah Day, Edge Impact’s Principal Consultant for Nature, offers her perspective:?

"Last week, Penny Sharpe acknowledged that 'biodiversity in NSW is in crisis' following a review of the? State's nature laws. This week, we learned that the cost of repairing Australia's natural environment is estimated at just $7.3 billion annually (Wentworth Group of Concerned Scientists).??

However, current funding levels are akin to 'throwing tiny cups of water at a burning building.' We hope to see this change as we approach October's Global Nature Positive Summit and look forward to more substantial actions."?

Want to learn more? We support companies in understanding the upcoming Nature Repair Market and what opportunities might exist in the Nature Positive Plan.??

Contact Sarah Day for guidance today:?

?? [email protected]?

?? +61 423 937 065?

Sustainability Disclosure Policy Updates - July??

Global Progress: More than 20 jurisdictions, accounting for nearly 55% of global GDP and over 40% of global market capitalisation, are moving toward the introduction of ISSB Standards into their regulatory frameworks.?

Australia's Key Updates on ISSB Standards Adoption?

• The Australian Accounting Standards Board (AASB) released draft Australian Sustainability Reporting Standards (ASRS)1 and 2 for public consultation.?

• The outcomes of the consultation included a first disclosure year for reporting periods starting after 1 January 2025.?

• The ASRS are set to be implemented through the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Bill 2024.?

• The legislation was passed through the House of Representatives with no amendments.?

• The legislation is currently going through the senate for its second reading, where amendments have been proposed.?

You can track the progress of the legislation here.?

Climate Transition Plans?

ASRS progress has clarified many reporting elements, but uncertainties remain on the requirements of a transition plan, with the Australian market calling out for further guidance beyond what's specified in the standard.?

Our latest article provides an update on the developments for transition plans in Australia, which begins to bring some clarity to this area of climate disclosure.?

Read it here.?

How to Prepare?

The Australian Sustainability Reporting Standards have led many advisory firms to claim expertise in climate disclosure. However, few provide the proven experience in climate risk assessment needed to deliver real value, resulting in potential non-compliance and wasted resources.?

Working with specialists like Edge Impact ensures evidence-based outputs that meet stakeholder needs. Our readiness assessment identifies which standards—ISSB, CRSD, or ASRS—are relevant for your business.?

Download our ASRS Readiness Assessment Guide today.?

Contact Mark Siebentritt for guidance today:?

?? [email protected]

?? +6141 860 3015

ACCC consulting on guide to sustainability collaborations?

The ACCC has published a draft guide on sustainability collaborations and Australian competition law.?

The draft guide is designed to help businesses understand the competition law risks that may arise when contemplating working together to achieve positive environmental outcomes. The draft guide also explains how ACCC authorisation may be available to facilitate these agreements even if there are potential competition concerns.?

?“As Australia transforms to a more sustainable economy, there will be instances where businesses seek to work together to achieve better environmental outcomes.”??~ ACCC Acting Chair Mick Keogh

Read more here.?

Our Latest Work?

We're excited to share our latest case study in collaboration with UNSW and Sustainability Advantage, the NSW Government's leading business support program.?

In this project, we set out to unpack the nature-related impacts and dependencies within UNSW's supply chain. Together, we identified strategic actions for the next three years to reduce impact and exposure to nature-related risk in purchasing decisions.?

Explore the challenges faced, our strategic approach and the impactful results that have shaped UNSW's three-year action roadmap.?

?? Read the full case study here.?

Reflections from NAIDOC Week?

At Edge, we know that we are just at the beginning of our Reconciliation journey, and opening this dialogue is important to us.?

Internally, we have been focusing our efforts on planning how to engage authentically and drive impactful change by integrating First Nations thinking into our strategies and operations.??

We are also proud of our team, who drive these conversations and recognise the importance and necessity of Indigenous knowledge for nature protection and restoration, not only in Australia but across the globe.??

Fuelled mostly by our genuine passion, but also forming part of our ongoing commitment, our teams in Eora (Sydney) and Naarm (Melbourne) attended several #NAIDOC Week events.??

We share their reflections and learnings in the article below.

Read the article here.?

?? Upcoming Events:

• Maximising procurement impact: strategies for integrating ESG principles Masterclass, 8 August 2024, Sydney?

Led by Tanya Harris and Sebastian Salcedo Velasquez , this comprehensive 1-day Masterclass will help participants delve into the intricate landscape of ESG procurement, master how to build a business case for incorporating ESG into procurement functions, and then effectively action that business case to drive exceptional results to the reputational, environmental, and bottom-line of your organisation.?

Get Tickets here.?

• Building Product Leaders Forum August 21, 2024, Sydney

Australian EPDs for building products?

Presented by Jonas Bengtsson and Pasindu Samarakkody , they will provide an overview, implications of recent changes to the Australasian EPD guidelines, what to look for in comparing EPDs from different suppliers, what changes are coming in future, the differences between EPD schemes from different countries and how that may impact EPD usage.?

Get tickets here.?

• SIM-PAC Live South Australia

24-25 September, Mawson Lakes

SIM-PAC Live helps accelerate the transition to sustainable industrial manufacturing, by connecting the people ready to do something, with the something. Mark Siebentritt Edge Impact's Global Practice Lead for Climate will present on preparing business for climate change reporting and export compliance.

Explore the conference programme here.

?? Connect with Us

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