ESG Alerts Roundup: Oct 17, 2024
Originally Published at https://sparq360.com/esg-alerts-roundup-oct-17-2024/
This edition features updates on new legislation in Australia and California, a deferral of the EUDR implementation, and the end of the transition period for CBAM, along with other things we are watching. Sign up at sparq360.com/esg-alerts to ensure you get timely updates on these items and more.
Table of Contents
In The News
Things Worth Watching
Other Notes
Upcoming Events
In The News
Australia Passes New Climate Legislation.
Australia recently passed two landmark pieces of legislation. The first creates a mandatory climate reporting requirement starting in 2025 and the second establishes the Net Zero Economy Authority. The reporting requirements are phased over three years based on employee headcount, revenue, and total assets with scope 3 requirements also being phased in over time. Find out more: https://sparq360.com/new-climate-legislation-passed-in-australia-what-you-need-to-know/
EUDR is Delayed for One Year.
With pressure from 20 of 27 of its member states, the EU deforestation regulation (EUDR) has been delayed for 12 months. This regulation aims to require companies importing soy, beef, coffee, cocoa, palm oil, timber, rubber and similar products to “prove their supply chains did not contribute to the destruction of the world’s forests.” With the delay, the regulation implementation would begin Dec 30, 2025. Find out more: https://www.reuters.com/world/europe/eu-proposes-12-month-delay-deforestation-regulation-2024-10-02/
California Climate Law Advances
California Governor Gavin Newsom signed a climate disclosure bill requiring large companies doing business in California to report their greenhouse gas emissions and climate-related financial risks starting in 2026. The law applies to companies with revenues over $1 billion for emissions reporting and over $500 million for risk disclosure. The bill includes amendments, such as relaxed Scope 3 reporting timelines and consolidated reporting for parent companies. The California Air Resources Board (CARB) has until mid-2025 to finalize regulations, maintaining the 2026 start date. Find out more: https://www.esgtoday.com/california-governor-signs-climate-disclosure-bill-into-law-with-2026-start-date-intact/
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Things Worth Watching
EU Importing Companies Must Now Report for CBAM (Q3 2024).
As of October 2024, companies importing goods into the European Union must comply with the Carbon Border Adjustment Mechanism (CBAM) reporting requirements based on actual carbon emission data. This change marks a significant transition from previous allowances that permitted the use of default emissions factors. Importers are now required to gather embedded emissions data directly from their suppliers, which has proven challenging due to suppliers’ unfamiliarity with CBAM regulations and their reluctance to share necessary information. The first reporting period under these stricter requirements will be for Q3 2024, with submission deadlines set for October 31, 2024.
More than Half of Companies are Missing their ESG targets
Many studies show that over half of companies are missing their environmental, social, and governance (ESG) targets. A Bain & Company report reveals that many executives struggle with balancing short-term financial goals with long-term sustainability efforts, and companies face difficulty aligning their ESG objectives with operational realities. Additionally, IBM’s study highlights that although 95% of executives say they have ESG strategies, only 10% report significant progress toward their goals. Key barriers include data management issues and inconsistent standards, which hinder their ability to meet both internal expectations and consumer demand for greater transparency.
CSRD Reporting Structure has been Published (XBRL format)
The Corporate Sustainability Reporting Directive (CSRD) has recently published its reporting structure in XBRL (Extensible Business Reporting Language) format, designed to enhance sustainability data’s digitalization. This XBRL taxonomy will facilitate the electronic tagging of sustainability reports for companies subject to the CSRD, allowing for improved accessibility and comparability of sustainability information. This move aims to streamline reporting processes and ensure that sustainability disclosures meet the new comprehensive guidelines outlined in the European Sustainability Reporting Standards (ESRS). The adoption of the XBRL format is a significant step towards increasing transparency and consistency in ESG reporting across Europe.
Other Notes
SPARQ360’s Evan Junker and Tjeerd de Jong were featured on a recent Supply Chain Now episode with host Scott Luton. They discussed the keys to structuring a successful sustainability program and how integration with supply chain optimization can not only reduce cost but turn sustainability initiatives into net cost-savers. View the video Here: https://streamyard.com/watch/yxtduZAuKrha
Appalachian State University and SPARQ360 recently released the results of their survey of supply chain professionals. Featured in Supply Chain Dive and on Supply Chain Now, the study can be downloaded at sparq360.com/trendsandattitudes
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