Sustainability Xpress – Edition 1/2025
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Welcome to Sustainability Xpress – the IntegrityNext LinkedIn Newsletter
Every month, we’ll deliver the latest top stories in supply chain sustainability straight to your inbox – in bite-sized chunks. We cover key regulatory developments, share valuable resources, and provide expert insights on the topics that matter most.?
Enjoy the read!?
EU Forced Labor Regulation Adopted??
On December 12, 2024, the EU Forced Labor Regulation (EUFLR) was published in the Official Journal of the European Union and entered into force the following day. It will take effect on December 14, 2027. Under the regulation, all products manufactured with forced labor will be prohibited from being placed on, made available in, or exported from the EU market. While the EUFLR does not directly impose new obligations on companies, it effectively requires importers and exporters of in-scope products to conduct thorough due diligence and address forced labor risks in their supply chains.??
EU Deforestation Regulation Postponed?
In late December 2024, the initial application date of the EU Deforestation Regulation (EUDR) was deferred by one year. The rules will now take effect on December 30, 2025, for large and medium-sized operators and traders, and on June 30, 2026, for micro- and small enterprises. Companies should use the delay to establish robust processes for data collection and risk management, assign clear responsibilities, implement a comprehensive due diligence system, and engage with suppliers to ensure full compliance with the legal requirements.??
Survey on the German Supply Chain Act Delivers Valuable Insights??
In January, IntegrityNext published the fourth edition of its study “Two Years of the German Supply Chain Act: Insights, Lessons Learned, and Outlook”. It provides key insights on how more than 100 companies have navigated the requirements of the German law, highlighting major challenges, progress made, impacts on sustainability, and implications for the upcoming CSDDD and future business strategies. One of the many striking findings is that 51% of the companies believe implementing the German Supply Chain Act strengthens sustainability in their supply chains, while 36% remain undecided, and 13% see no benefits.??
What the German Supply Chain Act Teaches Us About the CSDDD?
The study mentioned above found that 80% of the companies surveyed see clear benefits in complying with the German Supply Chain Act (LkSG) in preparation for the CSDDD. At IntegrityNext, we’ve helped hundreds of customers achieve LkSG compliance and gained valuable first-hand insights, ranging from data collection and risk analysis to impact prioritization, action management, and reporting. Our LkSG insights are highly relevant to the upcoming CSDDD, and we’ve summarized key takeaways and recommendations in our latest white paper.??
EFRAG Publishes Voluntary Sustainability Reporting Standard (VSME)?
In December 2024, EFRAG published the voluntary sustainability reporting standard (VSME) for non-listed micro-, small, and medium sized enterprises (SMEs), which don’t fall under the CSRD mandate. The VSME consists of a basic and a comprehensive module and was designed to address the many data requests SMEs receive from business partners – such as banks, investors and large corporations.?It serves as a reference framework for collecting information from value chain actors, helping to ensure that their reporting efforts remain proportionate and manageable.??
U.S. Withdraws from Paris Agreement – State-Level Support for Climate Action??
Shortly after President Trump’s inauguration, he announced the United States’ renewed withdrawal from the Paris Agreement. Additional rollbacks of federal environmental and climate-related legislation are expected. However, there is still strong support for climate action at the state level. For example, 24 U.S. states have reaffirmed their commitment to the goals of the Paris Agreement. Other state-level initiatives include climate disclosure requirements in California (Senate Bills 253 and 261) and planned reporting obligations in New York (Senate Bill S897A).??
Uyghur Forced Labor Prevention Act (UFLPA) – Expanded Entity List?
The U.S. Department of Homeland Security (DHS) has added 37 new businesses to the UFLPA Entity List, bringing the total to 144 entities linked to forced labor practices in Xinjiang, China. The newly flagged companies include globally recognized brands involved in the mining and processing of critical minerals, cotton production, and textile and silicon manufacturing. Meanwhile, reports indicate that thousands of imports into Australia originate from Chinese suppliers blacklisted by the DHS. This underscores the urgent need for companies to thoroughly map and analyze their supply chains and highlights the critical role of the UFLPA Entity List for effective risk management.?
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