SLCP&ESG | SLCP is a key player in the ESG field

In the constantly changing regulatory environment, the surge in legislation highlights the demand for reliable social and labor data among supply chain workers. Today, the editor takes you through the legislative development of ESG reports in the European Union,the United States, the United Kingdom, and Australia, exploring the important role of SLCP tools in providing reliable and actionable social and labor data in this field as a reporting source.

01. European Union

The EU Corporate Sustainability Reporting Directive (CSRD) came into effect in January 2023. This directive is a significant advancement in the Non Financial Reporting Directive (NFRD), expanding its coverage to more companies and expanding the scope of mandatory disclosure. Although CSRD is currently only applicable to companies registered in the European Union, it is expected to expand. Starting from 2028, non EU companies with significant business operations in the EU must report globally. By forcing companies to disclose information on a wide range of topics such as human rights, environmentalimpacts, working conditions, and climate change, CSRD ensures a comprehensive and transparent overview of its sustainable development plans.

02. UK

The UK government has always been actively addressing social issues in the workplace, particularly through the 2015 Modern Slavery Act (MSA). The legislation requires companies with annual revenue exceeding £ 36 million to disclose annually the measures taken to eliminate modern slavery in their operations and supply chains. This bill has global influence, extending its jurisdiction beyond national borders to include companies operating in any region of the UK, regardless of their registered location, as long as they meet the specified turnover threshold.

03. Australia

Similar to the UK, Australia's 2018 Modern Slavery Act requires significant commitmentsto corporate transparency and responsibility. This legislation requires entities operatingwithin Australia and generating collective income exceeding AUD 100 million to produce and submit annual reports. These documents provide a comprehensive overview of modern slavery risks in local and global operations and supply chains, as well as detailed information on measures taken to mitigate these risks. By doing so, not only did it comply with legal requirements, but it also cultivated a culture of moral responsibility and supply chain transparency, demonstrating Australia's commitment to eliminating modern slavery in business practices.

04. United States

In March 2021, amidst political fragmentation, the US Securities and Exchange Commission (SEC) took a bold step by establishing a dedicated climate and ESG working group.

California is at the forefront of ESG legislation in the United States, with the state legislature recently passing the Climate Enterprise Data Responsibility Act (SB 253) in September 2023. The Supply Chain Transparency Act (SB 657) is another noteworthy legislation in California that addresses the global challenges of slavery and human trafficking.

The state of New York is advancing the proposed Fashion Sustainability and Social Responsibility Act (FSSAA), marking a broad approach for the fashion industry to address sustainability and social responsibility issues.

These collective efforts at the federal and state levels reflect the increasing commitmentof the United States to strengthen regulation and oversight of ESG affairs. As these measures develop, they are expected to play a crucial role in shaping corporate practices and cultivating a more sustainable and responsible business environment.

Reliable and actionable data is key

The global shift towards mandatory ESG reporting marks an important step in recognizing the importance of addressing human rights, environmental, and ethical governance risks in business operations. The evolution of regulatory frameworks and corporate strategies highlights the urgent need for transparency and accountability.

Reliable and actionable data is the core of trustworthy ESG reporting, and it is crucial for companies to disclose their environmental and social impacts. However, the complexity of data collection and analysis poses challenges. Here, the Fusion Assessment Framework (CAF) of SLCP can become a solution. Numerous stakeholders, including brands, manufacturers, civil society organizations, and audit firms, believe that CAF's data is trustworthy. They provide standardized data and simplified processes, which not only help comply with regulations but also facilitate effective decision-making for responsible business practices.

With the continuous development of regulations and expectations related to sustainable development, tools such as ESG reporting and the Integrated Assessment Framework (CAF) utilizing SLCP have become crucial for businesses to thrive in an era of increasing sustainability and accountability.