Operating in a more sustainable way is a challenge, but there is no alternative. The ‘green trend’ has now arrived in the retail and consumer goods industries. It is essential to find an efficient solution as quickly as possible to monitor and ensure compliance with ESG criteria within your own company and throughout the entire supply chain. This is where SYNESGY comes into play - CRIF's solution for an optimised and transparent sustainability profile.
Europe has set itself a major goal: to become the first climate-neutral continent by 2050. This is set out in the European Green Deal, to which we have all committed.
In the future, every retailer will have to live up to their sustainable and social responsibility. Together with manufacturers, they face the challenge of integrating these demands and legal requirements into their business activities. One of the most demanding tasks in this industry is to reconcile sustainability and competitiveness.
Making the entire supply chain transparent and measurable in terms of sustainability is one of the key goals of EU and regulatory climate policy.
The pressure on companies is growing, and on 1 January 2023, the Supply Chain Due Diligence Act (LkSG) will come into force. It is therefore essential for German companies to create the conditions for compliance-oriented implementation as quickly as possible and ensure compliance along their entire supply chain.
End consumers are also driving the shift towards greater sustainability, as they are increasingly prioritising this when purchasing products. In particular, environmental awareness has increased significantly in the area of online shopping. According to information from PwC, interest in sustainability and fair trade has increased significantly in the past five years[1]. Not least, Generation Z is a strong driver. Today, they are between 18 and 25 years old and thus increasingly relevant for trade. Surveys have shown that Gen Z pays attention to sustainability, quality and price when shopping. However, the most important point for retailers is that young people are willing to pay a premium for products that meet sustainability criteria.[2] Similarly, consumers are paying more attention to the origin of products.
At this point, NGOs should not be forgotten either, as they play one of the most important roles in educating consumers. They highlight abuses in the area of working conditions and shed light on the environmental impacts of consumption of everyday products such as chocolate, T-shirts and cosmetics.
In addition to consumers and the German government, as well as EU legislators, the stakeholders of the respective company are also increasingly demanding that clear sustainability standards be defined, adhered to and monitored.
This means that banks will classify companies according to ESG criteria and companies will have to evaluate their supply chains accordingly.
If everyone does this for themselves, the effort is enormous. If we do it together – each disclosing their criteria and allowing the others to access it – we enable an efficient and fast solution.
With the aforementioned supply chain due diligence law, companies are increasingly faced with documentation and transparency issues. This is a challenge that needs to be solved effectively, transparently and clearly.
The guidelines of the German government require companies to be fully transparent about their sustainability efforts. The green transformation is being significantly accelerated by the new rules and regulations. This is because companies and the financial sector are to play a central role in the fight against climate change and will change it sustainably.
For large corporations, ESG-compliant action is already a reality, but the topic of ESG is also becoming increasingly important for small and medium-sized companies. The European Union is also increasing the pressure on the financial sector, primarily on banks, to encourage the economy to change for greater sustainability by introducing new requirements.
Whether or not a company is granted a loan will in future increasingly depend on how sustainably the company operates, on its ESG score.
However, this challenge also offers a clear advantage:
If ESG criteria are observed and integrated into a company and its activities, it can benefit from attractive financing conditions and a better reputation among consumers with a positive ESG score.
Since the topic of sustainability has become established in the public consciousness, in the thinking and actions of consumers, it can lead to a retailer gaining or losing customers.
It is of the utmost importance to comply with the legal basis for ESG-compliant business practices. Only in this way can a sustainable impact be achieved that brings us closer to our climate goals. A holistic approach is a key factor in implementing this, and it must be thought of collectively. One person alone can only have a limited impact on the situation as a whole.
Each company on its own would face an enormous administrative burden in collecting and managing each company's ESG data, which could lead to project failure. Useful tools for measuring ESG criteria, for example, are an aid for companies.
The CRIF Group has developed a globally networked solution that has already been introduced in several countries. This is based on a platform and makes it possible to evaluate companies easily and in accordance with the rules according to ESG criteria and to make this information accessible. CRIF offers the Synesgy solution.
Synesgy is the first global network to develop and offer digital solutions for measuring and evaluating sustainability in companies.
The CRIF Synesgy portal is part of this network and offers a quick and easy way to create transparency in your own supply chain. ‘Our portal offers an option for companies all over the world to document their own measures for achieving ESG goals through an independent body,’ explains Dr. Frank Schlein, CEO of CRIF Germany. ‘An ESG certificate makes suppliers attractive business partners – and for the client companies, it is possible to prove not only their own commitment but also the ESG compatibility of the supply chain. Thanks to the fully digitised process, the administrative effort involved is kept to a minimum.’
The primary goal is to support the economy's ESG transformation by providing information and establishing a global standard for measuring sustainability.
CRIF has been working intensively on the topic of ESG since 2018 and is part of various EU projects and initiatives. For example, CRIF is leading a project on ESG data collection and analysis for the European Commission and won the G20 TechSprint 2021 with its ‘Climate Risk Analytics Suite’.
After registering for free on the online portal, interested companies will be taken to a questionnaire that is based on the standards of the independent Global Reporting Initiative and meets the new requirements of the LkSG. This questionnaire asks about the company's sustainability measures. As soon as the questionnaire has been completed and submitted, a PDF certificate will be generated.
This shows the overall index and the four individual indices for the sub-disciplines ‘Company’, ‘E’, ‘S’ and ‘G’. The certificate can then be downloaded and shared with anyone interested via a QR code. This way, suppliers can reliably and transparently disclose their sustainability status. The recipients can also use this proactively: after uploading a list of their suppliers to the platform, an automated invitation to participate is sent to the business partners. The completion status of the suppliers can be continuously checked via a status dashboard.
Together with committed companies, CRIF is planning to increase ESG transparency regardless of the industry and make sustainability easier to implement.
It is therefore clear that it will not work without transparent reporting. At the same time, it is not enough to look only at your own company; a due diligence process for the entire value chain that captures sustainability criteria offers the solution.
We would be happy to work with you to assess the benefits for your company. Please feel free to contact Kevin Riwoldt, k.riwoldt@crif.com, either through bevh or directly.
Kevin Riwoldt for CRIF Germany
