Insights – S7Clear Immovable Driven

Montreal -The UN Biodiversity Conference creates a plan for the world to protect nature.

S7Clear® — Tue, 10 Jan 2023 11:30:11 +0000

In December of last year, nearly 200 nations gathered in Montreal and agreed on the Global Biodiversity Framework (GBF). The GBF sets a goal for the world to live in harmony with nature by 2050 and includes 23 targets to stop and reverse biodiversity loss by 2030. Although politicians and government officials were focused on finalizing the text, the conference was bustling with discussions, debates, and events. With over 10,000 delegates in attendance, it was truly a global conversation on the importance of protecting nature for future generations.

At this biodiversity COP, it was notable that businesses attended in significant numbers for the first time. It was inspiring to see businesses recognize their role in restoring nature alongside conservation NGOs, youth leaders, and local Indigenous groups. To adequately address the issue of biodiversity loss, a diverse range of stakeholders is needed. The final language in the targets reflects the importance of all stakeholders in achieving the overall goal of living in harmony with nature by 2050.

One standout aspect of the conference was the visibility and ambition of financial institutions. Many examples of private finance and blended funding models were presented in side-events throughout the weeks. This demonstrated that the shift towards nature-positive outcomes, known as “greening finance,” is already happening and can be scaled up with the right governance and frameworks. This achievement is key to mobilizing more investment from the financial sector and providing the necessary means of implementing the overall goals of the GBF.

Understanding the Kunming-Montreal Global Biodiversity Framework

Despite several secondary announcements made at the conference, the Framework itself was the most significant takeaway. It outlines the necessary steps for governments to translate into concrete actions. The framework sets goals and targets that clearly define the work ahead, who needs to be involved, what needs to change, and the types of actions required.

The targets include reversing harmful subsidies for nature (Target 18), additional finance to support transitional change and deliver the goals (Target 19), and two 30×30 targets for degraded ecosystems (Target 2) and effective conservation and management of ecosystems (of particular importance for biodiversity and ecosystem services). Inclusion and a rights-based approach are strongly emphasized across all targets.

The targets are categorized into three groups: reducing threats to biodiversity (Targets 1-8), meeting people’s needs through sustainable use and benefit-sharing (Targets 9-13), and tools and solutions for implementation and mainstreaming (Targets 14-23). These targets will be translated into country-level plans for biodiversity through strategies, policies, and legislation.

Although the specific impacts of each target or the GBF as a whole are not yet clear, the overarching path is evident. The goals include protecting larger areas for nature, restoring degraded ecosystems, shifting finance and subsidies towards nature-positive activities, and increasing scrutiny of businesses’ impact on nature. The implications for businesses will take some time to fully emerge.

A Target for Businesses

The Framework set a target specifically for businesses for the first time, with Target 15 requiring them to assess and disclose their nature-related risks, impacts, and dependencies across the value chain. While not yet a legal requirement, the launch of the Taskforce on Nature-related Financial Disclosures (TNFD) framework is anticipated to lead to several nations mandating nature-related reporting in the coming years, similar to the Task Force On Climate-related Financial Disclosures (TCFD). TNFD is currently co-funded by the UK Government, and at COP15, Germany committed €29 million for its implementation.

There are already commitments in place, such as President Biden’s pledge to protect 30% of the USA’s land and sea, and the European Union’s Corporate Sustainability Reporting Directive (CSRD), which will require disclosure similar to the TNFD.

The final three targets emphasize the need for inclusivity and diversity in protecting and restoring biodiversity, stressing that this will create the best solutions for people and the planet. Without halting biodiversity loss and restoring nature, meeting the social goals of the Sustainable Development Goals will not be possible, and vice versa.

For companies like S7Clear, actions will focus on integrating biodiversity into planning and development processes and environmental assessments (Target 14) and ensuring that large companies and financial institutions regularly monitor, assess, and transparently disclose their nature-related risks, dependencies, and impacts (Target 15).

Success in meeting the 23 targets by 2030 will determine the success of the GBF, and even small steps count towards achieving these goals. For example, the UK Business & Biodiversity Forum’s Nature Positive Pledge allows businesses to commit to becoming nature positive and contributing to the GBF goals. Working together with all stakeholders, including governments, local communities, Indigenous groups, and corporations, will be crucial to achieving these targets and protecting our natural ecosystems.

Empowering Strategic Procurement with Data Insights

S7Clear® — Sun, 06 Feb 2022 03:09:10 +0000

As the world wakes up to social and environmental injustice, a spotlight is shining on global supply chains. Countries around the world are requiring greater transparency in supply chains, across a range of topics, from conflict mineral mining to deforestation regulation.

The burden on supply chain leaders and procurement teams to disclose and report on the values of their suppliers is growing exponentially. The pressure to perform, drive efficiencies, and deliver a competitive advantage is now compounded by administrative overhead to not only ensure supply chains reflect the values of the purchasing organization but also to prove it to third parties.

This can feel like a mountain to summit. For the future of sourcing, we must strap on our boots and get climbing.

Appropriate application of data and analytics will be critical in the successful management of these emerging requirements for procurement teams worldwide. The complexity of global supply chains creates a unique challenge. Fortunately, new technologies and data standardization make this an achievable goal.

Leveraging Prequalification Questionnaires

As procurement companies, we must stop thinking of a Prequalification Questionnaire (PQQ) as just a questionnaire. When we study traditional responses to PQQ questions as data points, we unlock huge value from the content stored in what is traditionally considered an administrative headache.

Digitization of a PQQ is not enough; building structure and intelligence into the design of a questionnaire, and the structure of its responses, enables analytics on a whole new scale. This drives enormous benefit for the procurement organizations facing new reporting strains, as well as for the suppliers sharing the burden.

There are three important elements to an efficient supply chain reporting framework:

Common data standard
Data sharing
Analytics and benchmarking

With these in place, procurement teams can easily extract required figures for annual reporting or legal disclosures. Procurement reporting tools can help teams instantly answer the following types of questions:

How many of my suppliers are SMEs?
How many of my suppliers have a modern slavery policy statement?
What percent of my supply base is operating an internally accredited carbon reduction scheme?

Empowering Procurement to Take the Lead

As a procurement leader, you are probably familiar with requests to report on the supply base. Perhaps you’ve heard something along the lines of, “I’d like to add a figure to the annual report on how many of our suppliers can demonstrate they mine conflict-free.” It seems like a sensible thing to do, but so often leaves a procurement team scrambling to determine which suppliers would be relevant to contact, how to reach them, and how to collect and store the information.

More and more, legislative action includes provisions for not only reporting on individual company practices, but the practices within companies’ supply chains as well, meaning these sorts of requests will only grow with time. By requiring companies to report on the ethics reflected in their supply chains, these pieces of legislation seek to drive out “bad actors” typically lurking at tier three or four of the supply chain.

Conflict Minerals

New EU legislation takes effect January 1, 2021, aimed at restricting the trade of conflict minerals. It requires EU companies to only import tin, tantalum, gold and tungsten from responsible sources. From that same date, EU importers of these products will have to carry out due diligence on their supply chain.

SECR: Streamlined Energy and Carbon Reporting

SECR legislation, which came into force April 1, 2019, requires all large UK companies and large LLPs, as well as all quoted companies, to report on their annual energy use, greenhouse gas emissions and energy efficiency actions they have taken.

Modern Slavery

The UN Universal Declaration of Human Rights protects the rights of workers and individuals. The UK Modern Slavery Act includes a provision for transparency in supply chains and requires large companies to issue a slavery and trafficking statement annually. The statement must set out what steps the organization has taken to ensure there is no slavery in any part of its business, including its supply chains. France and Australia have followed suit with similar legislation while other European countries have legislation in the works.

Deforestation

The UK Government published proposals in August for legislation requiring large UK companies to perform supply chain due diligence and publish information certifying that certain commodities were produced in accordance with local laws pertaining to deforestation.

“This would mean publishing information to show where key commodities, including rubber, soil and palm oil, came from and that they were produced in line with local laws protecting forests,” reported Sky News.

Equality, Diversity, and Inclusion

Several countries have long-standing equality legislation that prevents discrimination based on a range of factors including gender, race or sexual orientation. Focus is now shifting to apply these principles to supply chains and promote diversity through procurement processes.

Driving Value in Your Procurement Team

Carbon accounting, as an example, is rapidly becoming the universal tool for procurement professionals to measure cost effectiveness and drive business performance both internally and within the supply chain.

It is well known that reducing an organization’s carbon footprint can deliver money straight to the bottom line. Organizations that focus on carbon reduction can save millions per annum through an internationally accredited ISO14065 greenhouse gas certification program.

Collection and promotion of the appropriate data regarding emission levels, performance against targets and offsets are critical to measuring the impact carbon accounting throughout the supply chain can have. Streamlined data collection, reporting and sharing tools are key enablers of tomorrow’s sourcing reality.

Common Standard

International standards and responsible sourcing protocols are common reporting frameworks organizations can complete once and share many times. A procurement organization’s willingness to accept and adhere to common standards has the power to dramatically reduce supplier reporting obligations.

Suppliers often feel overburdened by the sheer volume of forms, certifications and audits they must complete. By accepting internationally recognized standard data templates and audit protocols, suppliers can spend less time achieving accreditation and more time on their core business, driving efficiency and increasing productivity.

Standards have traditionally dictated how questions are asked but have put less emphasis on how the responses are collected and stored. It is equally important that responses to standard questionnaires are stored properly so they can be treated as data points to be compared and analysed.

It is not much use accepting a standard of data if that data is not easy to move between platforms and systems. API technology is standard and available with most ERP, P2P and S2P systems. Leveraging this means you can reduce the supplier burden further by taking data from accreditation bodies themselves, rather than requiring a supplier to submit the data separately for each buyer it wants to supply.

Analytics and Benchmarking

With the two previous steps of a common data requirement and standard data sharing in place, procurement teams can easily analyse and draw conclusions from the data. Data science teams can demonstrate strengths and weaknesses of suppliers individually, and as groups or chains aligned to specific products, or by their size, country of trading or other factors. Armed with these tools, procurement organizations can easily extract information required for reporting, such as how many suppliers can demonstrate their raw materials are mined in conflict-free zones.