LEGAL VIEW SFMI LAUNCH SCOPE 3
6 JULY 2022
MANUFACTURING OFF
COURSE TO MEET NET
ZERO TARGETS
New survey findings
from buildings
analytics specialists,
CIM, are painting a
worrying picture of
the manufacturing
industry’s transition
to net zero.
This follows a
leading industry
thinktank imploring
the Government to provide more support to the sector to help
reduce emissions. A er modelling data from the O ice for National
Statistics, the Manufacturing Technology Centre (MTC) has warned
that without state support the sector will be emitting 5,000 tonnes
of carbon dioxide annually by 2050 and not hit net zero until 2147.
The organisation’s subsequent plea for more funding to improve
energy resilience and sustainability has become even more urgent
following the findings by CIM, who interviewed 100 facilities
managers at hi-tech tier 1 UK manufacturers for it’s the Energy
Blind Spots report. The results found that while 81 per cent of
respondents classed their sites as energy e icient, less than a
third admitted to continually monitoring their facility’s carbon
emissions.
Paul Walsh, General Manager at CIM commented: “The
manufacturing sector is notoriously energy-intensive, so the MTC’s
warnings could not have come soon enough, especially in light of
our own survey’s findings. What this data combined clearly shows
is a fundamental disconnect between what is currently happening
both within manufacturing plants and in the wider sector, and
what is required.”
View The Energy Blind Spots report here https://bit.ly/3agyah9
WHAT DOES THE EU’S PROPOSAL
ON SUPPLY CHAIN DUE DILIGENCE
MEAN FOR BUSINESSES?
Jessica McGoverne, Director of Policy and Corporate
Aff airs at Sedex
In February, the European Commission set out draft legislation with new
rules that will require some companies operating in the European Union
(EU) to conduct social and environmental due diligence in their supply
chains. Companies in the scope of these rules will have to identify risks
to people and the environment, prevent negative impacts in their supply
chains and operations, provide remedy where necessary, and report on their
progress.
Known as the “Corporate Sustainability Reporting Directive” and “corporate
sustainability due diligence”, these rules aim to create a level playing fi eld for
EU companies in order to protect the people and the environment in global
supply chains.
Although a welcome step forward, the current draft for this legislation
is quite confusing and it may be diffi cult for businesses to determine what
actions they will need to take. To prepare for the legislation being introduced
across Europe, companies need to understand the requirements in the current
draft, what their business must do and how they already comply, and identify
any gaps they need to address.
Companies aff ected by the new rules fall into two groups:
• EU companies with more than 500 employees that generate a turnover
greater than EUR 150 million, and non-EU companies that generate a
turnover greater than EUR 150 million in the EU each year.
• EU companies with more than 250 employees that generate a turnover of
more than EUR 40 million, and non-EU companies that generated a turnover
between EUR 40 million – EUR 150 million in the EU in the last fi nancial
year, operating in high risk sectors such textiles and leather manufacturing,
agriculture, forestry, fi sheries, minerals and mining.
Based on the current draft, companies will have to take a number of steps to
comply with this legislation. These include integrating responsible business
activities into their policies and processes.
First, companies should establish whether they come under the scope
of the legislation. Businesses can also consider which of their suppliers
will be covered by the legislation, and approach these suppliers to work
collaboratively on strategies to address signifi cant social and environmental
risks aff ecting both parties.
Secondly, businesses should start mapping their supply chains to a greater
level of detail through each supplier tier. This will create greater visibility of
their own and suppliers’ operations and help with understanding the risks
to workers and the environment. Companies can contact suppliers from now
to prepare them for related requests, and to ask them to begin collecting any
additional data.
Ultimately, companies covered by the legislation will be legally responsible
for respecting the environment and workers’ rights in their supply
chains. This includes addressing issues such as child or forced labour, and
discrimination. Companies of a certain size will also have to adopt a plan
to ensure that their business strategy is compatible with limiting global
warming to 1.5°C, in line with the Paris Agreement.
One area the current draft legislation will need to be clearer on is how it will
protect workers. At the moment, only businesses that in-scope companies
have lasting relationships with are included for due diligence activities. This
means that factors such as temporary contracts or seasonal suppliers, that
lead to high risks, could be excluded - creating a loophole in the legislation.
These factors represent some of the most at-risk workers and hinder
the detection of issues. If these companies, contracts and workers are
not included in these new rules, they may fall through the gaps - risking
continued damage to workers and the environment.
Once the legislation is adopted at EU-level, the 27 Member States will have
two years to implement the legislative directive into national law. Some EU
countries have already created their own legislation in anticipation of this,
including Germany (Supply Chain Due Diligence Act) and The Netherlands
(Child Labour Due Diligence Act).
In short, the EU’s proposal is an additional reason for businesses to source
responsibly. Doing so doesn’t just help companies comply with legislation
- sourcing responsibly and meeting wider ESG (environmental, social
and governance) requirements are increasingly important for investors,
consumers and business partners, and help companies to build essential longterm
resilience in their operations and supply chains.
STANDARD FOR FM
The Sustainable Facilities Management Index (SFMI) and BAM FM
have o icially launched the full open-source guidance for both
FM Providers and in-house FM team to measure and engage on
business carbon emissions.
SFMI and BAM FM, who
announced their partnership last
year to drive a decarbonisation
standard in FM services have
joined forces with an expert
industry peer group of businesses
to develop a standardised
approach to calculate carbon
emissions for the sector.
This project is the first stage of a wider vision where FM will position
itself as a key partner in delivering zero-carbon solutions in the built
environment. The FM industry needs to build a data set to understand
what the true impacts of its emissions are for its customers. This can
then be used to promote greenhouse gas (GHG) management in the
operational stage of the building lifecycle, thereby promoting FM as a
solution for zero-carbon buildings in the future. The vision aims to create a
measurement tool for the sector, develop FM service level emission factors
based on real-life data for more accurate reporting, and build a sectoral
decarbonisation pathway.
To download ‘Scope 3 emissions in FM: Setting the foundations for net
zero’ visit https://www.acclaro-advisory.com/sfmi/scope-3-emissions-fm/
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