Traceability Requirements to Future-proof Your Sustainability Claims and Business Compliance
Future Proof Your Sustainability Claims
- From the US to the EU to the Uyghur region of China, sustainability and trade regulations are popping up left and right — affecting businesses worldwide.
- The businesses that will withstand the test of time will be those that are able to meet sustainability and regulatory compliance sooner rather than later.
- We’ve outlined the top requirements you should look for in a traceability solution to back up your sustainability claims and future-proof your business compliance.
Whether you need to comply with the latest sustainability regulation in your country or begin backing your sustainability claims with data, traceability — i.e., the ability to trace and track the data in your value chain from source to shelf — is key. However, not all traceability strategies or solutions are created equal.
We’ve outlined the top traceability requirements you’ll need to capture data and report on your sustainability claims – whether environmental or social. If you have any questions, click the button below to request a call and get more information.
Traceability Requirements for Environmental Claims
From carbon accounting, offsets, and credits, to recycling and circularity, you’ll want to ensure your environmental claims are backed by the following four pieces of data. Those include geo-coordinates of supply chain transactions, evidence-based verification of carbon accounting, environmental baselines, and provenance of recyclable materials.
1. Geo-coordinates of supply chain transactions
No matter your environmental claim, geo-coordinates will be key. To verify the absence of deforestation and track regenerative agriculture practices, you will need the geo-coordinates of the location of the farm (smallholder or otherwise). For carbon offsets and credits, claims tied to the plot of land being conserved or reforested will be required to avoid double counting and prove impact. That includes accurate carbon sequestration baselines and improvements. Geo-coordinates will supply an audit-proof verification method for your environmental claims.
2. Evidence-based environmental baselines
As you get started on any carbon initiatives, evidence-based verification of environmental baselines and rehabilitation of land (particularly relevant to mining operations) will be crucial. This you track and trace your regenerative agriculture and climate efforts in the area over time. Beginning with an accurate, data-driven, and verified baseline will support all future reporting and analyses.
3. Evidence-based carbon accounting
Traceability also provides the evidence you’ll need to back up your carbon accounting and decarbonization claims. The right traceability solution will allow you to gather the primary and secondary data you need to verify:
- Scope 3 emissions, including waste, water, and energy used during production, manufacturing, and transportation across the value chain;
- The impact of measures taken to reduce carbon emissions across the value chain;
- Purchased carbon credits that are unique, adequately managed, and monitored to ensure impact; and
- Accurate carbon sequestration through the other offset programs mentioned above, including reforestation, conservation, and regenerative agriculture.
4. Proof of provenance of recyclable materials
Finally, traceability will allow you to verify the provenance of recyclable materials to validate circular economy claims (e.g., X% of products produced with “ocean-bound” plastic).
As you look to track and prove your circularity, ensuring you can verify where your recyclable materials originated will help make any related sustainability claims as specific, accurate, and compliant as possible.
Traceability Requirements for Social Claims
From ensuring human rights to a living wage to data protection throughout your supply chain, you’ll want to ensure your social claims are backed by the following three pieces of data: verification of payments, verification of social impact metrics, and verification of GDPR-compliant handling of personal data.
1. Verification of payments
A robust traceability solution will allow you to verify payments to farmers, waste collectors, and workers to validate claims of fair labor, living income, and living wage.
It’s not enough to “know” supply chain contributors are potentially getting paid. You’ll want to be able to prove that these payments are made and that they validate any claims of living income and living wage.
2. Evidence-based social impact reporting
The social impact metrics you’ll want to track will depend on regulations either from the source country or the importing country of the final product. A number of national-level regulations require reporting on how companies have assessed, mitigated, or avoided human rights violations throughout their supply chains. See our blog on the major US and EU regulations, as well as other national regulations.
In the past, companies have set social impact targets. These have been based on their own sustainability objectives and measuring and reporting on those metrics was not subject to much scrutiny. To comply and prove social impact metrics now and in the future, true traceability will require evidence-based verification of claims.
3. GDPR-compliant handling of personal data
As you collect data to back your social sustainability claims, make sure that the way you collect and keep this data is completely GDPR compliant. This tactic is especially important for companies based in or conducting business in the EU. However, historically EU regulations on data and privacy have eventually spread to the US and beyond.
Ensuring GDPR compliance with how you collect data to back your social sustainability claims will be key sooner rather than later to ensure total compliance.
Conclusion: BanQu helps back your sustainability claims with audit-proof, compliant data.
Whether you need to level up your reporting strategy given upcoming regulatory requirements or are hoping to streamline how you gather and report on your data throughout your supply chain, BanQu can help.
A traceability platform, such as BanQu, can be used to create the backbone structure required to gather and report on auditable data across a company’s supply chain tiers. The BanQu platform connects every tier of the value chain onto one system, allowing your company’s internal and external auditors to drill down into the levels and due diligence required to comply with regulations. On our system, auditors can even have permissioned access to the data relevant to conducting their audits.
Our team rolls out BanQu at every tier of a company’s value chain. Suppliers can then provide the data required to comply with any sourcing or due diligence regulation through the system. The digital backbone will then exist for suppliers to add additional information into the system to stay compliant, even as regulations and audit requirements shift.
Our platform is completely GDPR compliant and can be permissioned to allow auditors direct access to relevant information they need to perform their audits. The system is built on blockchain, which allows for audit-proof data capture and reporting. It can be configured to capture all the traceability requirements outlined above that may be required for compliance and auditing.
To learn more about our software, check out our platform!
Ready to see if BanQu is right for your business? Schedule a call with our team!