The impacts of climate change on the tourism sector require immediate action to not only help mitigate these effects but also open the door to new opportunities (more…)

On September 10, 2024, legislative decree no. 125 of September 6, 2024 (hereinafter referred to as the "Decree") implementing directive 2022/2464/EU, known as the Corporate Sustainability Reporting Directive or CSRD, on sustainability reporting.

Below is a summary of the main innovations for companies.

MAIN INNOVATIONS

CSRD - amending Regulation (EU) No. 537/2014, Directive 2004/109/EC, Directive 2006/43/EC and Directive 2013/34/EU – introduces significant changes to corporate sustainability reporting and aims to promote corporate environmental, social and governance (ESG) transparency impacts of their activities by strengthening annual reporting obligations. The decree implementing the CSRD will replace legislative decree no. 254 of December 30, 2016, which implemented Directive (EU) no. 2014/95 on the non-financial statement ("NFS"). Below are the main innovations resulting from the application of the decree:

• expansion of the entities subject to the reporting obligation;
• expanding the scope of sustainability communication, which must include information on sustainability and any negative impacts not only in relation to the company's activities, but also in relation to its value chain upwards and downwards;
• double significance approach;
• harmonization of reporting criteria through the use of common standards (European Sustainability Reporting Standards or ESRS);
• certification of conformity of the data presented in the sustainability report;
• inclusion of sustainability information in the management report;
• digitization of communication.

(Melania Mazzonová, more at lexology.com)

Ecological requirements are extremely important for the ecological transition of the economy. They visibly demonstrate companies' commitment to the long-term well-being of all people and the planet. Obviously, ecological claims must be accurate and substantiated.

In 2020, the EU Commission carried out an inventory of environmental claims against the principles of the EU Unfair Commercial Practices Directive (UCPD): clarity, unequivocalness, precision and verifiability. The study found that 53 % claims provided vague, misleading or unsubstantiated information and 40 % claims were unsubstantiated.

In order to strengthen the position of consumers during the ecological transition, in March 2023 the EU Commission presented to the European Parliament a proposal for a directive on ecological claims (GCD). The directive, due to enter into force in 2028, seeks to ensure that all explicit environmental claims are substantiated and clearly communicated. The main objective of the directive is to eliminate unverified and deceptive greenwashing practices and help consumers make more informed decisions. To the same end, the revision of the Swiss Unfair Competition Act (UCA), which will take effect on January 1, 2025, requires that environmental claims be documented and objectively verifiable. (Daniel Lucien Bühr, Gabriela Svalduzová, more at lexology.com)

The human right to food is becoming increasingly important as climate change and biodiversity loss increase pressure on food supplies and food insecurity issues become more widespread.

In this article, we examine the evolution of the human right to food under international law and how climate change and biodiversity loss contribute to existing global food insecurity issues, including implications for First Nations peoples. We will also discuss the role of the private sector in protecting and improving safe access to healthy and nutritious food and how pro bono legal services can help. (Grace Cameron, more at nortonrosefulbright.com)

ESG, sustainability, climate risks. Topics that have resonated in the business world for years. But there is a new term that should not escape the attention of any company - "Green Swan" in the Slovak version "zelená labuť". This phenomenon represents a new challenge in the field of environmental risks, which can have a fundamental impact not only on the global economy, but also on Slovak companies.

"Green swans" are extreme events associated with environmental factors that have the potential to trigger radical changes in society and the economy. Unlike the common risks we encounter on a daily basis, "green swans" have the potential for catastrophic consequences. (More on esgklub.sk)

"Banks can cooperate on sustainability reports' The Authority for Consumers and Markets (ACM) issued an informal letter on 15 August allowing Dutch banks to cooperate on their sustainability reports in response to a request from the Dutch Banking Association. (NVB). ACM does not expect the cooperation to have negative consequences, such as price increases or quality reductions. At the same time, NVB announced an initiative in which banks will collaborate on a data project aimed at clarifying certain sustainability criteria that banks must report on. In this context, they assess what data is needed and identify appropriate and reliable calculation methods. Cooperation is currently a pilot project focused on the transport, agriculture and real estate sectors. (NautaDutilh, more at lexology.com)

In recent years, the emphasis on sustainable and responsible investing has grown significantly. This shift is driven by the increasing awareness among investors, regulators and the public of environmental, social and governance ("ESG") issues. One of the key regulatory frameworks shaping this environment is Regulation (EU) 2019/2088 of 27 November 2019 on the disclosure of information related to sustainability in the financial services sector (hereinafter referred to as the "SFDR"), which entered into force on 10 March 2021. The SFDR has the goal of strengthening the protection of end investors by increasing transparency and promoting sustainability in financial markets. It imposes an obligation on financial market participants and advisers to disclose information on how they integrate ESG factors into their risk processes. Article 8 funds, often referred to as "light green" funds, play a key role in this framework. (MAMO TCV lawyers, more at lexology.com)

How can ISO 14067 certification attract investors to your company?

Competitive advantage: With growing consumer awareness and demand for sustainable products, ISO 14067 certification can differentiate your company from the competition and attract environmentally conscious customers. In addition, this certification confirms your organization's commitment to aligning with consumer sustainability expectations, providing a comprehensive understanding of the carbon footprint of your products even after they leave your control. By demonstrating such accountability and transparency, you can attract investors who emphasize environmental, social and governance (ESG) criteria.

Innovative emission reductions: ISO 14067 certification not only helps you measure and manage emissions in your production process, but also encourages you to find innovative ways to reduce emissions throughout the entire product life cycle. This proactive approach to sustainability can make your company more attractive to investors who prefer long-term, environmentally responsible investments.

Addressing scope 3 emissions: ISO 14067 certification also addresses scope 3 emissions, which are often the most difficult to manage and control. By addressing this complex issue of carbon management, your company can demonstrate its commitment to combating climate change, further strengthening investor confidence in your sustainability initiatives.

How to get documentation for ISO 14067 certification?

Beginning the ISO 14067 certification process requires careful preparation and documentation. Here is a detailed guide on how to compile the necessary documents:

1. Identifying relevant data sources: Start by identifying all areas in your company that generate data relevant to carbon footprint assessment. This may include:

– Energy consumption records

– History of fuel consumption

– Environmental reports from suppliers

2. Historical Data Collection: Get historical data that accurately reflects your company's operating practices. This includes:

– Energy bills

– Procurement records

– Traffic logs

3. Organization of documentation: Implement a systematic approach to data organization, which may include:

– Creating a digital storage system

– Categorization of documentation by type (e.g. energy, transport, procurement)

– Ensuring easy access to files

4. Data Accuracy Verification: Before submission, it is important to verify data accuracy, which includes:

– Comparison of data with original sources

– Ensuring consistency throughout the documentation

– Fixing any anomalies

5. Conduct internal audits: Manage internal audits to ensure that all data collected meets the requirements of ISO 14067. This process typically includes:

– Documentation review with the internal team

– Identification of areas for improvement

– Preparation of a summary report on your findings

6. Preparation for third-party verification: If you plan to use third-party verification services, perform the following steps:

– Prepare a preliminary documentation package

– Make sure all files are organized and easily accessible for review

– Expect that the verifier may request additional information

Practical tips to simplify the process

– Use of templates: Standardized templates can ensure consistency in data collection and presentation.

– Document everything: Keeping thorough records of the steps you took to collect and verify data is key.

– Schedule regular reviews: Regularly review and update documentation to maintain accuracy and relevance.

By following these steps and ensuring thorough documentation, your company will be well prepared for the ISO 14067 certification process. (Co2AI)

We have prepared for you answers to the most frequently asked questions related to ISO 14067.

What is the difference between ISO 14064 and 14067?

ISO 14064 focuses on more complex aspects of greenhouse gas emissions, at the level of organizations and projects. On the other hand, ISO 14067 focuses exclusively on the carbon footprint of products and provides detailed guidance on quantifying and reporting emissions throughout the product's life cycle.

What is the difference between ISO 14064 and other ISO certifications?

ISO 14064 differs from other ISO certifications in that it specifically addresses greenhouse gas emissions. Other certifications, such as ISO 9001 (quality management) and ISO 14001 (environmental management), focus on different aspects of an organization's performance. ISO 14064 can be combined with these systems, but its primary focus is on the accounting and verification of GHG emissions.

What is the difference between ISO 14067 and the GHG protocol?

ISO 14067 and the GHG Protocol both provide frameworks for calculating and reporting greenhouse gas emissions. However, ISO 14067 is specifically aimed at assessing the carbon footprint of products, while the GHG Protocol offers broader guidance for corporate accounting and reporting of emissions. The GHG protocol has global widespread use, while ISO 14067 brings a more detailed assessment at the level of individual products.

How does ISO 14067 differ from other ISO certifications?

ISO 14067 differs from other ISO certifications such as ISO 50001, ISO 9001 and ISO 14001 primarily by its focus on products instead of overall management systems.

Product focus vs. management systems

– ISO 14067: This certification focuses on the carbon footprint of products, quantifying greenhouse gas (GHG) emissions throughout the entire life cycle – from raw material acquisition to disposal. This product-oriented approach is unique within the ISO series.

– ISO 50001: The standard deals with energy management systems (EnMS) and helps organizations improve energy efficiency, reduce energy consumption and mitigate environmental impacts through systematic energy management.

– ISO 9001: Certification focuses on quality management systems (QMS) and ensures that organizations meet customer requirements and legislation, thereby increasing customer satisfaction through effective quality management processes.

– ISO 14001: The standard focuses on environmental management systems (EMS) and provides a framework for organizations to help them protect the environment and respond to changing environmental conditions in line with socio-economic needs.

A key comparison

– Scope of application:

– ISO 14067: It focuses on the carbon footprint of individual products.

– ISO 50001, ISO 9001, ISO 14001: They deal with overall management systems in companies.

– Objectives:

– ISO 14067: Measurement and communication of the ecological impact of specific products within their life cycle.

– ISO 50001: Focuses on reducing energy consumption and improving energy efficiency.

– ISO 9001: The goal is to maintain consistent quality and increase customer satisfaction.

– ISO 14001: Aims to reduce environmental impact and improve ecological aspects.

One goal, different approaches

Although each ISO certification scheme has its own unique purpose, they all contribute to the overall improvement of processes in organizations. They enable companies to operate more efficiently, sustainably and responsibly. The integration of these standards offers a comprehensive approach to achieving business excellence and sustainability.

In short, ISO 14067 is specific among ISO certifications because it deals with the assessment of the carbon footprint of products, unlike others that focus on broader management systems. (Co2AI)

European banks increasingly assess the so-called ESG factors – environmental, social and governance aspects of sustainability. It is no different in Slovakia. ESG reporting, i.e. the publication of data on sustainability, has become an obligation for many Slovak companies with the arrival of new legislation valid from May of this year. How should a Slovak company react to the new ESG regulations in order to remain an attractive partner for the bank? How does this relate to the issue of climate change? (More on esgklub.sk)

We have prepared for you answers to the most frequently asked questions related to ISO 14067.

Why is ISO 14067 certification crucial for companies?*

Obtaining ISO 14067 certification can be a decisive moment for companies if they want to succeed in today's environmentally responsible market. This certification clearly shows the organization's commitment to sustainability, an aspect that is highly valued by multiple stakeholders.

Improved customer perception

Today's consumers are increasingly aware of the impact of their purchasing decisions on the environment. Although they do not always have the details of quality management systems and the environment in mind when choosing products such as cosmetics or scented candles, they value transparency and sustainable practices. Initiatives such as refilling cosmetic containers at a discount can strengthen brand loyalty and customer satisfaction. These programs emphasize the company's efforts to reduce its carbon footprint, and their effectiveness can be greatly enhanced by the existence of ISO 14067 certification.

Main benefits of ISO 14067 certification

1. Transparency in production: ISO 14067 certification ensures that companies adhere to strict environmental standards. This includes:

– Obtaining raw materials from sustainable sources.

– Continuous improvement of life cycle assessment (LCA) in order to minimize environmental impacts.

– Measures to protect human health and reduce greenhouse gas emissions.

2. Energy efficiency: Companies that can be proud of this certification can demonstrate a fundamental reduction in energy consumption, which emphasizes their commitment to sustainability.

3. Verifiable claims: The certification is based on the latest scientific knowledge, thus eliminating the risks associated with misleading environmental labels and presentation practices.

4. Climate change initiatives: Companies with ISO 14067 certification actively engage in climate change solutions through local and global initiatives, which contributes not only to profitability, but also to the well-being of society.

Strengthening business credentials

ISO 14067 certification doesn't just mean operational improvements; it is also a strong signal to investors that the company is focused on the future and responsibility. In this way, it can attract more attention from investors looking for opportunities to support sustainable businesses, which can lead to increased investment and the overall financial health of the business.

Competitive advantage

In the wider business environment, obtaining various ISO certifications can position a company at the top as a sustainability leader in its industry. Having ISO 14067 as part of the certificate portfolio is essential for any business that focuses on long-term impact and reputation. We can compare it to adding key ingredients to a recipe - the result is a "product" that not only appeals to consumers but also to investors.

In conclusion, achieving ISO 14067 certification is much more than just meeting regulatory requirements; it's a strategic move that can propel the company into higher realms of market credibility, increase investor interest, and foster continued success in sustainability. (Co2AI)

We have prepared for you answers to the most frequently asked questions related to ISO 14067.

What is the ISO standard for carbon accounting?

ISO 14067 is an international standard that sets out principles and requirements for quantifying and reporting the carbon footprint of products. It offers a comprehensive methodology for assessing greenhouse gas (GHG) emissions throughout a product's life cycle, from raw material extraction to disposal.

What is the ISO GHG standard?

The ISO 14064 series is a standard that deals with greenhouse gas (GHG) accounting and verification. It provides guidance on the quantification, monitoring, reporting and verification of greenhouse gas emissions. ISO 14064-1 focuses on greenhouse gas emissions at the organization level, while ISO 14064-2 and ISO 14064-3 focus on project-level emissions and their verification.

Is ISO 14067 verification necessary?

Although verification in accordance with ISO 14067 is not mandatory, it can be beneficial to ensure the accuracy and credibility of a product’s carbon footprint data. Independent third-party verification can increase the transparency and reliability of carbon footprint assessments, providing stakeholders with confidence in the data. (Co2AI)

ISO 14067 - Greenhouse gases - Carbon footprint of products is an international standard that provides basic principles, requirements and guidelines for quantifying and reporting the carbon footprint of products (CFP). (more…)

A robust, clear and ambitious set of corporate carbon reporting, accounting, target-setting and verification standards is important, as these will together guide corporate behavior and foster confidence in significant climate investment.

Mobilizing corporate climate finance is at least a $2.6 trillion challenge: that's the amount many expect private companies to step up to deliver the $8 trillion in global climate finance needed by 2030. $8 trillion represents a sixfold increase from 2022 levels. (Christina Hood, Compass Climate and Andrew Prag, We Mean Business Coalition, more at wemeanbusinesscoalition.org)

Due to the increased importance of sustainability, environmental protection and social factors in recent years, the luxury industry has found itself at the crossroads of tradition and transformation. Once characterized primarily by exclusivity, creativity, craftsmanship and heritage, this sector is now increasingly influenced by global pressure for sustainable lifestyles and ethical practices. It is not only consumer awareness and changing consumer behavior towards sustainability that is influencing companies' strategic decisions and reshaping investors' expectations. It is also governments and regulators that are introducing new laws as well as new liability regimes that are putting significant pressure on the luxury industry. For companies operating in the fashion and luxury goods sector, it is essential to comply with new legal requirements and compliance standards while maintaining brand prestige and profitability. Product sustainability is increasingly becoming a value-creating factor throughout the entire product life cycle. From sourcing and production to product characteristics and final disposal, consumers and investors alike are willing to invest in companies or products that are luxurious and ethical. (Dr Tilman Kuhn, Dr Sonja Hoffmannová, Clare Connellan, Ian Ivory et al., more at lexology.com)

If you have questions about accounting for corporate emissions from purchased energy, we recommend that you review our learning materials on guidelines for scope 2 diaotokol GHG. The GHG protocol offers  webinar with scope 2 , which covers reporting requirements and provides practical examples of how to calculate emissions based on different treaty instruments in different countries. The recorded webinar is freely accessible here He also published the Greenhouse Gas Protocol range source 2, which contains answers to 14 frequently asked questions about the guidelines. (More on ghgprotocol.org)

ESG (Environmental, Social and Governance) reporting requirements for companies increasingly focus on non-financial factors. Recent regulatory changes have ensured that sustainability has become a key risk factor, (more…)

Environmental, Social and Governance (ESG) practices are a set of standards for assessing an organization's social and environmental impact. (more…)

Carbon accounting is a recognized framework that enables organizations to measure and reduce greenhouse gas (GHG) emissions. Emissions are divided into three categories: scope 1 (direct emissions), scope 2 (indirect emissions) and scope 3 (emissions associated with the value chain). While scope 1 and 2 emissions are relatively easy to monitor, scope 3 emissions are more complex and involve the entire value chain from suppliers to end users. The Greenhouse Gas Protocol provides guidance to businesses for 15 emission categories in scope 3, covering a variety of activities. If businesses address this issue, it can have a positive impact on their entire value chain. Scope 3 firms will have to report their emissions and face pressure to reduce their own emissions if a reporting firm sets scope 3 targets. An example is Aston Martin, which in its 2022 sustainability report has implemented procurement policies with the aim of achieving zero emission outputs in the supply chain by 2039, while the requirement was that suppliers meet the ISO14000:2015 standard. In 2022, 95 % of their suppliers reported that they had succeeded.

In 2023, the International Sustainability Standards Board adopted the first sustainability disclosure standards (IFRS 1 and 2) that cover emissions in all three scopes. These standards replace previous climate disclosure recommendations from the Working Group on Climate-Related Financial Disclosures. The new standards are becoming a global basis, with six countries already adopting them (Bangladesh, Brazil, Costa Rica, Nigeria, Kenya and Turkey), 16 countries planning to adopt them (including Australia, Canada, the United Kingdom, Japan and China) and three countries update their existing standards in accordance with these standards (including EU and US).

As the obligation to carbon accounting increases, so does the need for accurate data to calculate emissions. Current methods for calculating emissions in scope 3 are based on obtaining relevant data or using average emission factors in a given field to multiply a certain value or quantity of purchased goods and services. Challenges in this area have been identified in the Science-Based Targets Initiative documents, which offer businesses a framework for setting science-based emission reduction targets in line with the goals of the Paris Agreement. These papers address the issues of measuring emissions in scope 3, suggest potential solutions and show the role of environmental performance certificates (e.g. carbon credits) in addressing these emissions. They are also pre-empting the update of their Corporate Net Zero Standard, which is expected at the end of the year. The MASSIV+ initiative, which includes leading companies such as Microsoft, IKEA and Volvo Cars, is focused on overcoming the problems of missing information and inaccurate emission factors, aiming to revolutionize the way industry reports and validates its greenhouse gas emissions. Their vision is that if all firms calculated and published scope 1 and 2 emissions, this would enable a more accurate calculation of scope 3 emissions.

As regulations and guidelines continue to evolve, as well as emission reduction targets increase, there will be a need to more accurately calculate emissions at all scales with an emphasis on improving ESG performance. While there may not be a specific obligation for companies to comply with these standards, joining the value chain of another organization that must comply with them will require the ability to provide relevant emissions data. Developing the skills to measure, monitor and reduce emissions in scope 3 will therefore become an important subject for firms to ensure their competitiveness in the future, increase their ESG performance and adapt to the changing regulatory environment. (Co2AI)

In the previous part of our series on corporate sustainability, we analyzed the Corporate Sustainability Reporting Directive (CSRD) and its impacts, the scope of the relationship, the obligations that companies must fulfill in its preparation and the current obligations that need to be complied with. In the second part, we will focus on the Corporate Sustainability Due Diligence Directive (CSDDD). This legislation is one of many steps aimed at raising awareness of the impact of business activities on the environment and human rights and promoting responsible and sustainable behavior of companies within supply chains.

On May 24, 2024, the Council of the European Union formally adopted the CSDDD. The directive entered into force on 3 July 2024, with member states having two years to transpose it into national law and inform the European Commission of the relevant texts. This legislation is a major step towards promoting sustainable and ethical practices between businesses based in the EU, as well as between these businesses and their partners from third countries. The CSDDD fits into the wider legislative framework of the European Union aimed at sustainability, which also includes the European Green Deal and the CSRD, and is in line with the United Nations' 2030 Agenda for Sustainable Development.

The CSDDD will be introduced gradually depending on the size and turnover of enterprises. The division into phases is as follows:

Phase 1: For EU companies with a worldwide net turnover of €1.5 billion or more and 5,000 employees, as well as for non-EU companies with the same turnover that have operated in the EU in the previous year, the implementation date will be the end of 2027.

Phase 2: For EU companies with a turnover of EUR 900 million or more and with more than 3,000 employees, and for non-EU companies with a turnover of EUR 900 million and existing in the EU, the implementation date is set at the end of 2028.

Phase 3: For EU companies with a turnover of EUR 450 million or more and with more than 1,000 employees and for external companies with the same parameters, the implementation date will be by the end of 2029.

Although micro and small and medium-sized enterprises (SMEs) are not indirectly subject to the CSDDD, they may be affected as trading partners within value chains and the legislation will provide them with support and protection.

The CSDDD aims to ensure that all companies operating on the European market contribute to the sustainable transformation of economies. Main duties include:

– Due diligence: Businesses must implement internal due diligence and take measures to prevent and mitigate negative impacts on human rights and the environment in their operations and within their supply chains.

– Transitional climate change mitigation plan: Successful companies are required to develop a climate change mitigation plan, which should be evaluated and updated annually.

- Notification mechanism: Companies must establish an accessible system for submitting information about potential negative impacts on individuals and organizations.

– Grievance Procedure: Organizations must ensure fair and transparent mechanisms for dealing with complaints from individuals who have been affected by illegal practices.

– Monitoring the effectiveness of policies: It is the duty of companies to monitor the effectiveness of their due diligence policies.

– Transparency requirements: Companies are expected to publicly disclose their sustainability practices and results.

CSDDD will introduce two enforcement mechanisms – administrative supervision and civil liability. National supervisory authorities will be responsible for ensuring compliance and will have the power to initiate investigations. In case of failure to comply with the obligations, companies can be sanctioned with fines that can reach up to 5 % of global turnover.

The CSDDD complements the existing CSRD directive. While CSRD focuses on transparency and accountability, CSDDD emphasizes adherence to strict environmental and human rights standards. Climate mitigation planning requirements are aligned with the CSRD, meaning companies don't have to worry about double reporting. (Co2AI)