Urgent Need for Transparent Supply Chains
At the Kick-off Webinar of natureplus Europe Event Series entiteled "Transparent Supply Chains for Sustainable Building Materials" CSR-experts and EU parliamentarians discussed the voluntary and legal instruments to bring transparency to the construction supply chains.
To start the natureplus Europe Event Series "Building a transparent supply chain", the way to transparent supply chains for sustainable building materials and the influence of corporate social responsibility (CSR) reports were discussed in the kick-off webinar. Thereby, an overview of existing voluntary tools, as well as legal European regulations to disclose material flows was created. Currently, the construction sector is one of the highest CO2 emitters in the European Union, as only the construction, refurbishing and demolition of buildings accounts for 10% of the total carbon footprint in the EU and during the use of the buildings, a further 30% is needed for heating and operation. In addition, this sector produces half of the industry’s waste while only reusing 1% of construction material. When looking at Germany, the construction sector processes more than 70% of all extracted raw materials. Especially this extraction is often linked to interventions in the environment and contributes to global warming, which is why it is so important to keep a close eye on supply chains, natureplus director Tilmann Kramolisch said to introduce in the topic.
Anna Cavazzini
In her keynote statement, Anna Cavazzini, Chair of the EU Committee on the Internal Market and Consumer Protection, therefore welcomed the natureplus event series: "It is very important that civil society is also involved in the ongoing legislative process at EU level." She said that the most important motive for her EU involvement was to get the global supply chains free of human rights violations and environmental damage. The core of the EU Commission's draft for the Corporate Sustainability Due Diligence Directive, which has been presented in February, must now be jointly defended and further improved by all those affected in the consultation process that is now to follow.
Dr. Stefan Müssig
Dr. Stefan Müssig, recognised CSR expert, consultant at the Würzburger Umwelt- und Qualitätsmanagement Consulting GmbH (WUQM), and Chairman of the Federal Association for Environmental Consultancy (bfub), is performing audits for CSR reports (CSR = Corporate Social Responsibility) also in the construction industry - which are currently still mostly voluntary. He sees in CSR reports good opportunities for companies to present themselves as trustworthy partners, to recognise possible risks at an early stage, to enjoy financial advantages - for example with insurance companies, lenders and recently, within the framework of the EU taxonomy, also with investors - and last but not least to be able to answer the information requests of business partners in the supply chains in a well-founded manner. Of course, auditing by independent third parties and the use of recognised EMAS systems, in Germany for example the DNK (German Sustainability Code), are important for credibility. In the future, it is planned to make these CSR reports obligatory for more and more companies. In addition, a European standard is being developed (ESRS = European Sustainability Reporting Standard), in which environmental goals such as climate protection, climate adaptation and circular economy are addressed as well as labour and human rights and the so-called governance of the companies, i.e. ethical and transparency goals in the company's culture. Müssig cited the natureplus client XELLA as a positive example of a successful CSR report and reported a very strong increase in good CSR reports in the construction sector as well.
Malte Gallée
The second impulse lecture came from Malte Gallée, Member of European Parliament and Substitute Member of the Committee on the Internal Market and Consumer Protection. He sees the Corporate Sustainability Due Diligence Directive (CSDDD) in line with the European Green Deal, which for him has been the greatest success of the environmental and climate protection movement. This regulation brings legal binding force to guidelines that were previously only voluntary and vague, and makes companies responsible for human rights violations and environmental damage. It is about the internalisation of external costs or "simply put: pollution must not pay", Gallée said. Important to him are the complaints mechanisms that allow victims of industrial misconduct, but also, for example, environmental organisations, to take action against the companies. Gallée sees the resource-conserving circular economy and the reparability of products as the most important personal concern, which is a central issue in the construction sector. While up to now there has only been a reporting obligation for less than 1% of companies, this obligation will be extended in future to up to 50,000 companies across Europe. Now the consultation process in the EU bodies and with the individual member states will start in spring 2023 and it is hoped that the CSDDD can be adopted before the next parliamentary elections in 2024.
The discussion then focused on the credibility and detail of the reporting by the companies. One must prevent the independent audit from consisting only of ticking off checklists, said Gallée. Current options for audits are for example simple verifications or limited assurances by auditors. In future these simple audits will be no longer sufficient as external audits will become mandatory. For this reason, CSR guidelines and standards should be integrated soon, to target all levels of CSR, Müssig said.