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ESG & Sustainability

13.00-13.45
Thorvald Gundersen

This is a pre-read for the "ESG & Sustainability" session at the Summit 2024.

How do you comply with customers’ and legislative requirements for ESG and sustainability? How does this impact your operations, and how can information technology enable transparency? 

We discuss available options for manufacturers. What can RamBase for Sustainability look like?

To get the most out of this parallel session we encourage you to read through and reflect how the topics below impact your business. Make sure to note down your talking points to bring to the Summit discussion.

 

From confusion to clarity

A common understanding of sustainability is to meet the needs of the present without compromising the ability of future generations to meet their needs. It is an all-inclusive concept, considering all stakeholders and environmental dimensions. Environmental, social and governance (ESG) refers to a collection of corporate performance evaluation criteria that assess the robustness of a company’s governance mechanisms and its ability to effectively manage its environmental and social impacts. We acknowledge the need for ESG and sustainability standards, but it is a bit confusing. 

“Manufacturers accelerate ESG strategies as customer and supplier requirements increase” (The Manufacturer, Feb. 2024, Website).

investment-savings

Stakeholder and legislative pressure are the main drivers for the current developments in this space. It affects all companies. There is a consensus around this trend, as 97% of companies in the State of Design&Make survey 2024 by AutoDesk have taken actions to improve sustainability.  Stakeholders such as authorities, investors, customers, employees and the society at large expect efforts to operate sustainable. Over 83% of companies are influenced by their customers to act, while 78% are proud of their company’s efforts. However, 87% of the surveyed companies report their sustainability aspirations as good long-term decisions that are good for business. 

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Business and sustainability performance corelate, and the high performance create more value. According to the 2021 McKinsey & Company report “How companies capture the value of sustainability"  the value creators do more than just meet the customers’ requirements on sustainability. They also excel in other areas, like: 

  • Align with their goals, mission, and values 
  • Make tangible positive impact on an issue 
  • Meet industry norms and standards on sustainability 
  • Build, maintain or improve corporate reputation 
  • Conform with regulatory requirements 

They conclude:

“Companies creating value with sustainability are more likely than others to address the issue for reasons related to their organizational purpose.”

 

It is not a software tool alone that will secure additional value creation form your sustainability efforts. The determining factor is how sustainability it is integrated into your culture and how you collaborate across your value chain. In simple terms, success requires strong leadership. 

  • Tema for dagen

08.30 - 12.00

 

Intro kurs for finans
  • Gjennomgang av sammenhengen i finansmodulen med resten av systemet.
  • Kunnskap hva som skal være på plass for en periodeavslutning.

12.00 - 13.00

Lunch

13.00 -15.00

UX Workshop

  • UX gjengen fra produkt kjører en introduksjon til utvalgte RamBase prosjekter.
  • God tid til inspill, ris, ros og spørsmål fra dere partnere.

 

 

Confused by regulatory requirement?

Reporting on sustainability compliance can be experienced as a complex and confusing discipline. Standards are developed continuously, but there are several commonalities across the different regulatory initiatives, programs, standards and protocols. For practical purposes we will use the Corporate Sustainability Reporting Directive (CSRD) and European Sustainability Reporting Standard (ESRS) for this brief introduction.

Large parts of the ESRS metrics, reporting content and procedures are based on existing standards and frameworks. CSRD does not directly apply to small and medium enterprises (SME) unless they are public, however all SMEs will be indirectly affected. As the implementation of the directive progress, more organizations will be subject to sustainability reporting. Our objective is not to provide detailed guidance in all things ESG and sustainability related. We will present an outline and reflect over the relevance for ERP systems. 

The CSRD and ESRS will dominate the ESG reporting. ESRS have 2 general cross-cutting standards, and 12 topical standards. The topics relate to the ESG dimensions Environmental, Social and Governance. Industry-specific and SME’s proportionate standards will come soon.

ESGandSustainability

 

The expectation is that the SME standards will be less extensive than the full ESRS. Although the datapoints to be reported within each topic appears to be continuously evolving, the illustration indicates how many mandatory and optional datapoints are defined for each topic (Source: EFRAG). The number in parentheses represents the number of mandatory datapoints irrespective of materiality assessment. In the datapoint indication on ESRS 2 includes Minimum Disclosure Requirements (MDR). These relate to Policies, Actions, Targets and Metrics (PAT&M) for all disclosure requirements. The standard also specifies if the format of the datapoint within the categories numerical, narrative and semi-narrative. 

ESRS cross-cutting standards

ESRS 1 General requirements  The general requirements are mandatory principles for the preparation and disclosure of sustainability statements in accordance with the CSRD. It covers reporting areas, specifications on due diligence obligations, specification of the value chain and time horizons, it defines the way in which sustainability information must be collected and presented, and it also requires that the individual standards are subjected to a double materiality assessment. This is an assessment of environmental and social impact of company and financial impact from external forces to the company. 
ESRS 2 General disclosure 

ESRS 2 General disclosure 

General disclosure of policies, measures and objectives to be reported regardless of the outcome of the materiality assessment. The standard specifies the structure and content for the ESRS topical standards. It defines four disclosure areas: 

  • Governance 
  • Strategy 
  • Management of impacts, risks and opportunities 
  • Metrics and targets 

ESRS Topical Standards

Environment (E1-5) The standards provide guidance on how the company should identify and manage environmental risks in an efficient manner and is aligned with the EU Taxonomy. It covers reporting requirements related to climate and environmental conditions, including measures to prevent climate change, adaptation to climate change, pollution, water and marine resources, biodiversity and ecosystems and use of resources and circular economy. ESRS E1 on climate change and E2 on pollution apply to all companies and are very central to sustainability reporting. The greenhouse gas (GHG) protocol is central to reporting according to ESRS E1. Risk management related to Registration, Evaluation, Authorization, and Restriction of Chemicals (REACH), including per-and polyfluoroalkyl substances (PFAS), Substances of Concern In Products (SCIP) and Restriction of Hazardous Substances (RoHS) is reported under the environmental standard. 
Social (S1-3) The standards on social aspects enable companies to report information on their own workforce and beyond the company’s boundary in a structured manner. One standard is dedicated to employees in the value chain. Reporting on communities affected by the company’s activities and consumers and end users are also covered separate standards. The standards ESRS S2-4 does not require numerical datapoints. The social standards cover risk management related to Anti-Bribery and Anti-Corruption (ABAC), conflict mineral traceability,  human trafficking, slavery and other human rights issues. 
Governance (G1) The governance standard provides requirements for a company’s strategy, processes and performance for governance, in addition to management of impacts, risks and opportunities within the company. It also specifies requirements for basic information on corporate policy and corporate culture and sets requirements to avoiding corruption and bribery in the relationship with business partners, suppliers and the company’s political influence. This includes Code of Conduct and Supplier Code of Conduct setting the standard for business ethics and requirements for suppliers and partners. 

RamBase partner Mazeppa

Mazeppa er en av våre norske partnere som har solgt og supportert RamBase lengst i Norge.

Bli bedre kjent med Mazeppa
Finn veien

Smart Industri 2022

Mandag 23. mai  kl. 09:00 – 17:00
Tirsdag  24. mai  kl. 09:00 – 18:00
Onsdag  25. mai kl. 09:00 – 15:00
NOVA Spektrum
Norges Varemesse AS
Messeveien 8, 
2004 LILLESTRØM
smartindustri@mgf.no

Sustainable Operations

Our operations encompass the primary processes design, source, make, sell, deliver, service & return, and dispose at end-of-life. All these processes have strategic, tactical and operational level of management, planning and execution activities. All business transactions are recorded in the financial accounts. How does these processes relate to sustainability? Let’s have a brief review: 
Design Maximize lifecycle and durability, design for sustainable manufacturing, distribution, use, maintenance and disposal. Plan for refurbishment, reuse and recycling at end of life, to minimize disposal of materials. Design with sustainable materials and avoid using hazardous material and conflict minerals. Minimize the use of non-renewable materials. 
Source Collaborate with multiple tiers of suppliers, set ESG requirements and promote transparency. Ensure traceability of material used, and their environmental and social impact. Minimize transportation emissions. Avoid quality issues and returns and minimize emissions from returns and waste of material. 
Make Run an environmentally friendly manufacturing process, minimize energy consumption, emissions and pollution. Comply with workforce standards and regulations. Keep a high quality standard for manufacturing to avoid waste.  
Deliver Optimize transport and distribution to minimize emissions. 
Service & Return Avoid returns and minimized emissions related to service operations. Design for maintainability and long lifecycles. 
Dispose Minimize the need to dispose material.  
Supply chain planning Focus on the balance between demand and supply. Optimize for sustainability and minimize waste.

An ERP system is core to the execution of many of these processes. However, some of these areas has specialized tools that touch on how a company can work with sustainability. Examples are product lifecycle management, sourcing, trade management and transportation management. 

According to Gartner there are several categories of tools within sustainable sourcing; supplier sustainability reporting, risk data sources and monitoring systems, specialty applications (like GHG calculators), worker engagement tools, and supply chain traceability and transparency tools. 

The question we need to address is: 

What is the potential role of an ERP system? 

Take part in the discussion!

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We trust that you now possess a thorough understanding of the various manufacturing strategies. 

Most importantly, we want to hear from you! 

We encourage you to bring any questions or feedback to our workshop discussions. Your inputs will influence the direction of our development.