Why are enterprise companies requesting due diligence?

Existing barriers to Governments reaching Net Zero.....

1. 80% to 90% of emissions come via supply chain - until now not covered
2. SME's (under 1,000 employee's) represent 50% plus of emissions but many not covered by legislation

Two pieces of legislation have changed that :

• Corporate Sustainability Reporting Directive (CSRD) ...2024
• EU Corporate Sustainability Due-Diligence Directive (EUCSDD) . Passed 24th April 2024

Forcing "enterprise" sized companies and public sector organisations to drive sustainability through their supply chains i.e. mainly the SME sector.

What is Due Diligence?

The European Union Corporate Sustainability Due Diligence Directive (EUCSDD) establishes a corporate due diligence duty for certain businesses. Here are the core elements of this duty:

Identification: Companies must identify and address potential and actual adverse human rights and environmental impacts in their own operations, subsidiaries, and value chains.

Climate Change Mitigation: Large companies are obligated to adopt and implement a transition plan for climate change mitigation aligned with the 2050 climate neutrality objective of the Paris Agreement and intermediate targets under the European Climate Law

In summary, the EUCSDD aims to foster sustainable and responsible corporate behavior by ensuring companies address adverse impacts within and beyond Europe. It benefits citizens, companies, and developing countries alike.

If your organisation, regardless of size, supplies enterprise companies directly or indirectly, your customers will expect you to provide environmental data and ensure that the suppliers you choose won’t cause your customers to violate this legislation.

A customer’s value chain (supply chain) encompasses not only its direct suppliers (1st Tier) but also their suppliers (2nd Tier) and beyond (3rd, 4th & 5th Tiers). If your organisation operates at the 3rd Tier, you must analyze your immediate supply chain and report information upward.

The Challenge: A Typical Supply Chain = 100,000+ organisations

A "Supply Chain" is not just your direct suppliers but "all suppliers of your suppliers". This could easily reach an analysis of 100,000 organisations which contribute to a carbon footprint.

The video, taken from the STERA dashboard shows the complexity of a supply chain even for an SME.

Question: How do you prove to your customer that you have undertaken due diligence of the supply chain?

• Calculate the cost of analysing 100,000 entities
• Time scales
• Expertise required
• Ensuring records are accurate and up to date

For even the largest organisations, the resources required are prohibitive. This leads to inaccurate and ineffective processes.

Introducing STERA : The solution for enterprise and SME organisations alike.

• First Time to update your account: 20 minutes
• Subsequent updates: Minutes
• Specialist skills required: None
• Conduct due diligence on behalf of your customers: Automatic
• Cost: Zero

Using STERA

The worlds first free and independent technology solution for analysing scope three emissions and which monitors the labyrinthine nature of the extended supply chain enabling procurement departments to comply with environmental and human rights legislation by conducting due diligence.

• As a supplier treat STERA as a sales and marketing tool
• It provides a platform from which customers can scrutinise your environmental credentials.
• Creates a clear competitive advantage compared to 99% + of competitor organisations

This lesson explains how to complete the STERA registration process.

The Process

1. Update your Account. You will need your confidential CP number to complete this task.
2. Upload supplier data to your account
3. Ensure your environmental rating is correct (Internal)

Uploading supply chain information to your STERA account is both simple and quick.

1. Download the CSV file template. Click this link
2. Extract the information from your accounts/ procurement package
3. Upload the data to our STERA account.

Please note only your organisation have access to the data on your supply chain. It is never disclosed to your customers or "customer customers"

STERA do the rest!

Why is STERA free to suppliers?

Two reasons why STERA does not charge:

1. A rating agency needs to evaluate all organizations uniformly to ensure consistent, reliable ratings for valid comparisons. Competitors who greenwash won’t pay for critical assessments and leaving responsible organisations at a disadvantage.
2. STERA will always remain independent and objective. A paid environmental rating agency may have a conflict of interest, risking their impartiality and potentially leading to biased ratings to secure future business.



Preparing to update your account

To help you prepare; "Cheat Sheet":

This helps with gathering the data required. Click this link to download the document

Extracts from the "Cheat Sheets". This shows the questions and points available when registering:

There will be several other pieces of information required. These are listed so that you can complete the registration process seamlessly 

About STERA Ratings

STERA is an independent environmental rating agency that operates similarly to credit rating agencies used by banks to assess individuals or corporations for decision-making purposes.

This agency is utilised by procurement departments to showcase that they have thoroughly conducted due diligence on their extended supply chain.

By having STERA ratings in place, companies can demonstrate their commitment to environmental responsibility and sustainability, providing transparency and accountability in their supply chain practices.

A STERA rating consists of two parts:

1. Internal
2. Supply Chain

• The first is the internal rating,
  • This evaluates the measures taken by an organisation to achieve net zero targets and carbonisation.
  • It includes initiatives such as reducing energy consumption, implementing sustainable practices, and promoting environmental awareness among employees.
• The second component is the aggregate rating of the supply chain
  • This considers not only the environmental impact of direct suppliers but also that of indirect suppliers, such as the suppliers of your suppliers, and continuing down the supply chain.
  • By looking at the entire supply chain, STERA aims to provide a holistic assessment of an organisation's environmental footprint and encourage improvements at every level of the production process.

Understanding the impact of the supply chain on an organisation's carbon footprint is crucial in the journey towards achieving net zero emissions. More than 90% of an organization's carbon footprint is often attributed to its supply chain activities.

Start the Updating Process

Click this LINK

You should update your records when any significant changes have taken place or on a yearly basis.

Provide a link to your customers

Quarterly PDF reports.

Business Case

Business Case:

Action; Increase sales by 1% / 5% /10%+

Inaction: How many suppliers are you at risk of losing. 1% / 5% /10%+

Cost of implementation:

• Zero
• Minimal
• Substantial

Lesson Summary

Registering for STERA is a quick and free process that can give your organization a competitive edge by showcasing your environmental credentials. STERA, an independent environmental rating agency, provides a platform for companies to display their commitment to sustainability. The registration involves:

• Completing the internal rating, evaluating measures for net zero targets and carbonisation.
• Calculating the aggregate supply chain rating, considering impacts from both direct and indirect suppliers.

Understanding your supply chain's carbon footprint is vital in achieving net zero emissions, as typically over 90% of an organisation's carbon footprint comes from the supply chain. To prepare for registration and obtain a good rating, you can follow a cheat sheet with points for various actions:

• Implementing decarbonisation strategies.
• Using green energy sources and renewable power.
• Conducting due diligence on the supply chain.

During registration, you will need to upload supply chain information to your STERA account, utilizing a CSV template provided. Remember:

• The data is private and only accessible by you, not shared with customers.
• STERA takes care of the assessment process once you upload the required information.