Special Feature
Ethical Supply Chain Program
Keeping up with the legislators: how global ESG regulation will impact your business As the organisation celebrates its 20th year, Aoife McCarthy, executive, Digital Marketing & Membership at the Ethical Supply Chain Program (previously the Ethical Toy Program), tells Toy World readers what businesses ought to be doing to ensure they remain compliant with global Environmental, Social and Governmental (ESG) standards.
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n a world where business practices are under increasing scrutiny, ensuring you have the correct processes in place to safeguard workers’ rights has never been more important. Across the globe, ever more governments are requiring companies to disclose the impacts of their business activities on human rights and the environment. Organisations of all sizes must evaluate their impact across a spectrum of Environmental, Social and Governmental (ESG) factors, and finding a trusted partner to help ensure your company meets these changing requirements is fast becoming a priority. Helpfully, the term ESG is now commonplace. In its simplest terms, it’s about how businesses impact the world. While environmental concerns have long taken centre stage, the ‘S’ in ESG – referring to social responsibility – is increasingly being recognised for its importance.
ESG due diligence is no longer an expectation, but a global, legal requirement Last year, global regulations regarding ESG advanced significantly. What was once an expectation became legally enforceable, leaving many companies unsure
where to begin. Some legislative examples include: the German Supply Chain Due Diligence Act (LkSG); the US Forced Labor Prevention Act (UFLPA); and the European Commission’s Corporate Sustainability Due Diligence Directive (CSDDD). Organisations doing business in any of these regions are required to implement comprehensive due diligence programmes that demonstrate their understanding of the negative impacts their business activities might have on human rights and the environment. Companies are also expected to prove they have measures in place to prevent and remedy these impacts. There is, however, a common misconception: that these acts will only affect the industry’s largest players, and among those, only companies originating from these territories. However, even the smallest companies can be indirectly affected. Regardless of the size of a company, failure to comply carries with it a real risk of financial and/ or reputational harm. To paint a picture of how widespread global ESG regulation is becoming, we have put together an
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infographic which illustrates current regions with existing and upcoming ESG due diligence legislative requirements.
How can businesses ensure they stay compliant? Monitoring the status of proposed or recently introduced ESG legislation on a global scale is a challenge for any business. Fortunately, finding a partner that can support you as you navigate the changing global legal landscape is a low-cost and low-risk way to ensure your business remains compliant. One of the benefits of working with an organisation like the Ethical Supply Chain Program, formerly the ICTI Ethical Toy Program (IETP), is that it’s one-stop-shop offering. The Ethical Supply Chain Program provides solutions for all your ESG needs and houses all the key supply chain data needed for your reporting and
