The importance and relevance of ESG in today’s business environment increases. Adopting ESG practices is no longer optional. It is essential for businesses aiming for long-term success and positive impact.
Improving your company's responsibility requires organising workflows not only within the company but also throughout your value chain and in collaboration with your suppliers and subcontractors.
ESG requirements for companies established and operating critical infrastructure
There are industry-specific requirements for companies establishing and operating critical infrastructure to ensure the providing of essential services in a secure, reliable, and sustainable manner while protecting the public and the environment. The following are some of the typical requirements, although they are nationally determined:
In telecommunications, the network integrity and data security must be ensured. As well as the availability and redundancy to maintain communication lines during emergencies.
The transportation industry—containing railways, airports, and roads—applies physical security measures to protect against terrorist attacks and ensures reliability and maintenance for continuous operation and passenger safety.
In water supply and wastewater, factors such as hygiene and safety in water treatment and distribution are central, as well as the protection against contamination and attacks on the water supply system.
In the energy industry, things such as grid stability, energy efficiency, and integration of renewable energy sources important for electricity, and stringent safety measures against leaks and explosions, and environmental considerations during extraction and transportation when it comes to oil and gas sectors.
In healthcare, the protection of patient data and ensuring continuous operation of medical equipment and emergency plans for pandemics and other health crises is significant.
Moreover, there are some general requirements companies must comply with when it comes to ESG. The general requirements typically concern aspects such as:
Security: Protection against cyberattacks, physical threats, and natural disasters. Implementation of robust security protocols and access controls.
Reliability and resilience: Continuous operation without interruptions. Redundancy and backup systems to prevent downtime.
Regulation and compliance: Adherence to national and international laws and standards. Regular reporting and audits to ensure compliance.
Sustainability and environmental considerations: Environmentally friendly operational methods. Reduction of carbon emissions and waste management.
Use of subcontractors in relation to companies' ESG responsibilities
By integrating ESG responsibilities into subcontractor management, companies can enhance their overall ESG performance, ensuring a sustainable and ethical approach throughout their value chain.
If your company is subject to regulations, requirements regarding ESG compliance are typical applying when using subcontractors.
If that is the case, your subcontractors must comply with the same ESG standards as the primary company. This includes environmental protection, fair labour practices, and strong governance policies.
According to the environmental responsibility, subcontractors often must implement measures to reduce their environmental footprint. Such as reducing emissions, conserving energy, and managing waste.
Regarding the social responsibility, it is often required that subcontractors ensure fair labour practices, safe working conditions, and respect for human rights.
Considering the governance standards, subcontractors often must follow robust governance practices, including transparency, ethical business conduct, and accountability.
Even without specific regulatory requirements, companies can ensure that subcontractors maintain a green profile throughout the value chain.
This also applies to software suppliers, ensuring implementation of sustainable environmental practices, such as energy-efficient data centres and minimal carbon footprints, social practices, such as fair labour practices, data privacy, and security measures, to protect user information and maintain ethical standards, and governmental practices to maintain transparency, ethical business conduct, and compliance with relevant regulations.
What should companies report on?
Companies must disclose information in their sustainability reports, including their strategy, policies, goals, achievements, and value chains.
The ESG standards also define materiality and structural requirements, requiring companies to quantify and report on their activities and value chain according to topic-specific standards across the three sustainability areas.
Large companies subject to CSRD must comply with these reporting requirements and may request ESG data from their suppliers.
SMEs not publicly listed are exempt from these requirements but may still face demands from customers and partners for sustainability documentation.
How can IntelliFinder be at help?
You can use IntelliFinder as a tool for collecting data from your field operations–including subcontractors' activities–to generate accurate data for your ESG reports.
Using real-time data collection, you can set up IntelliFinder to monitor and record the environmental impacts, working conditions, and governance practices at your option.
To give an example, you can keep track of your vehicles with GPS signals, saving exact kilometers driven. These numbers can be used to calculate the amount of concretely emitted CO2, avoiding average figures for your reports.
Or you can keep track on how many times you have washed your service vans, looking into your water consumption.
To make a long story short, you can set up task templates with associated forms and checklists to track accurate and relevant data for your ESG report.
This helps you and your subcontractors to collect data, complying with sustainability standards and contribute to transparency and accountability.
Learn how companies use IntelliFinder for managing subcontractors and obtain important documentation for ESG reports among other reporting purposes.
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