Supply Chain Sustainability - Impact on Suppliers
For multinational enterprises (MNEs), ignoring supply chain activities' impact on the climate will no longer be an option as the proposed CY22 Securities and Exchange Commission in March of CY22 go into effect in early CY23. As summarized by PwC, the proposed advance rules will require "disclosure of
- "Prospective risks and material impacts on the business, strategy, and outlook caused by climate change, generally consistent with the Task Force on Climate-Related Financial Disclosures (TCFD) disclosures (e.g., asset risks at a zip code level)"
- "Scope 1 and 2 greenhouse gas (GHG) emissions"
- Scope 3 emissions if material or if the registrant has set a GHG emissions reduction target that includes Scope 3 emissions
- Additional qualitative and quantitative climate risk disclosures, including the financial impacts of severe weather events and other natural conditions and transition activities on line items of the financial statements
- Governance of climate-related risks and risk-management processes."
Since SMMs are integral to their customer’s Scope 3 reporting, the implications are ominous. Large corporations are leveraging the adoption of Industry 4.0 technology, such as Artificial Intelligence and the Industrial Internet of Things (IIoT), to accelerate their reporting of ESG data. SMM must also adopt Industry 4.0 technology and developing a transformation strategy is essential to long-term survival. We recognize that there may be no immediate financial penalty for SMMs delaying adoption. There can, however, be a financial penalty for not leveraging such technology to collect and report data associated with a customer's reporting of ESG compliance data. There will be a robust discussion of SMM and MNE interactions regarding ESG compliance at ACCELERAE2023.