In our previous article, we discussed how technology can help companies comply with the EU Directive 2014/95. While this article focused on the respect of human rights in the supply chain, today we will dig into environmental issues covered by the EU Directive and explore what kind of technology is needed to comply.
Environmental vs. Human Rights reporting
To ensure the respect of human rights throughout the entire supply chains, companies must make sure that each of their suppliers—whether direct tier 1 down to tier 5 or 6—has the relevant social responsibility certifications, such as SA8000, BSCI, or Sedex, among others.
However, when it comes to reporting on environmental matters, companies must be able to either capture environmental KPIs like water or energy usage, or ensure their suppliers have environmental certifications, such as sustainable palm oil or animal welfare.
Therefore, beyond the requirements we outlined previously, an effective solution for assessing suppliers’ environmental compliance also requires:
- The ability to capture several types of certifications related to human rights, environment and sustainability, etc.
- Extended reporting on all types of certifications with aggregated data, status, and alerts
- The capacity to capture custom information about suppliers, such as environmental KPIs
Technology to cover key EU Directive requirements
The EU Directive covers a wide range of issues, making the requirements for effective compliance fairly diverse. This means it is especially important to leverage the right technology to ensure it addresses each requirement, while remaining scalable and valuable. A good solution will meet the following criteria:
- SaaS-based, to provide 24/7 accessibility by multiple users across the world.
- Include solid collaborative functionalities built with responsive design, to provide each supplier with a private workspace while enabling sharing of information.
- Leverage graph technology, which focuses on connections, to manage multiple tiers of suppliers with complex supply chains.
- Leverage a variety of data storage technologies, to store data on suppliers, facilities, certifications, and products. For example, the platform must leverage graph technology for storing supply chain connections, RDBMS for storing metadata, and NoSQL for unstructured data.
- Offer an Open API strategy, to integrate with external systems including certification databases or supplier management software. This ensures that third parties can easily connect to and exchange data with the existing platform. In addition, the platform should support standards such as GS1 to help internal and external systems communicate more efficiently.
- Embeds a powerful map visualization system and reporting engine, to offer analytical capabilities, aggregate raw data, and provide effective insights and KPIs.
By meeting these requirements, a technology solution will be in a good position to effectively support company compliance with the EU Directive, both in terms of human rights as well as environmental reporting. In our next article, we will examine other types of technologies capable of extending the reach of regulatory compliance.