ESG Readiness Assessment

Under the CSRD, companies need to provide supply chain information on a wide range of sustainability topics, including:

• How production affects the environment such as causing climate change and negatively impacting water, biodiversity, causing chemical waste, etc
• How their products affect the environment, such as how easy they are to be recycled rather than sent to landfill
• The nature of resources used
• How human resources are used, such as health and safety provisions
• The treatment of human rights, such as child and forced labor not being used
• The supplier’s ethics and social and environmental practices

Sofeast’s supply chain management team follow a 3-step process:

1. We ask the supplier for typical documents on each of those topics. We can do that for 45 USD per factory. We give them a list of “examples of typical documents” for each topic, so they have an understanding of what is needed.
2. Based on the supplier’s response, we do a document review and comment on them. We charge 45 USD per hour for that review. In most cases, it only takes 1 or 2 hours, as most Chinese suppliers have very few documents to submit. The objective of step 2 is to evaluate if the supplier has at least a “minimum level” of systems or at least a policy. On each of the topics. If they have nothing on a certain topic, step 2 allows us to recommend not to assess the supplier on that topic. When a supplier has nothing to show on a few topics, it can typically save 1 man-day of audit time (and fees).
3. Finally, we assess the factory on-site. That plan needs to be formulated after the document review (step 2), as sometimes this will not be required. For example, if the supplier is unable to send us a list of environmental aspects & impacts, there is no need to evaluate them against ISO 14001, as there is a 100% certainty they will get a very low score… If there is no system in place, there is no need to send someone to check that system on-site.