Dr. Richard Scholz

Head of Impact Analysis

Dear Readers,

Last month EU member states agreed upon a common supply chain law: the Corporate Sustainability Due Diligence Directive (CSDDD, or CS3D in short). The CS3D is expected to apply to companies from January 1, 2028. Until the directive is transposed into national law, the German Supply Chain Act (LkSG) applies to companies with more than 1,000 employees and a registered office or permanent establishment in Germany. WifOR is already preparing for the requirements at EU level so that companies can build on currently available solutions when the CS3D comes into force.

How do these two supply chain laws differ? And how can companies become forerunners by taking a proactive approach? Read more here.

Risk analysis and prioritization using Impact Valuation

A key component of both supply chain laws is risk analysis and prioritization – in order to define targeted preventative and rectification measures. Using a macroeconomic model, WifOR's Impact Analysis identifies social and environmental hotspots along the global supply chain based on purchasing data. The results are initially expressed as physical variables, such as the number of accidents at work or the tons of CO₂ emitted. But to enable comparison and the prioritization of impacts – as required by the LkSG – the following step is to assess impacts on society and the environment in monetary units.

Using coefficients, known as Impact Valuation Factors, the damage caused by occupational accidents and greenhouse gases can be expressed in euros. This methodical approach enables the impact of different social and environmental indicators to be compared with one another. As a result, the areas with the greatest negative impact can be categorized – establishing a data-based foundation for prioritizing measures. Thereby, findings support more sustainable decisions and facilitate enhanced, effective risk management. Discover more about Impact Valuation here.

Achieving requirements with the WifOR Sustainability Impact Tool (WISIT)

WifOR has developed a solution for companies looking to independently carry out risk analysis and prioritization: WISIT. The tool includes a German Supply Chain Law (LkSG) feature that supports companies to analyze and report in accordance with the legislation's requirements. It enables risks along the supply chain to be identified, analyzed and prioritized. The results are provided in a format that can be transferred directly into the final LkSG reporting documents. Watch the video to find out how companies can meet the LkSG requirements with the help of WISIT.

Best wishes,

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