The European Union (EU) regulatory requirements, such as the Corporate Sustainability Reporting Directive (CSRD) mandate European companies to report all their emissions, including their scope 3 emissions (emissions associated with their value chains). This includes emissions related to the importation of food and other agricultural commodities. Therefore, European retailers are increasingly requiring suppliers of agricultural commodities to disclose their annual carbon footprints.
The below illustration depicts the flow of carbon requirements through the value chain. First, the EU government sets regulations (i.e., the CSRD) on large companies (i.e., retailers) to disclose sustainability information, including carbon footprints from supply chains. As the CSRD focuses on supply chain transparency, these requirements are pushed down the chain to primary suppliers of agricultural products (i.e., South African farmers and processors). As South African suppliers are at the opposite end of the chain, the onus lies on them to provide information to the other stakeholders.
Figure 1: The flow of carbon footprinting requirements from EU government to SA suppliers
Due to the many linkages in the supply chain, data may get lost or distorted. Therefore, forms of digital recordkeeping and initiatives to enhance supply chain visibility and transparency (such as SIZATrack360) are key and will aid in complying with the CSRD.
SIZATrack360, GHG specialists, and visibility
SIZATrack360, unlike most other programmes, allows for the calculation of a site’s carbon footprint via API integration with third-party independent GHG specialists, namely Confronting Climate Change (CCC) and AgrigateOne. By using SIZATrack360, producers can record their monthly production/input data, and are given the option, after a year’s worth of data has been captured, to have a carbon footprint calculated by an approved third party.
Suppliers also have the option of providing visibility to their markets and/or buyers on their SIZATrack360 data, thereby enhancing transparency and traceability of the supply chain in line with the CSRD, and increasing the credibility of data captured on the platform. Visibility is requested when markets/buyers request visibility on a supplier’s SIZATrack360 data via the MySIZA platform. The supplier may accept or reject the visibility request and reserves the right to revoke the permission at any time if accepted. Once visibility has been granted and a year’s worth of data has been captured, a standardised set of aggregated data becomes visible to linked markets at the click of a button.
Furthermore, in the absence of SIZATrack360, suppliers would be expected to share their production and/or carbon footprint data with each retailer individually due to the absence of an integrated visibility mechanism. The SIZATrack360 visibility option, therefore, also mitigates wasteful duplication and saves valuable time for suppliers.
Overall, the standardisation, digitalisation, and visibility options of the SIZATrack360 recordkeeping programme provide options to calculate a carbon footprint via a third-party GHG specialist to meet market requirements, and enhance total supply chain visibility in line with the CSRD for the benefit of both suppliers and retailers. And the best part is – it avoids duplication, because if all your buyers start to require an additional programme, it will be very costly and time-consuming.
