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Sustainability Vendor Guide

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GENERAL

Ratings

Sunrise encourages its vendors to participate in, for their market and sector, relevant sustainability ratings. Ratings make a very clear statement on different sustainability engagements of the company and permit metrics that enable comparability which can be a competitive advantage. Furthermore, ratings help companies better anticipate future risks and opportunities, guide mid to long-term strategic thinking, and lead to long-term value creation. Common ratings within the field of sustainability include Ecovadis, CDP and ISS.

Sustainability goals

Companies that fail to act on sustainability issues risk losing investors, as these factors increasingly drive investment strategies globally. Not to mention the reputational damage, compliance costs and the potential loss of business that goes along with it. Sunrise strongly encourages its vendors to practice sustainable business practices, meaning prioritising sustainability issues and making them an integral part of their business by setting time-bound goals. Goals that aim to reduce their environmental impact and improve their social and governance commitments. Companies that do set sustainability goals build the foundation for improved risk management and could positively impact their operations, reputation, society, employees, financial performance, and the environment. Companies that prioritise sustainability issues can attract and retain employees who are passionate about making a positive impact on society and the environment.

Supply Chain transparency

Companies are under pressure from governments, consumers, business partners, NGOs, and other stakeholders to disclose more information about their supply chains, and the reputational cost of failing to meet these demands can be high. When companies demand transparency throughout their supply chains, they can operate more compliantly, reduce business risk, improve brand loyalty, and enhance efficiency. Transparent supply chains create a culture of trust throughout their entire ecosystems and attract like-minded suppliers and partners. A climate of trust and transparency helps in communicating openly with suppliers and fosters lasting partnerships. Most importantly it helps to mitigate risks, protecting a company’s reputation and reduces costs.

Embedded sustainability organisation

Sunrise advocates for sustainability to be embedded throughout an organisation. For smaller companies sustainability initiatives may be driven by employees that champion sustainability topics within their field of work. Sustainable organisations benefit from improved risk management, as by considering sustainability factors, companies can identify and mitigate risks that could impact their operations, reputation, and financial performance. Additionally, companies that prioritise sustainability issues can build trust with stakeholders, including customers, investors, communities, and regulators. It drives innovation as companies can identify new business opportunities, develop new products and services, and improve operational efficiency.

PLANET

Carbon footprint

In 2024 Sunrise will start measuring its vendors carbon footprints within a designated vendor engagement program. If vendors help Sunrise understand their environmental impact, Sunrise can help its vendors to identify areas where they can reduce their carbon emissions. Carbon accounting is set to become increasingly important in the European Union (EU) in the coming years through the Corporate Sustainability Reporting Directive (CSRD). The CSRD will require companies to report their greenhouse gas emissions, including Scope 1, 2, and 3 emissions, and other sustainability metrics. It will help companies comply with regulations and avoid fines. Companies that prioritise sustainability can gain a competitive advantage by appealing to consumers and investors who are increasingly concerned about sustainability and social responsibility.

Net Zero & SBTi

Net Zero is a term used to describe the state where a company’s greenhouse gas emissions are balanced by the amount of greenhouse gases they remove from the atmosphere. This can be achieved by reducing emissions and/or by removing carbon dioxide from the atmosphere through various methods such as reforestation, carbon capture and storage. To help companies set science-based Net Zero targets, the Science Based Targets initiative (SBTi) has developed the Corporate Net Zero Standard. This framework provides guidance to companies on how to set science-based Net Zero targets consistent with limiting global temperature rise to 1.5°C. The Corporate Net Zero Standard prioritises rapid, deep emission reductions by setting near-term targets, in addition to requiring companies to set long-term science-based targets to cut 90% of possible emissions before 2050. To counterbalance the final <10% of residual emissions companies should use permanent carbon removal and storage methods.

How can companies reduce emissions? A company can achieve swift emission reductions by using renewable electricity (which has been a focus in Switzerland for some time), electrifying the corporate fleet or implementing a progressive business travel policy. For most companies, these actions account a minor proportion of their total footprint. To make significant reductions in emissions, strategic actions should be considered. This may include but is not limited to: shifting into lower-emission product or service segments, exploring new geographies for manufacturing, and reinventing processes from the bottom up. Additionally, engaging with vendors in a manner that aligns with sustainability goals facilitates the reduction of emissions throughout the value-chain.

PEOPLE

Human rights

Companies that prioritise human rights issues can develop more sustainable business practices and improve their social and governance practices. By identifying human rights risks, taking steps to address and prevent them, and reporting publicly on their efforts, companies can significantly reduce the risk of contributing to abuses in their supply chains. Children are particularly affected by a wide range of violations, including forced labour. Companies can respect children’s rights in their supply chain by assessing risks of child labour in their upstream supply chains, integrate children’s rights in their policies and management systems, practice active vendor engagement to identify and mitigate the root causes of child labour. A company’s actions and activities should be monitored to track outcomes and progress. Companies can seek guidance from the International Labour Organisation (ILO), UNICEF, and other international organisations on how to effectively develop and implement child labour policies and programs.

GOVERNANCE

Swiss regulatory requirements on child labour and conflict minerals

The Swiss due diligence obligations (DDTrO) entered into force in January 2023, requiring Swiss companies to comply with due diligence and reporting obligations when importing or processing conflict minerals or offering products or services with risks of child labour, which are laid out in the Swiss Code of Obligations. The ordinance requires Switzerland based companies above certain thresholds and that are not exempt from the requirements, to adhere to non-financial reporting and due diligence on the key requirements that include a supply chain policy, a traceability system, a grievance system, and a risk management system.

European ESG regulatory requirements

CSRD

The Corporate Sustainability Reporting Directive (CSRD) is a new EU regulation that requires companies to report on how sustainability issues, such as climate change, impact their business and how their operations affect people and planet. It applies to all large companies and some small and medium enterprises from 2024. The CSRD classifies a large company as one that meets two out of three of the following criteria: more than 250 employees, a turnover of over €40 million and over €20m total assets. These companies will also have to consider information at subsidiary level. The new directive modernises and strengthens the rules concerning the social and environmental information that companies must report. A broader set of large companies, as well as listed SMEs, will now be required to report on sustainability. The new rules will ensure that investors and other stakeholders have access to the information they require to assess the impact of companies on people and the environment. Moreover, investors will be able to assess financial risks and opportunities arising from climate change and other sustainability issues. The first companies will have to apply the new rules for the first time in the 2024 financial year, for reports published in 2025.

CSDDD

The Corporate Sustainability Due Diligence Directive is a proposal by the European Commission to foster sustainable and responsible corporate behaviour and to anchor human rights and environmental considerations in companies’ operations and corporate governance. The directive aims to ensure that businesses address adverse impacts of their actions, including in their value chains inside and outside Europe. The core elements of the directive are identifying, terminating, preventing, mitigating, and accounting for human rights violations and negative environmental impacts in the company’s own operations, their subsidiaries, and their value chains.

ISO certification

The ISO 14001 (Environmental Management) and ISO 50001 (Energy Management System) standards are examples of sustainability-centric ISO standards that can help companies demonstrate their commitment to sustainability practices. It helps companies to reduce risks to its business operations, business continuity and regarding potential fines and reputational damages. The establishment of an environmental management system according to ISO 9001 (Quality Management System) can also lead to cost savings through a more efficient energy and resource management. It increases competitiveness, as it can be on one hand, a formal requirement for an RFX award and, on the other hand, attract investors.