In this article, we’ll explain what an LCA certification is, why it is important, and the options your company could pursue to prove LCA compliant.

Is it Possible to Get a LCA Certification?

Sustainability is slowly becoming one of the most pivotal topics for businesses to cover if they want to prove successful worldwide, which means a wide variety of certifications will be required to demonstrate their commitment to eco-friendly practices – such as by acquiring an LCA certification.

However, obtaining an LCA certification may not be as simple as one might think – seeing as there is no universally accepted certification, much like there is no standardised ESG certification.

LCA refers to the evaluation method used to determine the environmental impact of a product or service. 

💡 The main goal of an LCA assessment is to help companies improve their design process to be more eco-friendly and create a more efficient and environmentally product to reduce the emissions created by said product in the long-term.

LCAs play a role in revealing how much pollution or waste is created by a productor service, and can help businesses to get started on their sustainability journey by highlighting the potential improvements to be made.

In 2 minutes, find out what a life cycle analysis (LCA) is, what it involves, and the benefits of carrying out an LCA.

To read more about LCA : 

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What is LCA (Life Cycle Assessment)?

Conducting an LCA assessment can allow your business to:

Compare & contrast the environmental impact of various products

Easily comply with environmental regulations

Reduce the environmental impact of an existing product

💡 Popular examples of LCA in action include determining how to make the packaging for a product more sustainable by comparing the use of plastic, glass and other materials – in addition to building materials used in construction by determining which materials will equate to a lower carbon footprint. 

Clearly Define Goals – It is important to determine which goals are most essential to reduce the environmental impact of the product – such as energy or water usage. This can help to create attainable goals to mitigate further emissions from the product.

Life Cycle Inventory (LCI) – This refers to collecting data on the energy, water, and materials required to determine the amount of waste created during each stage of life of the product. 

Life Cycle Impact Assessment (LCIA) – This refers to evaluating the potential environmental impacts of these inputs and outputs.

Interpreting the Data – Once all of the information regarding the product has been collected, it’s important to analyze the data to develop an effective sustainability plan moving forward. 

👉 Almost everyone can benefit from LCA, including the manufacturers, public agencies, and manufacturers – as LCA can provide indispensable information regarding the current sustainability of your products and services to allow for better decision making to improve them in the future.

There are several reasons why conducting an LCA assessment is worthwhile to your business, such as by helping to make more eco-friendly products, reducing emissions long-term, and boosting your brand reputation.

💡 Conducting a LCA assessment is one of the best ways to demonstrate your company’s commitment to environmental reform while also helping to improve your product to appeal to newer, more sustainability-savvy consumers.

Think of LCA as going to the doctor for an annual checkup: it’s an opportunity to find what’s working well and what adjustments can be made to improve the overall efficacy of your company’s product.

Here are some of the reasons why LCA is important:

Identify High Emissive Areas in Your Business – LCA can help your company to better understand its industrial processes and determine which areas are most crucial to cut back on, such as transportation emissions or how the materials required to make the product are sourced. This can allow your business to rectify its current business model to be more eco-friendly in the long-term.

Design More Eco-Friendly Products – Up to 46% of people say that they are purchasing sustainable products to minimise their individual impact on the environment, accounting for nearly half of the general consumer market. Finding solutions to develop a more eco-friendly design could prove not only beneficial for the planet, but for your business – as you’ll gain the ability to attract sustainably conscious consumers.

Reduce GHG Emissions in Landfill – According to the EPA, landfills account for a whopping total of 17% of greenhouse gas emissions, and much of that is attributed to the waste created by throwing out single-use products and other daily cosmetic products. If more companies were to conduct an LCA assessment, they would have greater insight on how to reduce the emissions created by products after they’re disposed of in landfills. 

Cut Back on Operational Costs – Oftentimes, an LCA assessment will reveal inefficiencies in the manufacturing of your products – which can allow for improved processing to ultimately cut back on operational costs such as utility or water bills. 

Comply with Environmental Regulations – These days, it can be challenging for companies to ensure consistent compliance with current and future regulations – but remaining aware of LCA can help businesses to stay one-step ahead of these requirements. 

Demonstrate Your Company’s Commitment to Sustainability – Providing an LCA for your products can allow for more tangible and thoughtful commentary in your annual sustainability reports to communicate your genuine efforts to reduce the environmental impact of your products. This is especially important seeing as transparency and accountability are becoming increasingly imperative in the business world to ensure stakeholder engagement.

👉 Overall, LCA is important as it can help companies to appeal to sustainable consumers, comply with environmental regulations, and illustrate a genuine effort to reduce their impact on the environment.

Similar to ESG, there is no single universal LCA certification – but there are many options for your business to be certified for its LCA practices. 

💡 Since there is no universal LCA certification, companies and individual professionals will often refer to other LCA trainings or certifications to demonstrate a proficient LCA methodology.

If there were a standardised LCA certification, it would allow for greater credibility and consistency to adopt sustainable business practices for the LCA impact created by products worldwide.

Here are some of the reasons why having no universal certification for LCA could prove challenging: 

Since there is no universal LCA certification, professionals and organisations alike rebound to use different methodologies and softwares that could yield various results – making it challenging to determine whether someone’s LCA methodology is proficient or not.

Think of how SAT and ACT scores are used as a way to gauge someone’s test taking skills to enter college in the United States – without these scores, colleges would have to use a student’s GPA for admission. This would be an unfair baseline comparison to use since high schools across the country offer different levels of education. In this sense, LCA is missing the equivalent of the SAT or ACT.

If a universal LCA certification were to exist, it would be easier to provide stakeholders with consistent evidence of a functional LCA methodology in place. 

However, since there isn’t, it can be challenging to verify an existing LCA methodology. This can require multiple professionals with expertise in LCA needing to validate the existing plan – which can take both time and money away from the company. 

Without a universal LCA certification, a barrier remains in allowing LCA to go global – as multinational companies and industries around the world will lack a standardised certification that can apply for cross-border sustainability initiatives.

In addition to this, globally renowned businesses will often need to acquire more than one LCA certification – as it’s likely that one certification will prove more worthwhile in one region of the world and could deem itself next-to-useless in another. 

The table below will further depict the struggles of lacking a universal LCA certification:

<table border="1" cellpadding="10" cellspacing="0">
  <thead>
    <tr>
      <th>Problem</th>
      <th>Description</th>
    </tr>
  </thead>
  <tbody>
    <tr>
      <td>Inconsistent Standards and Methodologies</td>
      <td>Without a universal LCA certification, various methodologies are used, leading to inconsistent results. This makes it difficult to compare LCAs across sectors and regions.</td>
    </tr>
    <tr>
      <td>Difficulty in Verifying Credibility</td>
      <td>The lack of a universal certification makes it harder to assess whether a practitioner has the necessary expertise, leading to differing levels of quality and credibility in LCA studies.</td>
    </tr>
    <tr>
      <td>Fragmentation of Certifications</td>
      <td>Multiple certifications focus on different aspects of LCA without harmonisation, which creates confusion for companies and professionals deciding which certification to pursue.</td>
    </tr>
    <tr>
      <td>Challenges in Global Implementation</td>
      <td>Different countries prioritise specific environmental issues, making global implementation of LCA more complex without a standard certification to unify efforts.</td>
    </tr>
    <tr>
      <td>Limited Accountability</td>
      <td>Without universal oversight, LCA results may be less reliable, allowing companies to potentially misrepresent their environmental impact or engage in greenwashing.</td>
    </tr>
    <tr>
      <td>Barriers to Wider Adoption</td>
      <td>The complexity and fragmented nature of current LCA certifications hinder adoption, especially for smaller companies. A universal certification could simplify the process and encourage broader usage.</td>
    </tr>
  </tbody>
</table>



What can your company do to prove you are LCA certified?

There are a wide variety of certifications and LCA training that your company can pursue in order to demonstrate your compliance with LCA – such as by obtaining an LCACP, EDP, or various ISO certifications.

Here are some of the trainings and certifications your business can use to demonstrate you are LCA certified:

Acquire a Certified Life Cycle Assessment Professional (LCACP) – This LCA certification is offered by the American Center for Life Cycle Assessment (ACLCA), an is geared towards professionals who wants to be certified for their LCA methodologies – much like a language teacher would want to be certified for their teaching techniques. However, this certification requires previous experience in LCA – and those applying for the certification must take an LCA course and pass the exam. Overall, it may not be suitable for businesses – but rather for individual professionals.

Provide an EPD – An Environmental Product Disclosure, or an EPD, can quantify the  environmental information about the life cycle of a product. Overall, an EPD can serve as one of the most useful LCA certifications – as it’s one of the closest certifications to a universal certification for LCA.

ISO 14040 & ISO 14044 – This ISO certification, alongside ISO 14041, ISO 14042, and ISO 14043, which could be used as supplementary certification – provides an all encompassing overview for sufficient LCA practices. The benefit of acquiring an ISO 14040 or ISO 14044 certification is that it allows various organisations to be recognised for their LCA procedures worldwide.

Product Environmental Footprint (PEF) Certification – Similar to the PEF initiative developed by the European Union, this LCA certification can prove that companies are complying with the EU’s environmental standards via LCA. However, while this certification is good for companies based in the European Union – it may not be the best for businesses based outside of the EU.

Greenhouse Gas Protocol LCA Certification – Provided by the globally recognised GHG Protocol, this training and certification can help companies be certified in terms of the carbon footprint and other GHG-related environmental impacts. The overarching benefit of an LCA training certification from the Greenhouse Gas Protocol over other LCA training and certifications, such as from GaBi or SimaPro, is that the GHG Protocol is well-known around the world.

Conduct an LCA Assessment – As this isn’t considered a certification of any sort, it would require your company declaring the results of your LCA assessment and subsequent actions taken to utilise the data analyzed in your next sustainability report – which then may need to be audited to ensure credibility. 

👉 If you’re looking for a more in-depth article on how to conduct an LCA assessment, be sure to read our article here. 

💡 It’s important to remember that these various certifications and trainings each focus on different components related to LCA – meaning that it may prove useful to acquire more than one certification to demonstrate your company’s well-rounded approach to LCA. 

Ultimately, there is no universal LCA certification – but there are a wide variety of LCA certifications and training available for your company to pursue in order to prove LCA compliance. 

Remember, pursuing an LCA certification often requires conducting an LCA assessment to begin with – something Greenly can help you with.

If reading this article on if it’s possible to get an LCA certification has made you interested in reducing your carbon emissions to further fight against climate change – Greenly can help you!

Aligning your business to comply with sustainability initiatives such as LCA can be challenging, but don’t worry – Greenly is here to help. Click here to schedule a demo to see how Greenly can help you find ways to improve energy efficiency and decrease the dependency on fossil fuels in your own company. 

Greenly can help you make an environmental change for the better, starting with a carbon footprint assessment to know how much carbon emissions your company produces.


Click here to learn more about Greenly and how we can help you reduce your carbon footprint.

In this article, we’ll explain what Walmart Project Gigaton is, how it has helped to reduce greenhouse gas emissions, and how other companies could lead by Walmart’s example.

What is Walmart Project Gigaton?

Known as one of one of the hallmark discount department stores in the United States, not many of us would think of Walmart as being one of the most sustainable companies to shop at – given their cheap quality products with questionable durability.

However, maybe we should think of Walmart as a leading company in terms of sustainability – seeing as their Walmart Project Gigaton has already been wildly successful.

Walmart's Project Gigaton is a sustainability initiative aimed at reducing one billion metric tons of greenhouse gas emissions from its global supply chain before 2030. 

💡 Essentially, the name, “Walmart Project Gigaton” is derived from Walmart’s overall goal to reduce one billion metric tons of GHG emissions, which equates to one gigaton.

The main goal of Walmart’s Project Gigaton is to encourage suppliers to adjust their actions to align with the needs of climate change and reduce greenhouse gas emissions worldwide.

Project Gigaton is a sustainability program inviting suppliers and organizations to join Walmart in committing to reduce greenhouse gas emissions resulting from their operations and supply chains. The goal of this initiative is to reduce emissions in the supply chain 1 gigaton by 2030, that’s like the equivalent of removing 211 million cars off the road for a year. Find out more about Project Gigaton at www.walmartsustainabilityhub.com

Walmart’s Project Gigaton: What is a gigaton?

Here are the main areas in which suppliers are encouraged to adapt their activities under Walmart’s Project Gigaton:

Having launched back in 2017, Walmart’s Project Gigaton has already been deemed as a success for its effectiveness to reduce carbon emissions across their supply chain across the world. 

As a result, many media outlets have praised Walmart’s sustainability efforts and have used Walmart’s Project Gigaton as an example of how other companies in a similar position can aspire to set ambitious sustainability goals and effectively achieve them. 

👉 Walmart Project Gigaton is a primary example of how large corporations based in the United States with worldwide operations can make a tangible difference in their carbon footprint.

Why is Walmart’s Project Gigaton important?

Walmart Project Gigaton is important as it demonstrates to other large businesses across the world that it is indeed possible to encourage your suppliers to reduce their greenhouse gas emissions and make industrial processes more efficient and sustainable.


💡 In fact, as of February 2024 – Walmart hit their emission reduction goal after acquiring nearly 6,000 suppliers to reduce, mitigate, or sequester 1 billion metric tons of greenhouse gas emissions.

Walmart Project Gigaton isn’t just good for the planet, but for our global economy – as it allows customers to feel good about their discount products they purchase at Walmart in addition to helping suppliers save money in their business as a result of improved energy efficiency.

Here are just a few reasons why Walmart Project Gigaton is crucial in the midst of climate change:

Reduce Emissions Worldwide – Walmart’s Project Gigaton has already helped to reduce 1 billion metric tons of GHG emissions, and it can also inspire other suppliers and large organisations to do the same. 

Influence Global Supply Chains – Walmart is one of the most well-known retail stores in the United States, meaning that their effort to curate more create sustainable practices across various industries could influence other global business to decarbonise their own supply chains.

Ensure Compliance – International treaties such as the Paris Climate Agreement can be challenging to adhere to, but sustainability initiatives such as Walmart’s Project Gigaton can help suppliers around the world comply with international climate treaties and future environmental regulations.  

Reduce Operational Costs – Walmart Project Gigaton promotes energy efficiency, and in turn – can allow suppliers to enjoy cost savings by dipping their toes into the world of sustainable finance while also driving environmental benefits.

Promote Leadership in Corporate Responsibility – Walmart's commitment to Project Gigaton demonstrates unwavering commitment to Corporate Social Responsibility (CSR), and can encourage other large organisations to do the same.

👉 Walmart’s Project Gigaton can inspire other companies to develop globally effective initiatives, as there is now an existing blueprint for large corporations to be equally as successful in engaging their suppliers to be more sustainable.

How does Walmart’s Project Gigaton work?

Walmart Project Gigaton works by engaging suppliers to reduce their emissions across several key areas including energy usage, waste, packaging, agriculture, transportation emissions, and product usage.


💡 As of 2024, over 5,900 suppliers have signed onto Walmart Project Gigaton – it is now considered one of the largest private-sector climate action projects in the world.

Walmart commits to removing a BILLION metric tons of carbon emissions from their supply chain by 2030. Watch this 4 minute interview with SVP of Sustainability to learn how YOU can get involved.

    How does Walmart plans to remove a GIGATON (a billion metric tons) of carbon emissions by 2030?
    How can suppliers can join Walmart to participate in this new initiative?
    What sustainability resources are available for suppliers?
    How can suppliers track their progress?


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Walmart's Project Gigaton: How to Get Involved

In order to attract as many suppliers to Walmart Project Gigaton as possible, the famous discount department store curated the Walmart Sustainability Hub – where they offer designated tool kits for their suppliers to provide them with a step-by-step guide on how to work together to achieve the overarching goal of reducing, avoiding, or sequestering 1 billion metric tons of greenhouse gas emissions.

Step-by-Step Guide: Walmart Project Gigaton

Here is a breakdown of how Walmart Project Gigaton works:

Supplier Engagement – Across the global supply chain, Walmart encourages suppliers to join Walmart Project gigaton. 

Suppliers Choose Key Areas of Focus – Suppliers can choose the most relevant areas to focus on to reduce their environmental impact, such as by reducing energy usage by switching to the use of renewable energy or upgrading to energy efficient technologies, improving agricultural practices such as by implementing climate smart farming tactics, reducing waste such as by mitigating the use of single use plastic or encouraging customers to avoid food waste, improving packing to be more sustainable can help suppliers to further reduce waste, mitigating deforestation by promoting the importance of ethical sourcing and ensuring that the supplier’s business activities do not contribute to wildfires, developing new innovative product designs to use less energy-intensive materials in the production process and reduce the emissions created over the course of its lifecycle. 

Track & Share Progress – Walmart provides various tools and resources to help their suppliers committed to Walmart Project Gigaton to effectively and efficiently report their progress in reducing greenhouse gas emissions.

Public Reports by Walmart – In order to showcase the success of suppliers committed to Walmart Project Gigaton, the discount department store shares an annual public progress report.

💡 In addition to guiding suppliers to rectify their current business models to become more sustainable and avoid excess greenhouse gas emissions, Walmart Project Gigaton has teamed up with various organisations to flesh out their sustainability initiatives.

Walmart has teamed up with the following organisations to develop Walmart Project Gigaton:

Giga Guru status is an effort on behalf of Walmart to showcase suppliers with exceptional dedication to reducing their environmental impact.

💡 Think of Giga Guru status in a similar light to being valedictorian of your graduating class – it is a status reserved for people who not only achieved their requirements, but went above and beyond.

Suppliers can qualify for Giga Guru status by:

Setting environmental targets that are measurable and manageable in-line with the SBTi  

Reporting their progress in at least three of the six main areas affiliated with the Walmart Gigaton Project 

Revealing progress on scope 1 and scope 2 emissions which are 95% complete for each scope & details on how they achieved these emission reduction targets

Sharing their efforts towards renewable electricity consumption 

Detailing which areas of scope 3 emissions are most relevant to their business activities  

Overall, Giga Guru status can help suppliers to further reduce their environmental footprint and demonstrate leadership in sustainability. 

👉 Ultimately, Walmart Project Gigaton reveals how a collaborative effort can prove effective in reducing our environmental impact in addition to cutting back on costly operational costs caused by high energy usage, waste, and more.

The table below will further depict the requirements to comply with Walmart's Project Gigaton:

<table border="1" cellpadding="10">
  <tr>
    <th>Requirement</th>
    <th>Description</th>
  </tr>
  <tr>
    <td>Supplier Registration</td>
    <td>Suppliers must register through Walmart's Sustainability Hub to participate in Project Gigaton.</td>
  </tr>
  <tr>
    <td>Emission Reduction Target</td>
    <td>Suppliers need to set a goal for reducing their greenhouse gas emissions within one of six focus areas: energy, nature, waste, packaging, transportation, or product use.</td>
  </tr>
  <tr>
    <td>Action Plan</td>
    <td>Suppliers are required to develop and submit a clear action plan that outlines how they will meet their emission reduction targets.</td>
  </tr>
  <tr>
    <td>Reporting Progress</td>
    <td>Suppliers must regularly report on their progress through Walmart’s platform, including tracking metrics and emission reductions.</td>
  </tr>
  <tr>
    <td>Collaboration with Walmart</td>
    <td>Suppliers will work in collaboration with Walmart to access resources, tools, and guidance to help them achieve their sustainability goals.</td>
  </tr>
  <tr>
    <td>Recognition and Incentives</td>
    <td>Suppliers who achieve significant progress can receive recognition through Walmart’s public sustainability reports or awards.</td>
  </tr>
</table>


How can suppliers get involved with Walmart Project Gigaton?

Companies that are considered as suppliers can easily get involved with Walmart Project Gigaton by using their three-step program to get started. 

💡 As a part of their efforts to streamline the importance of sustainability, Walmart has made signing up for Walmart Project Gigaton extremely user-friendly.

If your company is to sign up to report its environmental impact under Walmart Project Gigaton, it can only reap positive benefits such as increased clientele and business transparency – as you will then be able to associate your business with a climate action program with a household name.

Here are the three steps necessary to get your company started with Walmart Project Gigaton:  

Sign Up – First, suppliers should visit the Walmart Sustainability Hub to create a Walmart Project Gigaton account. 

Set Your Emission Reduction Target – Once your account is set up, companies should work internally to develop an appropriate emissions reduction goal. These goals should be “SMART”, meaning they should be specific, measurable, achievable, relevant,and timely. This step can often prove most challenging, but working with a carbon accounting company like Greenly can make determining these goals easier.

Share & Report Your Progress – Suppliers joining Walmart Project Gigaton will be subject to report their progress annually via their official Walmart Project Gigaton account. In addition to this, Walmart helps to make reporting easier by emailing suppliers affiliated with Walmart Project Gigaton specific information on what will be required on pre-mandated reporting dates. This allows suppliers to prepare well in advance for compliance and boost the chances of Walmart Project Gigaton’s continued success.

👉 Remember, in order to join Walmart Project Gigaton – companies will need a Retail Link account, which will serve as their all-in-one stop to manage, update, and view their sustainability goals.

How can your company develop something like Walmart Project Gigaton?

Your company can also develop a supplier emission reduction program like Walmart Project Gigaton by:

Creating a Sustainability Platform & Toolkit – If your company develops a platform similar to Walmart’s Sustainability Platform, it can help encourage suppliers to join your movement towards net-zero emissions with less hesitation. 

Partnering with Accredited Organisations – Walmart’s Project Gigaton is effective in part due to collaborating with the SBTi, WWF, and EDF. In order to develop an effective guide for suppliers to follow and reduce their emissions effectively, expanding your network could prove useful. 

Incentivise Participation – Offering your suppliers recognition for their emission reduction efforts could encourage them to participate in your new sustainability initiative, as it’s likely that your company has a larger audience to promote their products or services than the suppliers themselves.

Overall, Walmart Project Gigaton has proven to be a successful sustainability initiative which has already achieved its main goal six years in advance – demonstrating that setting ambitious emission reduction goals isn’t too tall of an order, and that we could all implement similar mechanisms to mitigate our environmental impact worldwide.

If reading this article about Walmart Project Gigaton has made you interested in reducing your carbon emissions to further fight against climate change – Greenly can help you!

Aligning your business to comply with sustainability initiatives such as Walmart Project Gigaton can be challenging, but don’t worry – Greenly is here to help. Click here to schedule a demo to see how Greenly can help you find ways to improve energy efficiency and decrease the dependency on fossil fuels in your own company. 

In this article, we’ll explore how the VSoTr sets new standards for ethical and environmentally responsible business practices, outlining the key obligations it places on companies and the broader implications for Swiss industries.

What is the Swiss Supply Chain Act (VSoTr)?

Many companies may not realise that their everyday operations, from sourcing minerals to manufacturing goods, can contribute to both human rights violations and environmental harm. Conflict minerals, child labor, and environmental degradation are often deeply embedded in global supply chains, making it challenging for businesses to track their impact. The Swiss Supply Chain Act (VSoTr), which came into force on January 1, 2022, aims to address these critical issues.

The VSoTr requires Swiss companies to adopt robust due diligence measures across their supply chains, particularly in the sourcing of conflict minerals (like tin, tantalum, tungsten, and gold) and ensuring that child labor is not involved. The Act also pushes companies to be transparent about how they source raw materials, encouraging businesses to not only protect people but also safeguard the environment.

👉 In this article, we’ll explore how the VSoTr sets new standards for ethical and environmentally responsible business practices, outlining the key obligations it places on companies and the broader implications for Swiss industries.

The Swiss Supply Chain Act (VSoTr), also known as the Ordinance on Due Diligence and Transparency (ODDT), came into force on January 1, 2022. The Act is rooted in the “For Responsible Business – to Protect People and the Environment” initiative, also referred to as the Corporate Responsibility Initiative, which sought to ensure that Swiss companies adhere to global standards not only for human rights but also for environmental protection. While the initial Corporate Responsibility Initiative was rejected in a 2020 referendum, the indirect counter-proposal - what we now know as the VSoT - automatically became law in 2022.

The VSoTr is designed to hold Swiss companies accountable for human rights abuses and, to a certain extent, environmental harm within their supply chains. Its primary focus is on two key areas:

Conflict minerals: Companies must ensure that they are not sourcing materials such as tin, tantalum, tungsten, or gold from conflict-affected or high-risk areas.

Child labor: The regulation mandates that businesses assess their supply chains for risks related to child labor, ensuring that no products or services they offer are linked to exploitative practices.

Although the VSoTr’s focus is predominantly on human rights, it also indirectly addresses environmental concerns. By enforcing responsible sourcing and traceability systems, the Act encourages companies to avoid contributing to environmental degradation associated with conflict mining. For example, responsible mining practices often reduce harmful impacts like deforestation, water pollution, and land degradation. However, it’s important to note that the VSoTr does not impose direct environmental regulations or comprehensive environmental impact assessments. The environmental benefits come as a secondary outcome of the broader due diligence efforts required for conflict minerals.

The Swiss Supply Chain Act (VSoTr) applies to companies headquartered in Switzerland or with their principal place of business in Switzerland, focusing on those involved in the procurement, import, or processing of minerals and metals from conflict-affected or high-risk areas. The Act primarily targets materials containing tin, tantalum, tungsten, or gold - commonly referred to as 3TG - as well as companies at risk of sourcing goods produced through child labor. 

The VSoTr impacts a broad range of industries, from mining to electronics, requiring companies in these sectors to evaluate their supply chains for risks associated with conflict minerals or child labor. For example, any company that uses 3TG in its products - whether through direct import or via suppliers - must ensure that these materials are responsibly sourced.

However, small and medium-sized enterprises (SMEs) are exempt from the Act's due diligence and reporting obligations, provided they meet specific criteria. Companies with fewer than 250 employees or that fall below certain financial thresholds are generally not required to comply with the VSoTr unless there is a significant risk of child labor in their supply chain.

The Act also grants exemptions to companies that already comply with internationally recognised standards. For example, companies that adhere to the OECD Due Diligence Guidance for Responsible Supply Chains or the EU Conflict Minerals Regulation may be exempt from additional reporting, as these frameworks already align with the goals of the VSoTr. 

Companies are also exempt if the quantity of imported minerals or metals remains below the set thresholds established by the ordinance, reducing the burden for businesses with minimal involvement in high-risk sourcing.

Warlords, soldiers, and child laborers all toil over a mineral you've never even heard of. Coltan is a conflict mineral in nearly every cell phone, laptop, and electronic device. It's also tied to the deaths of over 5 million people in Congo since 1990.

Hosted by Alison Suroosh Alvi | Originally released in 2011 at http://vice.com

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Conflict Minerals, Rebels and Child Soldiers in Congo with Suroosh Alvi

The Swiss Supply Chain Act (VSoTr) imposes due diligence obligations on companies operating in high-risk supply chains. These obligations are designed to ensure that Swiss businesses uphold international human rights standards and take appropriate steps to manage risks across their supply chains. 

The VSoTr requires companies to establish due diligence frameworks that help identify and mitigate risks related to human rights abuses and environmental harm. Key elements of the due diligence process include:

Risk identification and assessment: Companies must actively investigate their supply chains to determine if conflict minerals or child labor are involved. This requires tracing the source of materials and identifying suppliers from conflict-affected or high-risk areas.

Supply chain policies: Businesses are required to implement and communicate clear policies on responsible sourcing, ensuring that suppliers comply with ethical standards. These policies must be integrated into contracts with suppliers to reinforce the company’s commitment to due diligence.

Supply chain traceability: The VSoTr mandates that companies establish systems to trace the origin of minerals and materials within their supply chains. This is particularly important for 3TG minerals, where the risk of contributing to conflict is high. Companies must document key details such as the country of origin, supplier names, and in some cases even the smelters or refineries processing these materials.

Risk management and mitigation: When risks are identified, companies must take appropriate measures to mitigate them. This could involve supplier audits, on-site inspections, or collaborating with certification schemes that verify responsible sourcing.

In addition to due diligence, the VSoTr requires businesses to provide annual reports outlining how they have fulfilled their obligations. These reports must include detailed information about the steps taken to manage risks, trace materials, and ensure compliance with supply chain policies.

The reporting obligation is central to the transparency required by the Act. It not only demonstrates a company’s commitment to ethical practices but also holds them accountable by making their actions public. The reports are available to the public and relevant authorities, reinforcing the company’s accountability.

Failure to comply with the VSoTr’s due diligence and reporting requirements can lead to penalties, including reputational damage and potential legal action. Although the Act doesn’t impose strict financial penalties, the reputational risks of non-compliance, especially for companies with global supply chains, can be significant.

Risk Management Strategies Under the VSoTr

The Swiss Supply Chain Act (VSoTr) places a strong emphasis on risk management, requiring companies to take proactive steps to prevent human rights violations and environmental harm in their supply chains. Effective risk management strategies are central to identifying potential issues early, ensuring compliance, and maintaining ethical operations. 

One of the key risk management tools mandated by the VSoTr is the creation of grievance mechanisms. These systems allow employees, suppliers, and external stakeholders to report any concerns linked to child labor, conflict minerals, or other risks within the supply chain. 

By creating accessible reporting channels, companies can address potential violations before they escalate into more significant problems. These mechanisms also help integrate transparency and accountability throughout the supply chain.

To manage risks businesses are also encouraged to conduct on-site inspections and supplier audits. These audits help verify that suppliers adhere to ethical standards and comply with the company's responsible sourcing policies. Regular audits can uncover issues such as the use of child labor or unsafe working conditions, allowing companies to take appropriate corrective actions. This approach is especially important when working with suppliers in high-risk or conflict-affected areas.

Supplier certifications and recognised standards

Another crucial element of risk management is working with suppliers that are certified under internationally recognised standards. The VSoTr encourages companies to use certification schemes, such as those provided by the OECD Due Diligence Guidance or EU Conflict Minerals Regulation, to verify the ethical sourcing of materials. These standards help businesses mitigate risks by ensuring that their suppliers follow due diligence practices and responsible sourcing protocols.

In some cases, companies may not have the internal capability to manage complex supply chain risks. Collaborating with third-party experts can provide companies with specialised support in managing and assessing risks. 

👉 By implementing the strategies above, companies can minimise the risks associated with human rights violations and environmental damage in their supply chains. An effective risk management system not only helps ensure compliance with the VSoTr but also strengthens a company's reputation for ethical business practices. 

Challenges and Opportunities for Businesses

The Swiss Supply Chain Act (VSoTr) introduces both challenges and opportunities for businesses operating in Switzerland, particularly for those managing complex, global supply chains. However, while compliance with the Act may require significant investment in terms of time and resources, it also offers the opportunity to strengthen business practices and enhance reputational value.

<table border="1" cellpadding="10" cellspacing="0">
  <thead>
    <tr>
      <th>Challenge</th>
      <th>Details</th>
      <th>Proposed Solution</th>
    </tr>
  </thead>
  <tbody>
    <tr>
      <td>Complexity of global supply chains</td>
      <td>Managing multi-tiered global supply chains makes it difficult to trace the origins of materials such as conflict minerals or ensure labor standards, especially in high-risk areas.</td>
      <td>Implement robust traceability systems and enhance internal processes for tracking and managing risk across the supply chain.</td>
    </tr>
    <tr>
      <td>Cost of compliance</td>
      <td>Complying with the VSoTr requires investment in audits, traceability systems, and third-party assessments, which can be particularly burdensome for smaller companies.</td>
      <td>Adopt digital platforms to streamline audits and reporting, and seek external certification to align with international standards, reducing long-term costs.</td>
    </tr>
    <tr>
      <td>Reputational risks</td>
      <td>Non-compliance with the VSoTr or failure to meet its transparency requirements can lead to significant reputational damage, attracting scrutiny from regulators and the public.</td>
      <td>Develop clear supply chain policies and transparent reporting to show stakeholders your commitment to ethical sourcing, which can also enhance brand reputation.</td>
    </tr>
  </tbody>
</table>


However, the VSoTr is also an opportunity for companies that embrace it, benefits include:  

Improved supply chain resilience: By enforcing stricter due diligence practices, the VSoTr encourages companies to build more resilient and transparent supply chains. This not only helps mitigate risks related to conflict minerals and child labor but also strengthens long-term operational stability. Companies that invest in ethical sourcing are better positioned to manage disruptions and avoid potential legal or reputational issues. 

Enhanced brand reputation: Companies that comply with the VSoTr can use their high ethical standards to stand out from the competition. Demonstrating a commitment to responsible sourcing and human rights protection can enhance brand value, attract sustainability-conscious customers, and build greater trust among stakeholders.

Innovation and competitive advantage: Compliance with the VSoTr often requires innovation in how companies manage their supply chains. This could involve adopting new technologies for supply chain traceability or integrating third-party platforms to streamline risk management. This ultimately helps companies not only stay ahead of regulatory demands but also position themselves as leaders in corporate responsibility, gaining a competitive edge in the marketplace.

Global alignment with ESG goals: By complying with the VSoTr, companies also align themselves with broader Environmental, Social, and Governance (ESG) goals, which are becoming increasingly important to investors and consumers. As businesses are held to higher ethical and environmental standards, those that meet these requirements can attract more investment and capitalise on growing consumer demand for sustainable products.

Although the Swiss Supply Chain Act (VSoTr) primarily focuses on human rights - particularly conflict minerals and child labor  - it also plays a role in promoting more environmentally sustainable business practices. By enforcing responsible sourcing and requiring companies to trace the origins of materials, the Act indirectly encourages environmentally responsible behaviors.

Reduced environmental degradation: Companies sourcing conflict minerals are encouraged to work with suppliers that stick to sustainable mining practices, which can reduce harmful environmental impacts like deforestation, water contamination, and habitat destruction.

Encouragement of recycling: The VSoTr also promotes the use of recycled materials as an alternative to mining new resources, contributing to a reduction in resource extraction and its associated environmental impact.

Alignment with ESG goals: By incorporating responsible sourcing into their operations, companies can better align with broader ESG objectives, promoting sustainability across the supply chain.

While the VSoTr does not impose direct environmental regulations, its focus on ethical sourcing can contribute to reducing the environmental footprint of businesses, especially those working with high-risk materials.

To meet the requirements of the Swiss Supply Chain Act (VSoTr), companies need to take proactive measures to ensure their supply chains are transparent, ethical, and aligned with the Act’s due diligence standards. Below are some practical steps businesses can take to ensure compliance: 

The first step for companies is to develop a clear supply chain policy that outlines their commitment to ethical sourcing, human rights, and environmental standards. This policy should be communicated to all suppliers and incorporated into supplier contracts.

Companies need to establish a robust traceability system to track the origins of materials, particularly for minerals like tin, tantalum, tungsten, and gold. This system should capture key information, including the names and locations of suppliers, the country of origin of the materials, and, when applicable, the smelters or refineries involved.

Businesses must carry out thorough risk assessments to identify potential human rights and environmental risks within their supply chains. This involves evaluating suppliers based on their location, industry, and the materials they provide, particularly in high-risk areas where conflict minerals or child labor might be involved.

Maintaining open communication and collaboration with suppliers is important. Companies should work closely with their suppliers to ensure compliance with ethical standards and identify opportunities for improvement. Engaging with suppliers to provide training, support for certifications, and regular assessments can help ensure long-term compliance.

To verify compliance and ensure that suppliers are meeting the necessary standards, companies can conduct third-party audits. These audits can provide an independent assessment of suppliers’ adherence to ethical sourcing practices, ensuring that due diligence efforts are properly implemented.

One of the key obligations under the VSoTr is annual reporting. Companies must provide detailed reports that outline how they are managing risks in their supply chains, including the results of their due diligence efforts, traceability systems, and any actions taken to mitigate risks. These reports must be transparent and publicly available.

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Greenly - The go-to carbon accounting platform for your business!

At Greenly, we understand that businesses are under increasing pressure to ensure that their operations, including their supply chains, are not only ethical but also environmentally sustainable. Greenly specialises in helping companies reduce their carbon emissions and build sustainable supply chains that contribute to a more responsible future.

Carbon and Supply Chain Sustainability Solutions

Greenly provides businesses with the tools and expertise needed to measure, track, and reduce carbon emissions across their entire supply chain. Our platform is designed to streamline emissions management while helping companies meet broader sustainability goals:

Emissions Monitoring: Our platform allows you to track Scope 1, 2, and 3 emissions throughout your supply chain. This means you’ll have visibility over both direct emissions and those generated by suppliers, enabling you to make informed decisions that reduce your overall environmental impact.

Lifecycle Assessment (LCA): We help companies perform lifecycle assessments to understand the carbon footprint of their products from raw material extraction to end-of-life disposal. This insight allows businesses to target the most carbon-intensive stages of their operations and implement strategies to reduce their impact.

Sustainable Supply Chain Strategies: By analysing emissions across the supply chain, Greenly helps businesses identify ways to engage with suppliers and encourage more sustainable practices. Whether you’re looking to lower emissions through improved resource efficiency or by sourcing from more environmentally friendly partners, we provide the insights needed to build a greener supply chain.

At Greenly, we recognise that no two companies are the same. That’s why we work closely with you to develop a sustainability strategy that aligns with your unique business model and supply chain structure. Whether you aim to meet emissions reduction targets or improve your overall sustainability credentials, we offer practical, actionable solutions to help you achieve your goals.

👉 At Greenly, we focus on helping businesses reduce their carbon footprint and make their supply chains more sustainable. We provide the tools and expertise you need to make meaningful progress toward a low-carbon future. Get in touch with us today to start your sustainability journey.

Kara joined the team at Greenly in 2023 as SEO copywriter for the UK market.

Kara Anderson - Greenly

Kara Anderson holds an undergraduate law degree and a master’s degree in international law from the University of Glasgow and the University of Aberdeen, specialising in human rights and EU law, where she developed strong research and writing skills. After working at Ernst & Young as part of their audit graduate scheme and gaining experience in analytics, she transitioned to advertising, working with major global brands like American Express and Dove.
In 2023, Kara joined Greenly as a writer, focusing on sustainability and climate-related topics for the UK market. Her work spans a wide range of environmental issues, including climate science, sustainable development, and climate policy. Collaborating with climate scientists, Kara has produced data-driven investigations into key climate challenges. With a passion for international politics, sustainable development, and climate change science, she continues to build her expertise in the field and is currently pursuing further training in journalism.

Copywriter specialising in environmental thematics

Ines Gendre is a copywriter specialising in environmental issues. She joined Greenly's team in 2022.

Ines Gendre

Ines Gendre holds a master’s degree in marketing and began her career in the fast-moving consumer goods (FMCG) industry. After retraining, she joined Greenly in 2022 as a copywriter specializing in environmental issues. Ines brings her expertise to companies and individuals seeking to understand the challenges of climate change, the green transition, and their impact on society and the economy. Trained in key tools for developing climate strategies - such as Carbon Assessments, Life Cycle Analysis (LCA), and carbon offsetting - she will begin studying political science at Oxford University in England in January 2025.

After seeking opportunities to put her various creative passions to good use, she joined Greenly in mid 2022 as SEO copywriter for the U.S. blog to provide her American perspective on the climate change issues we face today.

Stephanie Safdie - Greenly

Stephanie completed a bachelor's degree in English & Multimedia in 2020 at the University of Maryland College Park. She previously worked as a social media content video creator and freelance copywriter. After seeking opportunities to put her various creative passions to good use, she joined Greenly in mid 2022 as SEO copywriter for the U.S. blog to provide her American perspective on the climate change issues we face today. 

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