From our practice: How do we help suppliers of large companies that are indirectly affected by ESG reporting?

We helped a medium-sized IT company, which is a supplier of the Volkswagen Group, to set up internal policies and to fill in the Supplier Self-Assessment Questionnaire (SAQ or S-rating), which some car companies, as well as other large companies, are starting to require from their suppliers. If suppliers do not meet the minimum sustainability requirements, the car companies will stop working with them.

This is a small company of up to 100 employees, which will not be required to carry out ESG sustainability reporting itself under the new EU legislation, but is a Tier 1 supplier to the Volkswagen Group and therefore needs to have an overview of its ESG data and internal policies in place on sustainability topics required by the customer. This information must then be reported specifically through the SAQ.

At Frank Bold Advisory, we drafted the company's environmental policy and modified the code of ethics to comply with Volkswagen's minimum requirements and subsequently assisted in the completion of the SAQ. Based on the company's assessment, we then helped it address the identified gaps. The result was a positive evaluation and the ability to place new orders with Volkswagen without restrictions.

“Even a small company that is part of the supply chain has to deal with sustainability and ESG reporting indirectly. If you want to maintain your position in the buyer-supply chain, we will be happy to help you with your buyers' requirements," advises Frank Bold reporting consultant David Janků.