Compliance & Assurance

Building trust in the air

Is airline corporate sustainability
reporting taking off?

 

As worldwide focus on sustainability intensifies, businesses are facing an ever growing array of new restrictions on the materials they use, the byproducts they produce, the safety of their facilities and other aspects of their operations. The restrictions, both voluntary and involuntary, are emanating from a variety of industry initiatives, and governmental and non-governmental organizations, frequently with overlapping jurisdictions and each with a unique set of reporting requirements. The need to verify adherence to these multiplying standards and restrictions is creating vast new demands on businesses’ compliance and assurance functions.

Assurance services are especially critical at this stage of global efforts to address climate change as cap and trade systems for carbon proliferate and the need for verification of carbon credits exchangeable worldwide accelerates. Assurance is also needed to ensure adherence to sustainable forest management practices such that the biodiversity of forests is maintained, the territorial claims of indigenous and other people are respected and that the lives of forest and neighbouring inhabitants are enhanced. As regulatory and customer demands for disclosure regarding the carbon and water footprints of products increase, there is a growing need for assurance of product claims as well. The expanding breadth of REACH, the European Union directive requiring the registration of chemicals, also calls for assurance services. Other areas where there is likely to be a growing need for assurance include workplace health and safety.

Besides being necessary to ensure compliance, assurance can play a pivotal role in dispelling scepticism arising from some unfounded promotions of products as “green” and some sustainability reports in which elaborate descriptions of green activities mask de facto continuations of business as usual. Reliable assurances of claims that a particular product exacts less of a toll on resources and other aspects of sustainability can help to restore confidence in and support for bona fide sustainable business efforts.

The assurance function further creates an opportunity to detect shortcomings and design methods of improving sustainability practices throughout business operations. Since PwC is involved in every step of the process of achieving the overarching goals of sustainability, including shaping government and NGO regulations and policies, it brings an invaluable perspective to assessing compliance and proposing improvements. And, believing that compliance should not mean merely meeting minimal expectations, PwC views the service as affording an opportunity to set a business’s course anticipating the direction of societal norms.

PwC provides compliance and assurance services for all facets of the sustainability agenda including:

  • Certified emissions reductions
  • Forestry management practices
  • Life-cycle carbon and water footprints
  • REACH, the European Union chemical standards
  • Truth in labelling
  • Stand-alone sustainability reports and sustainability portions of annual reports

Triggers

  • Do your customers believe your claim that your product uses less water in production than competitors’ products?
  • Are your controls just adequate to meet current regulations or are they already anticipating the next level of expectations?
  • Have you included post-use emissions in your products’ carbon footprint totals?
  • Are you confident that your calculations of lifecycle water usage are accurate?
  • Do you know whether the compliance reports you are receiving from facilities around the world are all based on comparable assessments?

Case studies

A French clothier engaged PwC to ensure that its suppliers' environmental and social compliance was as high quality as the company's signature Navy shirts. The assessment PwC provided was integral to helping the client secure several new public sector uniform contracts.

The client’s challenge

To differentiate itself as a premiere vendor and meet the criteria for consideration for new public sector contracts, a French clothing manufacturer needed a third party assessment of its suppliers' environmental and social compliance.

Our approach

  • PwC professionals:
  • Conducted a worldwide social and environmental assessment of suppliers
  • Developed a risk mapping protocol for the selection of new suppliers
  • Assisted the client with evaluating supplier improvements

Benefits to the client

In addition securing significant new public sector contracts with the French postal service and other organisations, the client enhanced the value of key partnerships.

PwC worked with a Scandinavian industrial group to determine whether its China operations were in compliance with its corporate code of conduct. After conducting a site visit to facilities in the Jiangsu province of, China and interviewing management, we delivered a comprehensive report of findings identifying weaknesses and providing recommendations for improvement

A leading financial services provider in South America chose PwC to conduct an independent verification of its sustainability report. Our uniquely comprehensive approach combined validation of existing information with recommendations for streamlining data management systems and minimising emerging risks. The report earned the client a 2008 UN Global Compact Award and significantly increased credibility with stakeholders.

PwC worked with a trade association for building materials manufacturers to ensure that its membership was competitive for EU's high quality tenders which gave preference to organisations with strong environmental and social performance. The ultimate deliverables, completed Environmental and Sanitary Product Declarations (ESPD), were based on a comprehensive life-cycle analysis and industry benchmark.

The client's challenge

To qualify for high quality tenders the Association needed to identify, capture, and communicate the environmental benefits of its member products in Environmental and Sanitary Product Declarations (ESPD) mandated by EU regulations.

Our approach

PwC professionals:

  • Assisted the client in defining three key product families for High Environmental Quality tenders
  • Formulated ESPDs by collecting data from SNMI members and their primary suppliers
  • Performed a confidential benchmark of the environmental impacts of each member company
  • Formulated and implemented a stakeholder communications strategy including targeted outreach to clients, architects, etc. that highlighted the environmental benefits of the three products families

Benefits to the client

The Association benefited in a number of respects. Aside from gaining the competitive advantage of qualifying for High Environmental Quality tenders, association members were able to leverage the life-cycle analysis and other data to drive positive marketplace perception and to implement any necessary operational enhancements.