Environmental sustainability, social responsibility, and corporate governance (ESG) are becoming key priorities for consumers, investors, and regulators. To help small and medium-sized businesses address ESG-related risks in their supply chains, IFS has introduced the IFS ESG Compliance Check—the second solution under the new IFS Supply Chain Solutions brand. 

In this post, Sapfo Laina, Coordinator of the ESG Program and Senior Technical Manager, and Théo Marie, IFS Sustainability Project Manager, share insights into its development, alongside the optional IFS Carbon Footprint module.

Why did IFS develop the ESG Compliance Check?

IFS launched its first ESG Check in 2023 to support businesses responding to rising sustainability expectations. However, as regulations evolved and market pressure increased, it became clear that companies needed a more robust and scalable solution.

The new IFS ESG Compliance Check builds on the original by offering a broader framework and software support. It helps companies navigate ESG topics like supply chain transparency and includes an optional carbon footprint module.

Companies can use the IFS auditXpress Neo Software to identify risks, assess maturity, and plan concrete mitigation measures, without added complexity or cost.

What were the challenges?

One of the main challenges we encountered in developing the check was designing it to suit companies at different points in their sustainability journeys. Some are just starting, while others have already made significant progress.

The result is a flexible tool that assesses a company's ESG maturity and provides a foundation for continuous improvement. The check is not about passing or failing but rather provides a status and indicates in what areas a company can optimise its efforts.

Why now?

The need for ESG awareness continues. Investors are demanding responsible sourcing and sustainable practices, consumers are making value-driven choices, and governments and the EU are introducing regulations that make compliance a legal requirement.

The IFS ESG Compliance Check enables businesses to:

• Demonstrate ESG commitment.
• Identify areas for improvement. 
• Provide verifiable evidence of compliance.

Taking action now helps companies stay competitive and compliant in a rapidly changing landscape. With the IFS ESG Compliance Check, we aim to support them in a practical, efficient and credible way.

How does the ESG Compliance Check support businesses?

The IFS ESG Compliance Check intends to provide a clear view of how effectively a company manages its environmental, social, and governance responsibilities. It supports:

• Greater supply chain transparency.
• Smarter risk management.
• Stronger internal processes.

It also demonstrates to customers, partners, and regulators that your business takes ESG seriously, which enhances trust and credibility. Additionally, it helps ensure compliance with key regulations, like the Corporate Sustainability Due Diligence Directive (CSDDD).

The check can be conducted as a standalone assessment or combined with IFS Audits, without affecting certification. Combining it with other audits or IFS Progress Assessments is also possible.

What are the benefits?

Companies using the IFS ESG Compliance Check gain a deeper understanding of their supply chains. This often leads to:

• More structured data collection.
• Improved and credible stakeholder communication.
• Clear sustainability targets.

These insights help prevent issues, such as human rights violations or environmental damage, supporting more resilient, transparent, and sustainable supply chains.

What is the IFS Carbon Footprint module?

The optional IFS Carbon Footprint module helps companies evaluate their greenhouse gas (GHG) emissions performance. It is a voluntary addition to the IFS ESG Compliance Check that encourages action on climate-related impacts and supports companies looking to reduce their environmental footprint.

Where do we go from here?

The future of the IFS ESG Compliance Check is ambitious. IFS aims to build a global network of trained auditors, making sustainability assessments more accessible across regions and industries.

New tools under the IFS Supply Chain Solutions brand are also in development, all designed to enhance supply chain transparency and sustainable practices.

With these resources, IFS helps businesses reduce their impact, create more sustainable products, and contribute positively to our planet's future.

Learn more about the IFS ESG Compliance Check and how it can support your sustainability goals:

• Tackle ESG-related supply chain risks with the IFS ESG Compliance Check
  
• IFS ESG Compliance Check
• IFS Carbon Footprint module

We encourage readers of this blog to subscribe to the IFS Newsletter or follow IFS on LinkedIn to stay updated on this topic.