Assent’s Experts Weigh In
The regulatory landscape is constantly evolving, and 2022 will be no exception. With investors and customers adding environmental, social, and governance (ESG) expectations into the equation, it can be more than a full time job to keep up.
To get a sense of what manufacturing professionals need to keep on their radars, we asked three of Assent’s regulatory and sustainability experts for their 2022 predictions.
Neil Smith: “PFAS Are Going to Be the Big Target in Product Compliance.”
Neil Smith, Manager, Compliance & Regulatory
I expect that perfluoroalkyl and polyfluoroalkyl substances (PFAS) are going to be one of the main focus areas for 2022. We are seeing regulators across the major economic areas cracking down on PFAS in products and articles, from reporting obligations up to adding PFAS compounds to banned lists. This is a trend that will continue, with more PFAS families added, covering thousands of CAS numbers for restriction or bans.
PFAS are on the firing line of the European Commission’s Chemical Strategy for Sustainability (CSS), with the stated action to “phas[e] out the use of PFAS in the EU, unless their use is essential.” Manufacturers should be on the lookout for how the European Commission defines “essential use,” as this will be pivotal in understanding which products can be sold on the market.
In addition, the EPA is signalling that the Toxic Substances Control Act (TSCA) will be moving to regulate articles in products, and this will require manufacturers to be able to demonstrate what’s in their supply chains and the articles in their products.
Key Takeaway: When it comes to tracking materials from your supply chain, what you did in 2021 is not going to be enough. Data requirements and the level of depth regulators will be expecting are about to go up an order of magnitude, so focus on your data processes. Having this data is the first and most crucial step to address 2022’s anticipated PFAS challenges.
Learn how to track materials in your supply chain to comply with TSCA Section 6 restrictions. Read Assent’s The TSCA Section 6 Handbook: Your Guide to Compliance.
Ben Gross: “Forced Labor Restrictions Will Be the Biggest Disrupter.”
Ben Gross, Trade Compliance, Legal Counsel
The pandemic will no longer be the biggest disrupter in manufacturing supply chains. New and expanded enforcement on forced labor restrictions, namely the Uyghur Forced Labor Prevention Act (UFLPA) and proposed forced labor sanctions coming out of the EU, will have a significant impact on your ability to purchase parts and access markets in a timely manner.
Regulators for trade compliance will expect organizations to know the country of origin for each and every part, as deep into the supply chain as possible. This piece of data will be more important than ever, with international markets harmonizing their trade compliance enforcement using country of origin and Harmonized Item Description and Coding System (HS) codes.
Key Takeaway: The really important data you’ll need in 2022 is going to be hidden in your supply chain, and human rights violations are some of the most difficult to uncover. Since your greatest risks are often deeper in your supply chain than you can see, you should focus on getting the transparency you need before they become a major media story.
Read the guide: Customs Codes: Reducing Your Exposure to Tariffs & Audits to learn how to start tracking custom codes and country of origin in your supply chain.
Jared Connors: “The Further Merging of Product Compliance and ESG Components.”
Jared Connors, Senior Subject Matter Expert, Corporate Social Responsibility
In 2022, we’re going to see the further merging of product compliance requirements and ESG components in regulations. Regulators and investors now understand that product compliance is another form of corporate social responsibility (CSR).
Manufacturers are already seeing this in the new regulations coming out of the EU. Newer due diligence regulations, like the German Supply Chain Act, which focuses on human rights violations in the supply chain, require you to know what’s in your product and how it’s made — tying your product and supply chain to your impact on human lives around the globe. These regulations are building off of each other, using the momentum to introduce increasingly stringent data requirements.
Even regulatory requirements without an explicit human rights element, like Substances of Concern In articles, as such or in complex objects (Products) (SCIP) database obligations, are designed to protect human health and reduce environmental exposure. In this way, they fall under the umbrella of CSR.
In the past, ESG requirements and product compliance regulations have been viewed as separate drivers, and manufacturers have treated them as siloed business processes. However, the new regulations being rolled out are breaking down that binary distinction.
Key Takeaway: If you aren’t well-versed in ESG already, now is the time to get familiar with what’s material to your operations and a priority for your investors. A materiality assessment, based on a knowledge of how investors are using ESG scoring, is key. Many manufacturers think that sustainability starts within the four walls of their operations, but the largest ESG risks are hidden in their supply chains, meaning that internal and external ESG initiatives should be run in parallel.
How to Get Started
2022 is just getting started, and manufacturers already have a long list of priorities. Without a systematic approach or deep visibility into your supply chain, it is almost impossible to keep up with all the changing regulations and emerging best practices. That’s why Assent’s solution includes a Regulatory team to advise and support your compliance and sustainability program planning. We work with the world’s most sustainable manufacturers and help them grow better and win in their markets — driven by deep expertise from our team of regulatory experts.