Supply chains may be complex and suppliers remote, but you must know their ESG strategies well
Global company supply chains are becoming increasingly complex as the business world moves across borders and boundaries. Multinationals can have tens of thousands of suppliers and may work with other outsourcers and contractors, making them even tougher to track. And while financial and operational supply chain risks are important to any company, environmental, social and governance (ESG) risks with suppliers can also have a severe impact.
In recent years, food companies have been censured for using fraudulent suppliers, while some of the world’s most glamorous fashion labels have been embroiled in ESG scandals over labour conditions and sweatshop safety. Such ESG risks in your supply chain can have a very immediate impact on your company. While your organisation may not be legally responsible for a supplier’s ESG strategies, your company’s reputation and future can be directly a ected by their actions. As such, it is crucial to oversee your suppliers and their ESG approach.
In this special report, published in partnership with Refinitiv, we consider how risk teams can monitor ESG risk and potential reputational risks in their international supply chain.
We also look at how organisations and their supply chains can avoid falling foul of sanctions and how technology can assist in the fight against financial crime. Now more than ever before, thanks to the marriage of tech and human expertise, organisations have the ability to practice enhanced due diligence.
As Refinitiv’s regional performance director, risk, APAC, Phillip Malcolm explains: “In the past, firms didn’t look at their supply chains from an ESG point of view – it was all about continuity of supply and that was it, as long as business went on. But the world has changed. There is scrutiny on supply chains, scrutiny on who you deal with, from government and NGOs as well as your customers and investors.”
“Investors and stakeholders want to know you’re dealing with the right people, whose values align with theirs. Sending a compliance survey to a supplier is not enough anymore. You have to use technology and the latest tools to scrutinise your supply chain and understand the complete picture, that your suppliers are on the right side of the law, have sound ESG values and practices and won’t expose your firm to unexpected risks.”
Click the link below to download the full report.
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