Future of Sourcing has recently published an article on Four Resolutions for Supply Chain ESG Management. Why is ESG important in the supply chain? ”ESG factors influence a multitude of critical decisions – from where people invest to where they work. Indeed, 42% of consumers say they will only buy from brands that align with their values. ”
Since 60%-90% of the average company’s ESG footprint & greenhouse-gas emissions come from a company’s supply chain, (also mentioned in mone of my earlier blogs) it would be reckless not to vet your suppliers.
The 4 ESG supply chain considerations Riskonnect CEO Jim Wetekamp is sharing to proactively supporting the ESG performance of a company are;
- Be More Open About Reporting ESG Risks
- Disclose ESG Metrics in Line With Industry Peers
- Find a Way to Track Hard-to-Find Metrics Like Supplier Diversity
- Tap Technology to Improve ESG Governance and Risk Management
I would like to go deeper into the diversity piece, as I believe many supply chain leaders underestimate the impact an inclusive supply chain can have on the overall supply chain ESG metrics.
As mentioned in the article, diversity, equity and inclusion (DE&I) is a key part of the social element of ESG. But having a diverse and inclusive supply chain is not only supporting the Social pillar of the ESG agenda, but also Environmental & Governance.
How?
Environmental – with diverse owned businesses usually being small to medium sized and local businesses – most pillars are supported, respectively reduced;
•Waste & Pollution
•Greenhouse gas emission
•Climate Change
Governance – as diverse owned businesses ususally also hire more diverse individuals, it also has huge impact on the wealth of the local communities;
•Executive remuneration
•Donations & political lobbying
•Board diversity & Structure
Want to know how you can also build your inclusive supply chain with more diverse owned suppliers. Reach out.
Read the whole report from Future of Sourcing here: https://futureofsourcing.com/four-resolutions-for-supply-chain-esg-management