Global focus on ESG in the supply chain – insights into supply chain management of Environmental, Social and Governance requirements and trends both locally and globally

Abstract

In our increasingly interconnected world, responsible business operation has become a normal, critical part of doing business for virtually all industries. Consumers, investors, and other company stakeholders are demanding businesses take responsibility for their current and future impacts on people and the environment. When assessing the role corporations play in a more sustainable future, many turn their focus to Environmental, Social and Governance (ESG) factors that help define and measure sustainable business. Given the wide variety of topics encompassed in ESG, companies often identify which are material, or prioritised by company stakeholders. Quantitative and qualitative information for material ESG topics is often reported using a standard or framework such as the Task Force on Climate-related Financial Disclosures; Taskforce on Nature-related Financial Disclosures; Sustainability Accounting Standards Board; the Global Reporting Initiative and the Carbon Disclosure Project (CDP), along with other region-specific standards. One reporting challenge includes extending ESG strategies and data collection to a company’s value chain. By including ESG-related requirements in service contracts or pre-qualification metrics, expectations can be clearly communicated and data aggregation becomes simpler. Engaging with vendors on the importance of material topics and providing educational tools and opportunities is necessary for accurate data collection. Benchmarking companies against their peers allows organisations to make informed decisions to continue or halt business relationships. Every company’s approach to ESG will look different, but protecting the business’s reputation and customer expectations is critical to continuous operations. Outcomes: understanding different components of ESG. Recognition of the types of reporting disclosure frameworks. Best practices with contractors and suppliers.