How to Mitigate ESG Risk in Your Supply Chain

Environmental, Social, and Corporate Governance Objectives

Businesses today recognize the importance of having a positive impact on the world and embracing a social purpose beyond simply generating profits. Not only is it the right thing to do, but they face increasing pressure from multiple sources to make greater commitments and improve progress toward their environmental, social, and corporate governance (ESG) objectives.

This pressure is coming from both customers and financial institutions who now often judge companies according to their performance on ESG measures in addition to their product quality and financial metrics. As a result, ESG is now an important element of brand messaging and investor relations.

Also, we are starting to see increased legislative pressure from governments and international entities pushing businesses to act on reducing greenhouse gas (GHG) emissions and preventing environmental degradation or ethical misconduct, not only within their own operations but with their direct and n-tier suppliers and subcontractors throughout their supply chain.

Some of these new regulations will carry stiff penalties: for instance, the consequences of violating Germany’s new Supply Chain Due Diligence Act include fines of up to 2% of a company’s annual global revenue, highlighting just how important it is for executives to adhere to these new rules.

Download and read more to find out the four best practices to adopt and ensure compliance.