Supply Chain Sustainability - an imperative for your ESG strategy
MACK BHATIA
Manage your ESG risks with SIOChain - Supply chain sustainability management system
Supply chain sustainability is a key component of your ESG strategy. Through supplier engagement, supplier recognition, and sustainable procurement, you can continue to improve your business practices and operations to manage risk while increasing productivity and efficiency within the supply chain. By working closely with suppliers, companies can manage their environmental and social impact and position themselves for stronger growth.
Pressure to support sustainability in supply chains is coming from multiple sources, including investors, government, and international bodies; with all of them also being the key drivers pushing companies to embed ESG focused business models and encourage ESG transparency and disclosures.
Executives are the most significant sources of pressure behind corporate commitments to supply chain sustainability across all issue areas; and supplier development, supply chain visibility, and environmental impact reduction are the three most common ways companies are putting their supply chain sustainability promises into practice.
Why is supply chain sustainability important for your business?
Among many reasons, the most important reason is that your ESG strategy and sustainability commitments, beyond your operations, are heavily dependent on your supplier or value chain network. In order to make your ESG strategy successful, it is imperative to engage your suppliers so all can adhere to the sustainability standards.
The second most important reason is to gather data aligned with your ESG metrics. When tracking supply chain sustainability standards, most companies start with data collection. This provides a strong picture of how contractors and suppliers are performing today and allows you to set goals to improve or set up baseline metrics. These metrics and data also contribute to your overall ESG goals or metrics so you can confidently disclose or report on your ESG progress
The third reason is, Investors and stakeholders are concerned about your supply chain sustainability practices and want to ensure that there aren’t any significant material risks associated with your value chain or which can hamper your operations or financials. SASB material map – highlights Supply chain sustainability as one of the key factors with a potential material impact (see here). And so, there is high pressure on executives to support supply chain sustainability (SCS).
Align with your ESG strategy
Your ESG strategy is a guideline to supply chain sustainability and gauging a supply chain's ESG performance level would be relative to the organization's needs within environmental, social, and governance (ESG) activities. Aligning your supply chain strategy with your ESG objectives shares the following benefits:
Manage Reputation Risks:
Getting insights into your supply chain sustainability is crucial as many companies are required to meet regulatory needs in the areas of operations. Tracking environmental and social parameters along the supply chain network helps mitigate reputation risks.
Environmental Data and ESG Metrics:
Gathering data from your supplier network is mandatory to get baseline metrics to improve upon. Government regulations, international bodies, and even investors expect proof that your supply chain network is not a material risk. Engaging your supply chain network also sends a strong signal to all your stakeholders on positive ESG progress.
Showcase Clean Revenues:
Your stakeholders, including the end consumer, wants to know that your revenues are coming from clean sources and not from unethical practices. ESG disclosure frameworks mandate reporting on ESG metrics through your value chain, a lack of which may be a risk to access to capital.
Align with your ESG strategy
SIOChain is a technology platform that
encourages collaboration
among you and your supplier network on sustainability and ESG standards and their adherence.
At its core it solves challenges faced by many (almost all) companies where the ESG teams or supply chain teams do not have the mechanism, tools, or capacity to engage, collaborate or collect data
as needed to meet ESG commitments, this is in the middle of ever-increasing executive and investor pressure.
SIOChain also provides a supplier scoring framework
so you can identify the most sustainable suppliers, share incentives, and vice versa. There is also a fantastic opportunity for you to access a network of green suppliers as they continue to join the SIOChain network.
We encourage you to have a chat with our team and see how
SIOChain, a robust supply chain sustainability management platform can work with you on your ESG success.
Reach out to us
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