Tackling the 'S' in ESG Supply Chain Risk

Today’s 24/7 news cycle has increased public scrutiny on ESG, with recent events like COP26 drawing global attention. Elsewhere, changes to due diligence legislation mean businesses in the EU are now required to disclose human rights breaches within their supply chains. In this context, the way organisations navigate and respond to the ever-changing risk landscape has never been more important.

In this episode of S-RM Insider, we focus on the 'S', or social criteria, in ESG supply chain risk. Speaking with Associate Director Fabienne de Blois, we delve into the topic and provide practical steps for listeners wanting to understand the complexities surrounding social aspects of their supply chains.

Companies face reputational damage, the loss of shareholder or consumer confidence, and potential litigation when they do not take ESG seriously. Brands must ensure that ESG commitments are well-thought-out, long-term, and realistic, rather than 'performative'. Indeed, accusations of social washing are becoming ever more frequent in the media.

 

"Increasingly for consumer brands, or those that rely on large and diffuse markets, there is a tangible benefit to clearly communicating ESG credentials. The brand benefit of this clear and honest communication, especially when it's coupled with long-term commitments that date back to before January 2020, when ESG (as an umbrella term) really gained momentum, is clear."

Getting ESG communications right can help build trust with consumers and stakeholders, as organisations like H&M and Boohoo have demonstrated through their willingness to face social issues in their supply chains head-on. ESG, however, is about more than just identifying, remediating, and managing risks. Done well, it can support value creation, unlock investment, and enable competitive advantage.

S-RM supports clients globally to identify, manage, and remediate their ESG risks. We work with ESG leads, general counsel, boards, and investment and compliance teams across a range of sectors including finance, FMCG, agribusiness, and energy. Find out more about our ESG practice.