ESG in Supply Chain: Why It Matters for Sustainable Supply Chain Management
Environmental, Social, and Governance (ESG) and sustainability issues are gaining more attention in India day by day. Financial market regulators have introduced several measures to promote accountability and transparency, including the Business Responsibility and Sustainability Reports (BRSR) requirement for the top 1,000 listed companies and a greater emphasis on third-party verification of sustainability disclosures.
A firm’s sustainability performance is significantly influenced by the supply chain, which includes the flow of goods and services. Right from sourcing raw materials to manufacturing, distribution, and delivery to the end customer.
By incorporating ESG principles into the supply chain, organizations can gain advantages such as risk mitigation, cost savings, regulatory compliance, enhanced reputation, and improved stakeholder relationships.
In this blog, we delve into the importance of ESG in supply chain management and how supplier sustainability assessment verifies that all third-party entities uphold ESG principles that align with the organisation's established standards and values to achieve long-term success
Why ESG in Supply Chain Management Matters for its Sustainability
Integrating ESG principles into the supply chain offers a range of benefits for organisations:-
Environmental Sustainability in Supply Chain Management
-
Green procurement: Prioritise suppliers that demonstrate strong environmental commitments and practices.
-
Energy and emissions reduction: Implement strategies to reduce energy consumption and greenhouse gas emissions across the supply chain.
-
Waste reduction: Promote waste reduction, recycling, and circular economy principles in the supply chain.
-
Sustainable packaging: Opt for eco-friendly packaging materials and design to minimize waste generation.
Social Responsibility in Sustainable Supply Chain
-
Labour standards: Ensure that suppliers adhere to ethical workplace norms, including compliance with the minimum wage, the number of hours an employee can work, and the conditions under which they can do so.
-
Human rights: Evaluate and address human rights risks throughout the supply chain, such as forced labour, child labour, and unsafe working conditions.
-
Diversity and inclusion: Promote diversity and inclusion in the supply chain by collaborating with diverse suppliers and creating equal opportunities for all parties involved.
Governance and Ethics in Supply Chain Sustainability
-
Supply chain transparency: Promote transparency by mapping and tracking the supply chain to ensure insight into supplier behaviour and performance.
-
Ethical sourcing: Adopt policies and practices to prohibit the use of conflict minerals, encourage responsible sourcing of raw materials, and avoid engaging with suppliers involved in unethical business practices.
-
Compliance and risk management: Establish robust mechanisms to ensure compliance with relevant laws, regulations, and industry standards throughout the supply chain.
-
Anti-corruption measures: Implement anti-corruption policies, and due diligence processes to stop bribery and unethical behavior.
How CRIF Synesgy Can Help with ESG Risk Management
Synesgy is a global digital platform, powered by CRIF, that allows firms to access their business partner’s ESG performance within the supply chain.
With Synesgy:
- Access Suppliers on ESG and Implement monitoring tools within the procurement process for transparency.
- Identify and Map ESG Risks in Your Supply Chain.
- Actively Track and Evaluate ESG Risks and Engage Your Suppliers.
Synesgy Improvement and Action Plan
Along with the certificate, the Synesgy report is issued, which provides the complete analysis of the individual Environmental, Social, Governance, and related sections of the industry sector to which it belongs that contribute to compose the ESG score and relative ranking.
