Consumers’ expectations of brands and businesses to embrace greener strategic goals and broader stakeholder support are getting more attention on executive agendas, according to research from supply chain risk management firm Avetta. The firm’s new exec survey finds more companies are looking to improve their Environmental, Social and Governance (ESG) goals.
Avetta’s new report, Extending ESG Best Practices into the Supply Chain: A Review of Leading Organization Approaches, finds 79 percent of companies consider employee health and safety very important and 63 percent say reducing environmental footprint is very important—highlighting the need for companies to have systems in place to obtain and maintain ESG integration goals.
The surveyed companies represent a variety of industries such as facilities management, chemicals, construction, utilities, telecommunications, transport, manufacturing, and food and beverages. One out of four respondents plan to make ESG supply chain issues a part of their organization’s program.
The pandemic has actually increased the importance of supply chains for many corporations because 90 percent of their environmental footprint has been pushed into their supply chain. The paper offers examples of companies that experienced ESG risks, as well as best practices for adopting ESG into every aspect of a business, including:
Setting clear supply chain goals in reports, contracts and governance structures
Assessing, managing and monitoring ESG supply chain risks
Enhancing traceability, transparency and engagement with suppliers
“Avetta is excited to help our clients grow their supply chains to be greener, more diverse and more inclusive,” said Arshad Matin, Avetta president and CEO, in a news release. “Our data shows that over a 10-year period, suppliers in our network experience a 7 percent to 12 percent year-over-year decrease in safety incidents. We look forward to continuing this successful trend in the ESG market.”
Matin led Avetta to join more than 9,500 companies in 145 countries that signed the United Nations Global Compact in 2020, committing to ethical business practices, transparency and protecting human rights.
The survey also finds 87 percent say ESG in the supply chain is important—of which, 39 percent marked it as very important. “While companies recognize the importance of achieving sustainable outcomes, they are less likely to recognize that most of that impact is in their supply chain. This reinstates that supply chain sustainability should be integrated into the company’s broader ESG architecture and not be isolated with the sole oversight of supply chain or procurement functions,” concludes the paper.