ERM and the Society for Corporate Governance (the Society) a non-profit organization dedicated to shaping governance through education, collaboration and advocacy, have co-authored a new white paper - ESG in the Supply Chain: Risks, Opportunities and Disclosure.

The paper examines environmental, social and governance (ESG) issues occurring in global supply chains - including deforestation, land use conversion, water scarcity, human rights, biodiversity loss, and bribery/corruption - and the evolving risks they pose to businesses.

“Recent events unfolding on the world stage such as out-of-control wildfires, allegations of sourcing from forced labor internment camps, and heightened worker health & safety concerns in light of a global pandemic, have reinforced the fact that ESG issues are increasingly impossible for companies to ignore. What used to be seen as a niche consideration has quickly entered the mainstream,” stated Peyun Kok, ERM Senior Consultant and contributor.

ERM and the Society also discuss how companies are using disclosure trends to enhance supply chain transparency, manage risk and push for business performance improvements. The paper concludes with steps to help companies effectively approach ESG risk management in their supply chains with recommendations that can be adapted to fit different company needs.

“Corporate supply chains continue to increase in complexity. Therefore, investors, customers, and other stakeholders expect companies to identify and manage their ESG supply chain risks, impacts and opportunities. These issues can have significant operational, financial and reputational risks if not managed effectively,” noted Margie Flynn, ERM Senior Partner.

While ESG issues present significant risks if left unaddressed, companies are increasingly recognizing the opportunities that can be realized through proactive ESG risk management, including positive brand differentiation, increased innovation, and cost savings, among others. As stakeholder expectations continue to evolve, continuous improvement in ESG management and ongoing dialogue with suppliers will be key to capitalizing on these opportunities and contributing to the achievement of key societal objectives for environmental and social sustainability.

Learn more and download the report