Investing in ESG is no longer an expense for the world's large companies. It is an opportunity that can bring rivers of money. In less than two decades, ESG investments have reached $35 trillion. Global assets managed in portfolios labeled "ESG" are expected to reach $53 trillion by 2025.

This exponential growth is the result of investors' increasing desire to bet on responsible companies. However, in the digital age, you can lose investors' trust in minutes, and worldwide. That's why it's important to pay attention to every detail of your business, to all partners and contracts. Almost every large company's operations involve a global supply chain. To accurately measure a company's ESG risks in this supply network its end-to-end operations must be considered.


Most ESG rating agencies do not measure companies' ESG performance from the perspective of the global supply chains that support their operations. For example, Bloomberg's ESG measure lists "supply chain" as an item under the "S" (social) pillar. Thus, supply chains are treated separately from other items such as carbon emissions, climate change effects, pollutants, and human rights.

Carbon emissions are another example. Many companies have been successful in reducing emissions from their own operations. Yet the emissions from their partners and customers, known as "Scope 3 emissions," can remain high. ESG rating agencies do not include Scope 3 emissions due to lack of data: only 19% of companies in the manufacturing industry and 22% in the service industry disclose this data.

However, without taking into account a company's entire supply chain, ESG measures fail to reflect the global supply chain networks that large and small companies depend on for their daily operations.


Consumers charge governments, and governments open their eyes to the performance of companies throughout the production chain.

Agencies will have to change their methodologies for measuring supplier impact and link all ESG dimensions to the end-to-end operations of a company's supply chain. In this way, we will see corporate leaders driven to make responsible decisions throughout the supply chain. Those who don't adapt will be left behind.

You too can create a supply chain committed to sustainability. Want to know how?

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