ESG Acting in Supply Chains

Working together between ESG (Environmental, Social and Governance) and supply chains has become increasingly important, especially with new regulations being established in Europe and elsewhere in the world. These regulations aim to ensure that companies are adopting sustainable and ethical practices in their operations and throughout their supply chain.

ESG is a set of factors that companies must consider in their operations and investment decisions. They include environmental, social, and governance concerns, such as reducing greenhouse gas emissions, gender and racial diversity and inclusion in the workplace, protecting human rights throughout the supply chain, and transparency in corporate governance practices.

Companies are coming under increasing pressure from investors, regulators and consumers to improve their ESG performance. This has led many companies to take steps to improve their ESG practices and ensure that they are sustainable and ethical.

Regulations are playing an important role in this process as they set clear standards for companies regarding ESG. The European Union, for example, adopted the EU Action Plan on Sustainable Finance in 2018, which established a regulatory framework to encourage the integration of ESG considerations into investment decisions. In addition, the EU is developing specific regulations to ensure that companies are adopting sustainable practices throughout their supply chain.

Companies that want to comply with the new regulations need to work closely with their supply chains. This means that companies need to ensure that their suppliers are adopting sustainable and ethical practices throughout their operations and therefore should be working with suppliers who share their values.

Working together between the ESG and supply chains can bring a number of benefits to companies. These include improvements in company reputation, reduction of operational risks, reduction of costs, and creation of new business opportunities. In addition, working together with suppliers can help create a culture of sustainability throughout the supply chain, which can lead to industry-wide improvements.