For centuries man has been crossing continents with goods and raw materials. But supply chains have never been so large and so complex! Open markets have allowed companies to source materials and outsource production to suppliers in developing and emerging economies.
Despite the distances, this can bring significant benefits to companies in the form of reduced costs, increased profitability, and shareholder value. It also contributes to much-needed economic and social development, resulting in higher living standards for millions of people.
However, if this trade is done without due attention to the environmental, social and governance (ESG) performance of suppliers, companies expose themselves to immense operational and reputational risks. The impacts on people's lives and the environment can also be substantial and severe.
Society's scrutiny of ESG practices has forced companies to adapt. Today, every organization is required to commit to sustainability at its headquarters, at its subsidiaries, and in its supply chain.
Always improving
Competition is good. But have you ever thought that pressure on cost and efficiency can force suppliers to violate their own ESG standards to meet buyers' business requirements? Companies should counter these failures by using their purchasing power to help multiply good ESG practices, especially in small and medium enterprises (SMEs). By sharing knowledge we add strength!
Long Relationships, Great Values
Supply chain managers must think beyond short-term financial gains. They need to build relationships that can add value in the long term, throughout the supply chain. Ideally, sustainability issues should be incorporated into the company's purchasing practices. Organizations that adopt ESG practices in supply chain management can offer benefits and add value to their business. Want examples?
1) Anticipation and risk management, since risk is distributed among different actors.
2) Increased efficiency and profitability as a result of greater environmental responsibility.
3) Reduced operational risks, such as supply interruption, cost increase, and lack of access to key raw materials.
4) Reduced costs, increased efficiency and productivity.
5) Better working conditions, which can reduce turnover and improve quality and reliability.
6) Protection of the brand and corporate values, improved reputation, and increased consumer loyalty.
7) Increased product innovation discovered by capable suppliers.
8) Potential increase in investments and shareholder value, exemplified by leading companies with good supply chain management.
How about being part of this winning team that grows by helping others to grow?
SB SUSTAINABLE BUSINESS SOLUTIONS is an ESG Tech. Today recognized as the only automated, data-driven solution for external risk monitoring and materiality analysis to serve your company and your supply chain.
With ESG DATA INTELLIGENCE, we capture data that becomes information for decision making as well as monitoring for the financial market with audited evidence.
We have a team of professionals that encompasses the areas of Auditing, Consulting, Risk Advisory, ESG Performance Procurement, Value Chain and specialists from various industries and sectors with extensive experience and business knowledge!
