How to Improve Your Supply Chain Sustainability
06 April 2022 22:10
- Risk Management
- Nexis Diligence™
- Risk & Compliance
- Supply Chain
- Due Diligence
- Due diligence and compliance
As reflected in the rise of environmental, social, and governance (ESG) scores, sustainability is now an outright expectation for a growing number of investors and consumers. Your company’s own ESG score will play an increasing role in its ability to conduct business (e.g., secure a financial loan, solidify beneficial business partnerships, etc.) and attract and retain customers. And eventually, every action your company takes is likely to impact your ESG score for better or worse.
For a lot of companies, however, there may be no greater factor used in determining their ESG score than their supply chains. That’s because the larger and more intricate your supply chain is, the greater the risk it poses in weighing down your score.
The critical importance of a sustainable supply chain
Let’s say your product is the result of a dynamic, global supply chain. You’re sourcing fabric and materials from one corner of the world, conducting assembly of the product in another, and procuring packaging for the product from yet somewhere else. Not to mention, the final product is being delivered to you from the manufacturer, stored in a vendor’s facilities, and then transported again when either sold or needed for brick-and-mortar inventory.
Every link in this supply chain carries some kind of environmental and human impact. Is the fabric you’re sourcing natural or synthetic (and possibly bad for humans and the environment)? Is the method you’re using to source that fabric dangerous for the workers handling it? Does the manufacturer have a history of human rights violations and horrible working conditions? What about your other vendors? Are any of their key personnel on a sanctions list? What’s the carbon footprint of the entire supply chain itself—from sourcing the material to transportation?
In the past, a company could focus more on the quality of the final product and not so much on the intimate details of the supply chain used to produce it, at least when it came to keeping investors and customers happy. But those days are over. And if you don’t have the answers to the questions listed above, you can bet that the firm evaluating your supply chain to determine your ESG score will certainly find them.
Fortunately, with proper due diligence and risk management processes in place, you can hit two birds with one stone. Once you can conduct thorough due diligence into your partners and effectively monitor risk as the supply chain landscape changes, you gain the insights needed to better understand how sustainable your supply chain is today—and the knowledge of what steps you need to take to make it as sustainable as possible tomorrow.
Improving supply chain sustainability through efficient risk management
Nexis solutions for combined due diligence and risk monitoring give you the capabilities to optimize your supply chain sustainability and proactively respond to any development that threatens it.
Learn about current and potential supply chain vendors with Nexis Diligence®
From a partner helping you source raw materials to the logistics company overseeing the transportation of your product, you can conduct in-depth due diligence research on every single vendor that makes up your supply chain ecosystem. Use Nexis Diligence to:
- Check for negative news on individuals and entities within your supply chain
- Uncover relationships and potential signs of beneficial ownership
- Check sanctions, political exposed persons (PEPs), and blacklists
- Review a vendor’s public records and litigation history
- Assess the risk of doing business in a particular country
Monitor potential threats to your supply chain sustainability with Nexis Entity Insight
Nexis Entity Insight enables continuous, real-time risk monitoring to ensure you stay on top of developments that can impact the sustainability of your supply chain. At all times, you maintain visibility into your supply chain partners, be it the suppliers, manufacturers, warehousing, logistics, or even customers.
Using a PESTLE analysis framework (People, Economic, Socio-cultural, Technological, Legal, and Environmental), Nexis Entity Insight lets you rapidly identify emerging risks, so that you can take swift action using insights garnered from our enriched, curated datasets. For example, if your company is considering partnering with a manufacturer in a foreign country you’ve never conducted business in before, the “socio-cultural” segment of the framework can reveal whether child labor is common in that region.
Achieve and maintain a sustainable supply chain with risk management
The more moving parts there are to your supply chain, the more pressing the combined capabilities of Nexis Diligence and Nexis Entity Insight become to ensuring supply chain sustainability. Conduct thorough due diligence and monitor for risk to keep your supply chain as sustainable as possible—and achieve an ESG score you (along with your investors and customers) can be proud of. Get started with improving your supply chain sustainability here.
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