Supply Chain risks jeopardise global performance growth

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Recent research that examined and rated the sustainability performance among several companies provides crucial insights around Ethics, Labour and Human Rights, Sustainable Procurement, and Environment practices processes through different industries and regions.

Supply Chain risks jeopardise global performance growth
Photo by Scott Graham on Unsplash

Despite the unprecedented challenges caused by the pandemic, it brings optimism. When companies foresaw that the short-term economic and business endurance constraints overtook Environment Social Governance (ESG) concerns higher than the corporate agenda, sustainability performance maintained stability primarily across regions and industries and improved in several significant cases.

The escalating development in scoring among organisations in North America, Latin America, Asia, the Middle East and Africa is quite encouraging, whilst Europe confirmed its status as a global sustainable performance leader.

There was a significant improvement in Construction and Light Manufacturing industries achieving growth in overall average scoring. On the other hand, China recorded a modest increase in overall scoring. However, the region stays somewhat behind performing global average performing.

Reassessed companies come out as leaders.

When reassessing several companies, they emerged as established sustainability leaders indicating how deep they have created a sturdy platform to carry out significant reforms whilst driving performance improvement. Moreover, such engagement is essential to boosting impact and fast-tracking the growth of sustainable business practices worldwide.

This sustainable commitment emerging across regions and industries in recent years reflects a developing acknowledgement among companies’ leaders that sustainable practices generate a real competitive improvement to drive performance, build resilience and diminish risk ultimately.

Indeed, it clarifies that Procurement leaders are ever more coming to consider sustainability and resilience the same. Those companies that most efficiently integrated sustainability through their Supply Chains and business operations proved best prepared to overcome the pandemic disruptions.

Yet, Supply Chain vulnerabilities go on falling off concerning Sustainable Procurement, evident underscoring when compared to other topics. According to this research, the SC generates far higher social and environmental costs than internal operations, responsible for more than 80% and over 90% of the average company’s effect on water, land, water, geological and biodiversity resources.

Therefore, the SC is essential to unlocking the full power of any sustainability set. Only by motivating and working with suppliers to incorporate sustainability factors into the Procurement function all over the value chain can the organisation capitalise on meaningful extended outcomes.

Whilst there was moderate development in implementing specific actions aimed to monitor and better sustainability performance across the SC, current sustainable Procurement procedures are still truly deficient across industries and regions.

These facts are sure becoming commonplace, exposing businesses to significant risks, such as global natural disasters, but due to persistent regulations advancement across jurisdictions responsible for setting ever-growing ESG matters.

As global lockdowns decelerated and, in many instances, disrupted the raw materials and finished goods flows around the world, the crisis revealed unpleasant facts concerning society adeptness to dealing with high-impact worldwide events.

Whether sourcing locally or globally, the sustainability of any company depends upon its suppliers’ performance: from immediate associates in the first and second levels of the value chain to those inserted in its topmost leaders. Therefore, by cascading due persistence procedures through the value chain and reinforcing suppliers in incorporating sustainability issues into the Procurement role at every level, companies can enhance sustainable impacts build resilience to drive results.

Conclusion: as a result of the pandemic, leaders have valuable learnings devoted to lessening the escalating climate crisis risks. Organisations must be familiar with their SCs to proactively acquire an intimate familiarity with their supply chains and proactively carry out actions to guarantee that sustainability concerns are included in the Procurement responsibilities throughout the value chain, mitigating risk and enhancing resilience.

Identifying In practice, this means identifying disruptive elements, mapping risk to expose them in advance, and working directly with suppliers to reinforce procedures for pinpointing, moderating and tackling undesirable social and environmental effects in the value chain.

What are valuable pandemic learnings to implement in your Procurement processes?

Dave Food

M: +44 7775 861863


Photo by Scott Graham on Unsplash

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