Maintaining a healthy, functional supply chain is hard! These days, new standards, regulatory compliance, and different investors’ agendas even make it harder.
No wonder ESG standards and reporting might get sidelined.
The question arises though, why should you care about ESG? With proven operation cost reduction and increased profits when energy and water efficiency programs are being executed, there is no doubt that practicing sustainability and contributing to the global effort comes with benefits.
With COP26 behind us, it seems a great idea to build a proper ESG program to attract quality investors, and save time and resources.
The truth is, anyone can start – here are some tips on how to supercharge your business just by applying easy to use ESG standards and attract more investors while you are at it . . .
1) Increase supply chain transparency
The first step for any company looking to improve its ESG performance is ensuring that supply chain partners are held accountable for potential risks and issues before they have a chance to get out of hand. The best way to do that is through what’s known as enterprise-wide sustainability reporting. This entails making all supply chain players aware of their individual responsibilities, as well as providing them with an avenue to report incidents or emerging risks in real-time. In addition, supply chains should be equipped with systems designed to monitor critical environmental and social factors like natural resource depletion, waste management, and human rights abuses, among others. Supply chain partners must then work together on finding solutions to each issue identified. As these partnerships form, companies will begin to see both short-term cost savings and long-term profit opportunities stemming from more efficient operations—ultimately helping them maximize their supply chain security even further down the line.
2) Improve risk management
A platform designed to report on sustainability and supply chain risks can be a useful tool for businesses looking to improve their risk management. A dedicated platform allows users to integrate multiple data sources, visualize insights and make adjustments based on new information. The integration of supply chain data, for example, can be a powerful way for companies to gain visibility into their products’ journey from end to end. For those who prioritize social responsibility in their purchasing decisions, a platform that reports on supplier performance across key sustainable development goals (SDGs) such as climate change mitigation and gender equality is increasingly important. Accessing industry-wide knowledge around issues such as human rights or environmental protection is another valuable aspect of supply chain reporting platforms. Transparency fosters accountability and public awareness; it also gives supply chains with already strong track records a competitive advantage when it comes to attracting high-quality suppliers. Companies who demonstrate they are committed to responsible sourcing will have an easier time attracting more responsible partners along their supply chains.
3) Attract investors
It’s about time for more businesses to begin implementing ESG strategies. Implementing these strategies will not only help attract investors, but it can also make your supply chain more secure, which is something that every company wants. Applying simple and effective ESG strategies doesn’t require a lot of work—you simply need to develop a reporting platform and tell your story in a way that makes sense to potential investors. For example, if you are a farm-to-table food supplier who takes pride in how you grow to produce and how you treat employees well, you should be telling those stories on social media platforms and on your website; then, be sure to include them when speaking with potential clients or investors. If a supply chain disaster occurs at one of your facilities or there’s an outbreak of food-borne illness associated with one of your products, tell investors why you decided to implement certain ESG principles before things went wrong. The results might surprise you!
Applying ESG standards is a win-win
It may reduce supply chain risk and exposure, attract more investors and employees, and in case of a crisis it shows that you have nothing to hide. Most importantly: It makes sense for every company. Why? Because environmental, social and governance issues are often systemic issues. And these kinds of problems need systemic solutions. If we want supply chains that are more resilient in case of a crisis or an economic downturn, then companies must take action today!
Want to know how it can be easily done? Learn more here