Supplier.io, the market-leading SaaS provider of supplier diversity and ESG data and management solutions, today released a new Supplier ESG Risk Report. This comprehensive report analyzes the environmental, social and governance (ESG) threat landscape for over 200 leading companies. The findings show that most businesses face significant ESG risks, emphasizing the need for greater supply chain transparency to enhance resilience and sustainability.
“Supplier intelligence is critical as increasing evidence shows that ESG risks directly impact the bottom line. Without clear visibility into supplier practices, businesses are exposed to significant reputational, operational, and financial threats,” said Aylin Basom, CEO of Supplier.io. “Our report highlights the tangible risks of environmental issues, poor working conditions, and inadequate supply chain management. By shining a light on these pervasive issues, Supplier.io provides critical insights and empowers organizations to understand and benchmark areas of supply chain risk, strengthen mitigation strategies, and make progress towards improved supply chain resilience.”
The analysis, based on ESG risk assessment data spanning 11 industries, was collected using impak Analytics’ proprietary tool, which is renowned for its best-in-class methodology. Supplier.io, in partnership with impak Analytics, analyzed the data against sector relevant UN’s Sustainable Development Goals (SDGs) targets, while aligning with important materiality standards like the Global Reporting Initiative (GRI) and Sustainability Accounting Standards Board (SASB) to ensure objectivity and comparability. The methodology utilizes a double materiality assessment for enhances risk discovery and impact analysis.
Key findings include:
- Environmental Risk: Environmental risks are a pressing concern, with Greenhouse Gas (GHG) emissions standing out as the most significant threat, affecting 73% of companies. Additionally, 72% of companies face risks from lack of managing their products’ environmental and social impacts throughout the product lifecycle. Water withdrawal and consumption and air pollution pose substantial challenges, underscoring a broad spectrum of environmental vulnerabilities.
- Social Risk: 54% of companies encounter worker health and safety risks, which can lead to labor unrest, strikes, production delays or disruptions.
- Governance Risk: Supply chain reporting mandates like the Corporate Sustainability Reporting Directive (CSRD) mean that businesses must ramp up their supply chain oversight and report on ESG impact. Yet, 45% of companies are exposed to significant risks due to inadequate supply chain transparency and management.
The report emphasizes the critical need for businesses to apply the same rigor to ESG reporting as they do to financial metrics to reduce stakeholder and regulatory scrutiny. It also outlines several strategies procurement teams can leverage to ensure responsible sourcing, such as implementing robust codes of conduct, finding alternative sourcing strategies, and conducting comprehensive risk assessments to foster transparency, drive positive outcomes, and empower suppliers with opportunities for mutual benefit.
To access the complete Supplier ESG Risk Report for more insights and analysis to mitigate risk and strengthen procurement due diligence, visit Supplier ESG Risk: Analysis and Mitigation Strategies for Procurement Teams | Supplier.io™.
Supplier.io will discuss the findings, insights, and actionable strategies uncovered in the Supplier ESG Risk Report in a webinar on August 1, 2024. Register online to join at Uncovering ESG Risks in Modern Supply Chains | Supplier.io™.
About Supplier.io
Supplier.io is the market-leading SaaS provider of supplier diversity and ESG data and management solutions. The platform enables organizations to track and manage responsible sourcing, providing valuable data and insights that drive business growth, and the ability to measure social, economic and environmental impact. Equipped with unparalleled data intelligence, superior technology, and expert guidance, Supplier.io’s customers can establish and advance their supplier diversity and ESG initiatives effectively and strategically. For more information, visit www.supplier.io.