To manage ESG supply chain risks more effectively, companies need to analyze risk dimensions and devise practical solutions.
ESG risks in the Supply Chain
ESG risks continue to evolve rapidly and as a result, a multi-pronged strategy is required to effectively manage and mitigate the full range of ESG supply chain risks that exist. A new three-part webinar series will demystify the different facets of ESG risk and highlight best practice solutions that can mitigate specific risks under the ESG umbrella.
With the growing number of regulations governing the ESG space today, organizations that ignore or underestimate the importance of ESG can face serious repercussions, including fines and potentially severe reputational damage.
On the positive side, board leaders who pay close attention to ESG considerations are often associated with improved brand reputation, improved shareholder satisfaction, improved talent recruitment and retention, and superior We enjoy a variety of tangible benefits, including financial performance.
Spotlight on E
Our first webinar will discuss the E of ESG, with a focus on environmental considerations. Our panelists take a deep dive into some of the most pressing environmental challenges and hotspots that exist around the world today. One key example is the ecological crime ecosystem that persists in the Amazon. The region’s environmental illicit network is linked to a variety of crimes, including fraud, money laundering, and drug trafficking.
Our panelists continue to highlight the highly lucrative nature of the environmental crime. The illegal wildlife trade, for example, is estimated to be worth around US$20 billion annually. Add the illegal timber trade to this, and it jumps to a staggering $250 billion a year or more.
Companies recognize the importance of environmental considerations, but view these risks as secondary to some other risks. An online survey of webinar audience participants revealed that 36.9% believed that her E in her ESG was the most important factor in a third-party risk program. However, a larger proportion (40%) consider environmental risks and considerations to be important, but second only to social and/or governance concerns.
Spotlight on S
The social component of ESG considerations, the S in ESG, covers a wide range of issues, from human rights abuses, forced labour, and modern slavery to employment practices, health and safety concerns, and more.
This social aspect of ESG tends to dominate global news. Our panelists take a closer look at how these risks differ from traditional third-party supply chain risks and then discuss some of the biggest challenges companies face in addressing societal risks. dig into It can often be hidden in global supply chains.
This second webinar will also cover common obstacles to compliance. Supply He asked about the biggest challenges in addressing social risks across the chain and found that the largest percentage of webinar viewers (44.7%) said, “To get quality data on potential risks.”
Our panelists will continue to discuss best practices for identifying and mitigating societal risks. Suggestions ranged from advice on robust screening and how to conduct effective due diligence to the importance of continuous monitoring in the face of the evolving nature of this risk.
Spotlight on G
Looking to the G within ESG, the webinar explores some of the biggest challenges and best practices in today’s governance risk space. Governance-related issues are broad and encompass the essence of corporate culture and values, compliance, and how decisions are made within an organization.
This last point is important because one of the key aspects of managing third-party risk is proper assessment and record-keeping. This includes why and how decisions are made. Businesses are under increasing pressure to understand exactly what their third parties are doing. Compliance programs need to be scaled up and must consider all the significant risks facing companies.
Panelists will provide an overview of the most important regulations and directives to be aware of in this space, and offer advice on best practices and tools to help businesses identify and manage governance risks in third-party networks.
Now is the Time to Tackle ESG Risks
There are many best practices that organizations can implement immediately. Adopt a risk-based approach to due diligence. Fully understand the nature and operations of each third party. Evaluate risk on an ongoing basis.
But here are the key points: ESG risks are the current third-party risks. It is no longer a new or future risk, but a “here and now” challenge. Addressing ESG risks is complex, but better than nothing.
