Executive
Summary

Copyright © 2022
Argüden Governance Academy

SUPPLY CHAIN SUSTAINABILITY

Supply chains are critical links that connect an organization’s inputs to its outputs. Many companies’ greatest sustainability risks and opportunities are in the supply chain. However, sustainability efforts of many companies are limited to measuring the sustainability of their own business operations and do not extend these efforts to their suppliers and customers.

Leading companies in sustainability accept responsibility throughout their value chains and work with their suppliers to implement sustainability initiatives on a wider playing field. This may involve utilizing their purchasing power to encourage, audit, collaborate with, and provide benchmarking and learning opportunities with its suppliers on key sustainability issues.

SGS 2022 Supply Chain Assurance

Good Practice Examples

Recommendations

  1. Assume responsibility across the value chain: Supply chains are critical links that connect an organization’s input to its outputs. Many companies’ greatest sustainability risks and opportunities are in the supply chain. As a result, companies must set standards, manage risk and invest in the development of their supply chains for a step-change in sustainability impact.

  2. Develop a sustainability Code of Conduct for the supply chain: Supply chain sustainability requirements and approach should be clearly defined through a Code of Conduct.

  3. Develop a comprehensive assurance process: Assurance process should cover ESG issues relevant for suppliers, and can include a variety of methods such as self-declaration, independent audit and remedial action for high-risk suppliers.

  4. Set KPIs and targets to measure progress against goals and report more details about suppliers to assess and improve performance.

  5. Invest in supply chain developments: A comprehensive sustainability strategy includes developments for the supply chain including training and process improvements.

  6. Develop standards for audit and assessing ESG performance: Sectoral collaboration is required to develop and implement standards for audit. Examples include the Better Cotton Initiative or CO2 measurement across the value chain.

SGS 2022 Top Performers in Supply Chain Sustainability