Just 6% of UK organisations are on track to reduce off-site carbon output. Poor health, safety and staff conditions prevail at third party workplaces. So how about making a New Year’s resolution with real impact?
Organisations are facing increasing pressure to act on ESG and corporate responsibility, with investors, customers and regulators expecting to see meaningful steps to reduce environmental and social impact.
Yet, that ambition and action cannot stay within the boundaries of an organisation. The biggest risks – and the biggest opportunities for positive change – often lie in the supply chain comprising hundreds or thousands of entities.
The recent EcoVadis Carbon Action Report, covering more than 83,000 companies globally, including nearly 2,000 responses from the UK. This revealed that organisations are nowhere near where they need to be when it comes to addressing supply chain emissions.
The research found only 6% of UK businesses have set and are on track to meet Scope 3 emissions targets – which, on average, are 21 times higher than those from Scope 1 and 2. Meanwhile, two-thirds of UK companies are not reporting their supply chain emissions at all.
At the same time, the Employment Rights Bill and a Joint Committee inquiry are shining fresh light on workers’ rights and labour issues within supply chains, serving as a reminder that companies are accountable not only for the conditions faced by their direct employees but also have a responsibility to those further down the line.
Looking at businesses around the world, the organisations that are making the greatest strides in reducing their environmental and social impact are those which are looking beyond their four walls and where ESG is treated as a shared responsibility.
Keeping this siloed in one team limits visibility and slows progress, but if leaders across procurement, sustainability and people can come together to share expertise, align priorities and drive a joint mission, we can get a far clearer picture of impact and act effectively.
By working in concert, these leaders can form an ‘Ethical Supply Chain Dream Team’ and work collaboratively to engage suppliers meaningfully, ensure compliance with environmental and labour standards, and build a more resilient, responsible and sustainable supplier ecosystem.
Just as important as having a shared mission is having the visibility to turn it into reality. Leaders need high-quality, reliable data to understand where risks and opportunities lie across their extended networks – without it, even well-intentioned actions can miss the mark.
Digital tools and real-time reporting make this possible. For example, the EcoVadis Worker Voice Connect platform, which enables staff across global supply chains to raise concerns about inappropriate workplace treatment, giving organisations direct insight and the ability to act decisively on labour rights issues.
Only by establishing a joint mission, encouraging collaboration across teams, and using high-quality data, can businesses take responsibility beyond their four walls, meet expectations around their impact, and build truly ethical supply chains.
Pierre-François Thaler is Co-CEO at EcoVadis, a platform helping organisations manage ESG risk and compliance, and meet corporate sustainability goals.
Image: Miltiadis Fragkidis / Unsplash
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