(9 March 2022 – Australia) With the onus placed firmly on boards and business owners to manage environmental, social and governance (ESG) risks and drive sustainable outcomes, what skills and resources do procurement teams need to meet the challenge?
CBA asserts that procurement teams are perfectly positioned to assist corporates reliably manage, measure and mitigate their ESG risks and deliver on their sustainability strategy. There are many strategies at a company’s disposal to meet this challenge, including usage of carbon credits and sustainable financing.
How are CFOs defining risks and setting targets by embedding ESG principles into their supply chain operations? Procurement teams objectives generally include
contract management
- reducing risk
- securing supply
- lowering costs
- increasing efficiency
- improving quality
Common ESG considerations across several industries that CommBank has identified include
- corporate governance
- greenhouse gas emissions
- certified social and indigenous suppliers
- poor workplace conditions including safety, hours and pay
- modern slavery and human trafficking
Using these considerations, corporates have the opportunity to leverage their supplies to deliver against their ESG outcomes. CBA highlights two key tools for an organisation to drive sustainability outcomes throughout their supply chain
- Managing usage levels of various suppliers
- Influencing suppliers to optimise their value chains to deliver against objectives.
“The enormity of both the challenge and opportunity with respect to ESG is not lost on our customers. We have seen clients create ESG-focused teams under dedicated senior leadership appointments across virtually all industry sectors. This has led to a marked increase in our clients’ desire to understand how we can help facilitate their ESG goals and objectives, specifically as it relates to the supply chain” commented CBA Executive Director, Head of Business Development & Client Consulting, Transaction Banking, Institutional Banking & Markets, Adam de Bree.
“There’s a range of opportunities and solutions for businesses to tap into to solve their sustainability challenges in their supply chain. Data can provide really powerful insights into suppliers' performance and risk status” de Bree added.
East & Partners upcoming Global Insight Report “Digitising and Greening Global Supply Chains” refreshes the 2017 analysis while uncovering the impact of digitisation and ESG on global supply chains as defined by the Top 100 corporates in eight countries. Contact East & Partners now for research access.