SUSTAINABLE SUPPLY CHAINS
with suppliers that adhere to social and environmental standards . These companies expect their first-tier suppliers to comply with those standards and also ask that those suppliers ask for compliance from their suppliers – to create a cascade of sustainable practices that flows smoothly throughout the supply network . As admirable as this concept is , it ’ s been hard to realise in practice .
The study found lower-tier suppliers lack environmental management systems and procedures for handling social problems and are the least equipped to handle sustainability requirements . Additionally , they often operate in countries with non-existent or non-enforced regulations and are usually unaware of big corporations ’ sustainability requirements .
As a result , lower-tier suppliers are the most risky . If they have poor or dubious sustainability performance , companies that do business with them can endanger their reputation and suffer profound repercussions . To minimise such risks , companies must consider all their suppliers in their sustainability programs .
2 . Assess , track , and monitor emissions According to the CDP 2022 supply chain report , 70 % of companies did not assess the impact of their value chain on biodiversity . This means companies fail to track supply chain emissions , risking falling foul of sustainability regulations .
According to the European Sustainability Reporting Standards , transparency in Scope 3 emissions could be required in a matter of months in the EU . The story is similar in the United States , where climate-related financial reporting will soon be required under the International Sustainability Standards Board ( ISSB ) global baseline standard .
In other words , if a company does not prepare for future regulations on nature in the supply chain , it will be exposed to a
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