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Supply Chain Sustainability Analysis

There is no “one size fits all” when it comes to implementing your ESG initiative.  Even within pre-established reporting frameworks, there is flexibility in how ESG applies to a particular company, its market(s), industry, and unique competitive context as well as to the character and value triggers of its various stakeholder constituencies.

A screening process or phase is often important so there is focus on those elements of ESG that are most material to a company and on the elements of a company that are susceptible to the greatest ESG risk.

For example, for an international food-additive company, Gnarus Advisors developed a sustainability model to provide an objective and quantifiable assessment of the sustainability profile of input components procured by the company.

The model incorporates all aspects of ESG, including environmental factors such as energy and climate change, water usage, and biodiversity as well as corporate responsibility factors such as child and forced labor, community displacement, and governmental corruption. The model also considers the use of mitigations, such as third-party certifications and supplier audits to improve sustainability.

ESG reporting requires information from the supply chain, but its critical to define the key information before initiating a significant supplier outreach.  First steps in ESG can be made without imposing significant burdens on company resources by using only existing and publicly available information.  By taking this approach Gnarus developed the model in a way which minimized the time, cost, and burden on company resources but still provided the client with significant actionable insights into their sustainability profile, allowing the company to improve the overall profile of the ingredients they procure.

 

Elements of Supply Chain Sustainability Analysis

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