Technology Can Help Firms Manage ESG Risk, Procure
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Posted On: 12/10/2024 4:42:28 PM
Technology Can Help Firms Manage ESG Risk, Procurement Expert Reveals
Strategies for risk alleviation and management for firms have become very popular in the recent past, with the recent weather catastrophes and the coronavirus pandemic proving the worth of proper risk management. Without supply alternatives and accurate data in place, the consequences of not mitigating risk greatly impacts businesses.
When it comes to issues related to ESG and particularly forced labor, the discussion around risk and its management becomes vaguer.
With ESG concerns in supply chains continuing to increase, the risk they pose to procurement practitioners and businesses as a whole grows. Given that procurement professionals are required to prepare for and manage risk, it is important that they treat ESG concerns as objectives to be achieved rather than hindrances.
This sentiment is echoed by Peter Smith, author of Bad Buying and former Managing Director of Spend Matters Europe. In his extensive career, Smith has seen the ways in which firms deal with ESG risks evolve significantly.
He believes that procurement technology can help implement a firm’s ESG strategies, arguing that the structured workflows and collaboration brought about by tech makes compliance easier. Smith gives the example of a supplier that violates human rights, explaining that when it comes to eliminating forced labor from the supply chain, taking one’s business elsewhere may seem like the easiest decision.
He explains that while this would relieve a business of the regulatory risk, it wouldn’t solve the issue of forced labor. However, he continues, businesses can incentivize their suppliers to achieve specific goals. This may help solve the issue of forced labor while also tracking their progress using technology.
A good example of this would be the German Supply Chain Due Diligence Act, which came into effect earlier this year. The resolution stipulates that businesses with more than one thousand workers have to implement a risk management system for human rights.
Spend Matters Lead Analyst for Upstream Procurement, Bertrand Maltaverne, adds that firms being unaware of labor issues in their supply chain heightens their risk of financial damage. Maltaverne explains that ignoring these issues at a time when the consumer base and workforce is becoming more socially conscious is damaging to businesses.
He also believes that businesses’ investment in technology makes it easier to manage their partners while highlighting the importance of knowing where the issues in one’s supply chain are and what alternatives can be employed.
Maltaverne explains that by understanding the structure of one’s chain of supply, businesses can better utilize technology to drive initiatives focused on decreasing carbon emissions or improving human rights.
For companies like Energy and Water Development Corp. (OTCQB: EAWD) that operate in jurisdictions with strong regulatory systems, the carbon footprint of their operations is likely to be the dominant consideration in implementing ESG practices.
NOTE TO INVESTORS: The latest news and updates relating to Energy and Water Development Corp. (OTCQB: EAWD) are available in the company’s newsroom at https://ibn.fm/EAWD
Please see full terms of use and disclaimers on the ESGWireNews website applicable to all content provided by ESG, wherever published or re-published: https://www.ESGWireNews.com/Disclaimer
Strategies for risk alleviation and management for firms have become very popular in the recent past, with the recent weather catastrophes and the coronavirus pandemic proving the worth of proper risk management. Without supply alternatives and accurate data in place, the consequences of not mitigating risk greatly impacts businesses.
When it comes to issues related to ESG and particularly forced labor, the discussion around risk and its management becomes vaguer.
With ESG concerns in supply chains continuing to increase, the risk they pose to procurement practitioners and businesses as a whole grows. Given that procurement professionals are required to prepare for and manage risk, it is important that they treat ESG concerns as objectives to be achieved rather than hindrances.
This sentiment is echoed by Peter Smith, author of Bad Buying and former Managing Director of Spend Matters Europe. In his extensive career, Smith has seen the ways in which firms deal with ESG risks evolve significantly.
He believes that procurement technology can help implement a firm’s ESG strategies, arguing that the structured workflows and collaboration brought about by tech makes compliance easier. Smith gives the example of a supplier that violates human rights, explaining that when it comes to eliminating forced labor from the supply chain, taking one’s business elsewhere may seem like the easiest decision.
He explains that while this would relieve a business of the regulatory risk, it wouldn’t solve the issue of forced labor. However, he continues, businesses can incentivize their suppliers to achieve specific goals. This may help solve the issue of forced labor while also tracking their progress using technology.
A good example of this would be the German Supply Chain Due Diligence Act, which came into effect earlier this year. The resolution stipulates that businesses with more than one thousand workers have to implement a risk management system for human rights.
Spend Matters Lead Analyst for Upstream Procurement, Bertrand Maltaverne, adds that firms being unaware of labor issues in their supply chain heightens their risk of financial damage. Maltaverne explains that ignoring these issues at a time when the consumer base and workforce is becoming more socially conscious is damaging to businesses.
He also believes that businesses’ investment in technology makes it easier to manage their partners while highlighting the importance of knowing where the issues in one’s supply chain are and what alternatives can be employed.
Maltaverne explains that by understanding the structure of one’s chain of supply, businesses can better utilize technology to drive initiatives focused on decreasing carbon emissions or improving human rights.
For companies like Energy and Water Development Corp. (OTCQB: EAWD) that operate in jurisdictions with strong regulatory systems, the carbon footprint of their operations is likely to be the dominant consideration in implementing ESG practices.
NOTE TO INVESTORS: The latest news and updates relating to Energy and Water Development Corp. (OTCQB: EAWD) are available in the company’s newsroom at https://ibn.fm/EAWD
Please see full terms of use and disclaimers on the ESGWireNews website applicable to all content provided by ESG, wherever published or re-published: https://www.ESGWireNews.com/Disclaimer
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