SupplyChainTalk: Navigating ESG and supply chain risks by building resilient and responsible networks

On 5 March 2025, SupplyChainTalk host Alastair Charatan was joined by Daria Khitsenko, Program Manager Operations, Accell Group; Prof. Dr. Md. Mamun Habib, Professor, Independent University Bangladesh and University of Texas; and Tatiana Pagotto Yoshida, Innovation and Technology Coordinator, Grupo Energia. 

 

Views on news 

BNP Paribas Asset Management and Mercy Investment Services are among the filers of a human rights shareholder proposal at PepsiCo calling on the food and beverage giant to publish a report detailing the effectiveness of its efforts to uphold its human rights standards throughout its human supply chains in India.

 

Currently, in India ESG is becoming a priority, particularly the social sustainability aspect including human rights, child labour and diversity, but you can’t ignore the good governance and ethical considerations either. Meantime, US businesses tend to pull back from ESG in response to the U-turn made by the US government.  

 

In socially compliant supply chain networks, all stakeholders care about social and environmental responsibility and governance.  

 

Gaining multi-tier supply chain visibility in remote areas 

ESG must be integrated into a business’s procurement strategy. Cost shouldn’t be the only criterium when finding suppliers; the potential for a close long-term relationship enabling due diligence and an open book policy should be taken into consideration as well.  

 

There are regions in the world, though, where the digital presence of businesses can’t be taken for granted.

 

Small holders living in traditional communities must in fact be trained to use digital tools. Risk management must start with mapping risks and exploring how material they are to the business operation. Simple actions such as doing some research on potential suppliers or reading regional news can also help in onboarding ESG-driven suppliers. The 4T approach to managing risk is fairly popular nowadays in the industry – tolerate, terminate, treat and transfer. If the risk has a low impact, it may be acceptable alongside with close monitoring. If the risk exceeds the company’s risk appetite, then you must terminate the activities in question. Most severe risks must be mitigated by either removing the risk altogether or creating plans regarding how to reduce its impact on the business.

 

Yet some other risks must be transferred with the help of third parties such ad insurers.  But there are certain cases where no matter what insurance policy you’ve taken out, the reputational damage will do harm to your brand. When ESG is embedded in the company strategy, all functions will have goals and objectives tied to sustainability metrics.  

 

The panel’s advice 

• There are technologies on the market that can help you monitor your suppliers – for example, satellite imagery and aerial surveying. 
• There may be sometimes tough trade-offs, where you must pay considerably more for the product of a reputable supplier.  
• Make sure your procurement team has the resources and tools they need to vet and monitor suppliers.  
• Blockchain has the potential to safeguard data security in the supply chain.