Supply Chain Blindspots Impeding ESG Progress – Report

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The availability and reliability of critical supply chain data is preventing companies from operationalizing their business purpose and meeting their environmental, social and governance (ESG) goals, new research has found.

According to a study by Coupa Software, a leader in business spend management (BSM), UK companies want to improve their ESG practices and reduce risk, including improving energy efficiency (94%); Reduction of greenhouse gas emissions (93%); Abolition of Modern Slavery (92%); Improving diversity in the supply chain (88%); and reducing deforestation (86%).

However, this study also points to a lack of sufficient visibility into supply chain data and insufficient technology to enable companies to fully realize their ESG goals.

  • Almost all (95%) companies agree that accurate ESG data from their suppliers is important to understand supplier risk.
  • More than half (61%) did not fully agree that data on their suppliers’ ESG credentials is sufficiently available.
  • Almost three-quarters (73%) say they do not have strong enough technological capabilities to manage ESG risk and compliance from both Tier 1 (third-party) and Tier 2 (their third-party suppliers) suppliers ) to be fully evaluated.
  • Virtually all (95%) want to respond more quickly to external disruptive events, but more than three-quarters (77%) don’t have access to the data that enables this type of agility and said it would take weeks to months to add new suppliers find ESG standards that meet their requirements.

“By all means, no company can fully achieve its ESG goals and make a meaningful difference without having accurate and timely data to base decisions on,” said John Callan, Vice President of Product and Segment Marketing at Coupa.

Overcoming the data problem: A defense against disruption

There are ways to close companies’ ESG data gaps, with Coupa’s research finding that companies are demanding more industry-wide data sharing and collaboration:

  • 100% agree that openly and promptly sharing key ESG supplier data with potential buyers would help them better assess their ESG risk and compliance.
  • 97% agree there needs to be more collaboration between companies and suppliers on key ESG data.

“Organizations are rightly making ESG a priority and have begun making changes to their supply chains to become more sustainable. While many are just beginning their journey and marching toward net-zero goals, it’s clear that faster access to supplier information can support supply chain planning and help organizations better respond to disruptions. With this type of data collaboration, organizations can confidently make decisions that reduce costs and carbon as well as risk,” said Steve Banker, vice president of supply chain services at ARC Advisory Group.

“It’s reassuring to know that Coupa’s research also found that more than two-thirds (64%) of companies plan to invest in new technologies to help them meet their ESG goals,” added Callan . “However, if they want to truly operationalize their ESG strategy and business purpose, they need transparency technologies that go beyond mere reporting and allow buyers and suppliers to collaborate and share data as a community for a common cause.”

survey methodology

The survey was conducted among 800 decision makers who have supply chain visibility or responsibility in companies with more than 1,000 employees in Australia, France, Germany, Singapore, the UK and the US. The interviews were conducted by Sapio Research in February 2022 using an email invitation and online survey.

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