Supply Chain Sustainability with Elise Caves

Supply Chain Sustainability in The Digital Age

As supply chains become global and complex, every company faces environmental, social, and governance (ESG) issues within their supply chain network. While the most talked-about aspects are environmental problems including climate change, carbon emissions, pollution, and waste management, social and governance issues are also rising. Social problems are product liability, consumer activism, and the rising risk of modern slavery and labor issues. Governance includes business ethics, privacy, data security, board effectiveness, and a company’s corporate culture.

ESG issues have always been important because they contribute to the sustainability and management of a company’s long-term health. The term ESG originated from the investment community’s concern with sustainable investments. However, sustainability has long been a topic in procurement, and the recent increase in importance has been driven by consumers who no longer expect companies to sell goods at the lowest price only with no regard for where the product originated and how it landed in their hands. There is a heightened public awareness of where raw materials are sourced, how they were shipped, and what impact it created on the environment in that process. This also leads to an increasing need for supply chain transparency related to labor and human rights.

ESG has also become more prevalent as the formal frameworks for ESG have advanced. Over the past few years, some of the most prominent standard setters have issued guidance to help companies implement and compare their ESG efforts against the industry benchmark. New and innovative products have been launched that have helped accelerate adoption in this area. A long-standing player in the space is EcoVadis, the world’s largest and most trusted provider of business sustainability ratings. SAPinsider recently invited Elise Caves, a Product Manager from EcoVadis to discuss the critical aspects of sustainability from the context of supply chain and procurement. Right off the bat, she confirmed our hypothesis about the growing importance of sustainability. Watch the video of the discussion below.