SGS-Maine Pointe discusses challenges and benefits of ESG in supply chain

20 April 2022 Consulting.us 3 min. read

Simon Knowles, CMO at supply chain and operational consultancy SGS-Maine Pointe, and Alan Amling, distinguished fellow at the Global Supply Chain Institute of the University of Tennessee, recently sat with SupplyChainBrain to record a podcast episode on the topic of environmental, social, and governance (ESG) strategy in the supply chain.

Although more companies are integrating ESG strategy into their supply chain amid growing stakeholder pressure, identifying, measuring, and meeting targets across extensive value chains can be a dizzying task. 

“There are broad opportunities across environmental, social, and governance…In the environmental space there’s energy efficiency, there’s greenhouse gas emissions and water management aspects,” Knowles told SupplyChainBrain. “From a social perspective there’s diversity and inclusion aspects, working conditions, and slavery…From a governance point of view, risk management, executive pay, and cybersecurity have become very hot.”

Knowles says that though many business leaders understand the long-term value creation potential of ESG, the area of importance can vary across industries. For example, energy firms may focus more on new markets and biodiversity while business services firms may gravitate to social diversity and governance aspects.

Maine Pointe expert examines supply chain ESG in podcast

Amling notes it might not be advisable to try to tackle all ESG fronts simultaneously. “Actually, I think the worst thing you can do is try to boil the ocean. If you try to do everything all at once, you’re going to do nothing very well. I think companies do get overwhelmed.”

There also isn’t a one-size-fits-all solution to ESG strategy, Amling says. “There isn’t one best supply chain for every company. There’s not one best ESG strategy for every company. Yes, it’s about doing the right thing and lowering your risk profile and driving bottom-line results, but it also goes to beyond your customer to your employees.

“One of the biggest issues that has just been punching us in the face all year in supply chain is labor,” he added. “And one thing that we know for sure is that especially millennials care about ESG. When they’re making choices between companies…one of the things they’re looking for is ethical companies, and ESG is essentially how investors, customers, and employees judge the social and environmental consciousness of an organization.”

The entire 20-minute podcast can be found at SupplyChainBrain.

The episode arrives after Knowles and Amling were featured in Supply Chain Management Review/ASCM podcast “The Rebound,” where the pair also focused on the topic of supply chain ESG. Knowles and Amling were also in the March/April edition of ISM’s Inside Supply Management Magazine, where they discussed the trade-offs a company must consider to achieve ESG status and why it must be part of the corporate agenda.