Supply chains have a significant impact on a company’s ESG. As of 2020, 90% of large companies in the S&P 500 have already published their annual ESG corporate sustainability reports, so it is important for companies to consider publishing ESG reports and being transparent.
Authenticate offers an ESG Maturity Assessment tool for all clients to evaluate their company’s sustainability and ethical practices, as well as ESGnius, a comprehensive database of ESG information to help companies evaluate their ESG performance and progress over time. Read more to find out what ESG reporting is exactly and why it is an important aspect of supply chain mapping.
What is ESG
ESG stands for Environmental, Social, and Governance. These are a set of criteria that are used by investors and stakeholders to assess a company’s performance and impact on society and the environment.
Some factors to consider that make up the environmental part of an ESG assessment include energy use, water management, waste management and reduction, carbon footprint, and other environmental issues.
For the social aspect, an ESG assessment considers employee diversity, labour practices, inclusion, human rights, and community engagement.
For governance, an ESG assessment considers aspects such as a company’s internal management and decision-making processes, i.e. board diversity, executive compensation, and anti-corruption policies.
Understanding the importance of ESG reporting
Investors and stakeholders conduct extensive due diligence before investing in a company. An ESG report establishes a company’s sustainability and ethical practices, and potential risks.
If a company is dedicated to sustainability, ethical practices, accountability, and transparency, an ESG report can solidify its claims and build trust with investors, clients, and customers. Moreover, an ESG report can help a company identify any areas for improvement which they can use to set targets for the future.
Ultimately, an ESG report can help encourage companies to adopt more responsible business practices, reduce their environmental impact, and contribute to the well-being of society as a whole.
The link between ESG and supply chains
Supply chains have a significant impact on a company’s ESG. Starting with the environmental impact, supply chains are responsible for a company’s contributions to agriculture, manufacturing, carbon emissions, water usage, waste management, deforestation, and more.
When it comes to social impacts, supply chains are responsible for a company’s ethical standards such as fair labour, health and safety practices, human rights, child labour, and more. For governance, supply chains must align with policies and laws such as anti-corruption and anti-bribery.
What are the benefits of ESG reporting?
Improved transparency
ESG reporting allows companies to demonstrate their commitment to sustainability and ethical practices. Customers, investors, and stakeholders prefer to invest in organisations that have ethical practices.
Better risk management
ESG reporting allows companies to assess ESG-related risks and make decisions to mitigate issues. These risks can be anything from climate change, labour practices, supply chain management, and more.
Enhanced performance
Companies that prioritise ESG factors often outperform their peers in the long run. This is because ESG reporting allows companies to identify areas for improvement and mitigate any future risks.
Promoting sustainable development
ESG reporting can help other companies and organisations take steps to be more ethical and sustainable with their supply chains. This can have a positive impact on the world and on the labour market.
How can Authenticate help with ESG reporting?
ESG Maturity Assessment
Here at Authenticate, we offer an ESG Maturity Assessment tool to help companies evaluate their supplier’s ESG performance. We use a comprehensive assessment framework to evaluate a company’s sustainability and ethical practices. The framework covers a range of ESG topics, including labour practices, environmental impact, governance, and social responsibility.
Data is collected by the tool from a wide range of sources, including supplier self-assessments, audits, and third-party certifications. The tool then uses a scoring system to rate a company’s ESG performance across each of the assessed areas, providing an overall ESG rating.
Based on each supplier’s ESG score, companies can prioritise actions to improve the sustainability and ethical practices of their supply chains. They can also use this tool to compare insights with benchmarking data with competitors and peers to monitor trends and developments in the ESG landscape.
Over the years, we have developed a comprehensive database of information across 50,000 companies.
Our ESGnius allows companies to:
● Identify suppliers
● Map suppliers & country risk
● Review supplier ESG assessment results
● Access scorecards, dashboards & reports
Companies can then evaluate their sustainability and ethical practices and assess their company ESG performance and progress long term. This ultimately reduces risk, improves financial performance, and increases a company’s reputation.
If you want to find out how you can assess the ESG of your company or organisation, contact us today.