The United Nations Global Compact (UNGC) and EY released the study in August 2016 with the aim of promoting responsibility and resilience in complex global supply chains. The report argues that ESG improvements in supply chains offer diverse commercial benefits, including reduced costs and market differentiation.

Supply chains have become increasingly global in recent decades. At the same time, growing stakeholder awareness of the potential links between consumer goods and global challenges – such as conflict minerals, modern slavery, child labour, poor working conditions and environmental degradation – have made supply-chain issues increasingly tangible for consumers and regulators. As a result, sustainability has become a key issue for many procurement departments, alongside the quality, cost effectiveness, speed and reliability of supply chains.

The report is based on interviews with 100 supply-chain specialists from 70 companies globally. Based on the findings, UNGC and EY state that ESG improvements in supply chains can enhance business processes, reduce costs, increase labour productivity, uncover product innovation, achieve market differentiation and have a significant impact on society.

Three key themes emerged from the interviews about good practice:

• Shared commitment – In addition to communicating expectations, monitoring and auditing, companies are increasingly investing in supplier engagement, capacity building and incentives to promote continuous improvement and common business goals.
• Collaboration – Collaborative initiatives by sector help to leverage the combined power of all partners, while reducing management costs and supplier fatigue.
• Technology – Technological innovation enables companies to increase the transparency of their supply chains.

To read the full report click on the following link: The state of sustainable supply chains: Building responsible and resilient supply chains.