Back to Basics: What is Supply Chain Due Diligence?
This month, we thought it timely to reintroduce the focus of most new supply chain regulations: Due Diligence.
What is it?
Supply chain due diligence is the process organizations use to identify, prevent, and mitigate the adverse impact of their entire supply chain operations, typically as it relates to environmental, social, and governance (ESG) issues. The key to achieving supply chain due diligence requires extending the risk mitigation process to suppliers and business partners further than just Tier-1 (or direct) suppliers, including third parties involved in the supply chain operations.
Why is it important?
Due diligence is vital for supply chains to:
What are some ways to improve your company's supply chain due diligence?
Speaking of Due Diligence... Have you seen our new Supply Chain Due Diligence Regulation Map?
In case you missed it, our new interactive map gives you the most streamlined view of supply chain due diligence regulations around the world, both in effect and upcoming, so your business can be fully prepared. Stay up to date with new laws and what they mean for your sourcing program moving forward.
Highlighting ESG risks around the world: Spotlight on Canada
Why low-risk doesn’t mean no risk
Canada has continually maintained a moderate standing in supply chain ESG risk, often showing lower risk in most areas and overshadowed by a higher-risk USA. However, Canada’s supply chain ESG risk scores had significant worsening trends in the past year and media reports linked the country to alleged human rights violations.
Canada saw deteriorating scores in key areas like child labor, forced labor, transparency and business integrity, which now all fall in either a high or medium risk category by way of our ratings.
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Whether it be through ESG violations detected from onsite audits or incidents captured by media outlets, lower risk sourcing regions are no longer “low risk” for responsible sourcing programs.? Supply chain ESG data has shown us this year that ignoring any region’s ESG risks, low or high, can leave supply chains exposed to potential reputational and operational damage.
Introducing our Risk Profile Builder
Creating a nuanced responsible sourcing program
Many programs cover the fundamentals of ESG but lack the nuance necessary to meet new requirements. This month, LRQA is excited to announce the launch of its Risk Profile Builder in EiQ, expressly designed to help businesses customize metrics that support your due diligence efforts. This new feature ends ambiguity over how to conduct effective risk mapping and enables companies to develop an interoperable risk mitigation framework that spans multiple geographies.
With the new Risk Profile Builder in EiQ, companies can tailor their supply chain risk profiles for specific areas of focus based on custom weightings and supply chain ESG indices. This feature allows businesses to conduct risk mapping based on the regulations and requirements that apply to their individual supplier base. Companies are using this framework for new regulations such as the German Supply Chain Due Diligence Act and to prioritize ESG metrics like environmental management or no-tolerance areas like forced labor.
Upcoming webinars
We have a couple of free webinars on new regulations coming up. They could be essential for your business so please check them out. Simply click to find out more details and register your place.
Stay up to date
We're excited to bring you this newsletter here on LinkedIn. Make sure to hit “subscribe” at the top to stay up to date on new due diligence regulations and the latest on your responsible sourcing program's exposure to critical ESG risks.
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Scope 3 GHG Emissions are major contributors and Scope 3 is all about the upstream and downstream value chain. Green Supplychain is the Key topic to introduce and implement in Logistics, material, Traveling, etc..
I support organizations in creating sustainable workplaces with comprehensive culture and risk evaluations.
1 年The era of merely "managing" risk in our supply chains is waning. In this dawn of #HighReliabilityOrganizations, we're revolutionizing our approach. LRQA’s emphasis on extending due diligence beyond Tier-1, illuminates a broader perspective – that every touchpoint in our supply chain, especially our third parties, hold a fragment of our organization's integrity. ?? Using tools like EiQ's Risk Profile Builder, we're not just mapping risk, but *shaping the future* of our operations. And what's game-changing? ?? It's the profound shift towards operationalizing our safety culture. Safety is not a box to be checked. It's a promise, a commitment, a core value. ?? Imagine, if every company could see the cascade of their impact, from the Tier-1 supplier to the remotest link in the chain. Just imagine the synergy, the harmonization of goals and visions! ?? I envision a world where supply chains aren’t just compliant, but are *the epitome of corporate responsibility and safety*. A world where every partner in the chain is a guardian of global values. Join me, and let's turn this vision into our reality. The future is not just about doing business; it’s about crafting legacies. ???? #Vision2030 #highreliabilty #thirdpartyriskmanagement