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Two in 5 firms battle with ESG provide chain information • Inexperienced Enterprise Journal

Few firms have a comprehensive ESG tracking system in place; 84% currently don’t monitor their full supply chain, and 70% don’t know what data to track.

Despite progress on ESG reporting and data capture, supply chain monitoring remains a major challenge, according to a new report.

Risk management provider Alcumus analysed ESG adoption among businesses in the UK, US and Canada. It found that accessing and collecting data from supply chains is one of the most significant challenges for businesses when it comes to ESG reporting, according 38% of respondents.

Currently, over half the companies surveyed are monitoring their supply chain to collect ESG data and performance information, covering crucial areas like compliance with modern slavery and forced labour legislation, Scope 3 carbon footprinting, safety permits and the creation of social value. Nearly as many already invest in technology to support their supply chain management (56%) and over a third (37%) have plans to do so.

Yet relatively few say they currently have – or plan to have – a comprehensive third-party data visibility and tracking system in place for ESG (11% for environmental, 14% for social and 15% for governance performance). The reasons are two-fold. Firstly, most companies don’t monitor the full supply chain (84%); and secondly, the vast majority (73%) find it challenging to determine which data to track.

Among those that have systems in place or plan to establish these, only 17% are looking at all suppliers when it comes to capturing and verifying data. For the large part of companies, however, supply chain verification is restricted to main suppliers and those of large size.

Alcumus COO Helen Jones said: “ESG has become a major concern for many organisations. To be truly sustainable, supply chain operations must be assessed appropriately. Visibility through the full supply chain is not only key to combat rising greenwashing accusations which now threaten companies of all sizes and sectors. The ability to manage these risks will determine which companies will have customers, investors and staff in the future.”

Challenges to data collection are the biggest hurdle

The most prominent challenges when it comes to supply chain monitoring are that suppliers themselves are not able to report performance data and don’t have the systems in place to automate data collection. This is predominantly down to the fact that those suppliers who don’t report don’t collect such data (78%). However, what is also hindering progress is that 54% of suppliers are not willing to disclose their data.

David Picton, of Alcumus, added: “As businesses and other organisations start to recover from the disruption of the past few years, they are facing significant risks and ‘blind spots’ across supply chains in areas like brand impact, climate action, ethics and operational disruption.

“Effective information intelligence and data visibility will be key for organisations to demonstrate progress on ESG and prove that they take their responsibility to protect their people and our planet seriously.”

BtoB Central Staff
BtoB Central Staff
Btobcentral is dedicated to business news.


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