Regulatory and reputational risks as well as pressure from consumers and investors are driving companies to be more accountable and transparent about the steps they are taking to mitigate and manage risks especially related to their third party relationships.
We live in an increasingly complex and rapidly changing world, challenged by political instability, global inequality, climate change and food security, among other issues. Companies operating in a global environment are exposed to various risks – from bribery and corruption, to conflict minerals being used in products, to modern slavery to illegal logging tainting global supply chains.
But do companies really know who they are doing business with and how to address the risks they are exposed to?
Corporate transparency and a cleaner supply chain
Global supply chains are complex and the most critical issues usually appear deeper in the supply chain – further from customer reach and influence – but large organizations often don’t have that transparency.
Example of networks uncovered
There is a strong link with issues across supply chains and it is important to understand these linkages. For example, corruption often leads to other crimes. It becomes an environmental issue when it is linked to improper granting of permits and licenses for natural resource exploitation and becomes a safety issue when bribes are used to attain false certifications and bypass safety laws. Our analysis shows a high correlation between corruption and slavery, illegal mining and illegal logging, revealing that corruption is a possible gateway to other crimes. Therefore in managing supply chain risks it is important not to evaluate risks in silos but to take a holistic and cross cutting approach to value chain risk assessment.
Our upcoming webinars will be looking at how companies can drive transparency in supply chains across issues such as bribery and corruption, illegal mining and conflict minerals, slavery and human rights abuse, and illegal logging. Join our discussion with a range of experts from private sector and civil society on how to address emerging risks within global supply chains in a holistic and systematic way to allow organizations to drive transparency in a complex global environment.
We are at a new era of hyper transparency where technological innovation and stakeholder appetite for information leaves nowhere to hide from negative news stories. Transparency is not just a buzz word – it is increasingly becoming common sense in business. Companies that are using better data from deeper in the supply chain to enable more robust risk management and to build more resilient supply chains will be leading the way and ready for the future challenges.
Thomson Reuters is a proud sponsor of the Bold Transparency track at the BSR Conference 2016: Be Bold. The annual BSR Conference is one of the world’s most influential events dedicated to sustainable business.