ESG reporting: Companies are struggling to access and collect data from supply chains

Despite improvement on ESG reporting and information capture, source chain monitoring continues to be a major challenge, in accordance with new research by Wellness, ESG and safety danger management provider , Alcumus.

In its inaugural analysis, Alcumus analysed ESG adoption among companies in the united kingdom, US and Canada. The study revealed that accessing and collecting information from its supply chain is among the most crucial challenges for businesses with regards to ESG reporting, called by two in five (38 %) respondents.

Presently, over half (60 %) of the firms surveyed are supervising their offer chain and make an effort to collect ESG information and performance details, covering crucial places like compliance with contemporary slavery and pressured labour legislation, Scope 3 carbon footprinting, protection permits and the development of social value. Almost as many already spend money on technology to aid their supply chain administration (56 %) and over a 3rd (37 %) have plans to take action.

Yet, fairly few say they now have or intend to have a thorough third-party data presence and tracking system set up for ESG – 11 % for environmental, 14 % for social and 15 % for governance performance. The nice reasons are two-fold. Firstly, most businesses don’t monitor the entire supply chain (84 %); and secondly, a large proportion (73 %) think it is challenging to find out which data to monitor.

Among those which have systems set up or intend to establish these, only 17 % are considering all suppliers with regards to verifying and capturing information. For the large section of companies, however, source chain verification is fixed to main providers and the ones of large dimension, named by 39 % and 33 % respectively.

Helen Jones, COO, Business at Alcumus, commented:   “ESG has turned into a major concern for most organisations. To be sustainable truly, supply chain procedures must appropriately end up being assessed. Visibility through the entire supply chain isn’t only key to combat increasing greenwashing accusations which today threaten companies of most sizes and sectors. The opportunity to manage these dangers shall determine which businesses will have customers, staff and investors later on.”

The study found probably the most prominent problems with regards to supply chain supervising are that providers themselves cannot report performance data (46 %) and don’t possess the systems set up to automate data selection (42 %). That is predominantly right down to the truth that those providers who don’t record don’t collect such information (78 %). However, what’s also hindering improvement is that 54 % of suppliers aren’t ready to disclose their information.

David Picton, SVP of Sustainability at Alcumus, mentioned: As businesses along with other organisations begin to get over the disruption of recent years, they’re facing significant dangers and ‘blind areas’ across offer chains in locations like brand impact, environment activity, ethics and operational disruption. Effective information cleverness and data presence will be crucial for organisations to show improvement on ESG and demonstrate they take their obligation to protect their individuals and our planet significantly.”