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Zeroing in on ESG due diligence

Refinitiv’s latest three-part webinar series unpacks the core elements of ESG risk, focusing on the E, the S and the G and drawing insights from a range of industry experts.

  1. To more effectively manage ESG supply chain risks, firms need to analyse the facets of risk and devise practical solutions. A series of Refinitiv webinars explore this topic.
  2. The first webinar – ‘E’ – looks at the most urgent global environmental risks, including the destruction of the Amazon rainforest and the other associated criminal offences.
  3. The second webinar addresses social considerations and how they may be hidden in supply chains. And the final webinar focuses on governance and how companies can manage compliance risks.

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ESG risk in supply chains

ESG risk continues to evolve at pace, and consequently, effectively managing and mitigating the full range of ESG supply chain risks that exist requires a multi-faceted strategy.

Our new three-part webinar series unpacks the different facets of ESG risk and zeroes in on best practice solutions that can mitigate specific risks that fall under the ESG umbrella.

An increasing number of regulations now govern the ESG space and organisations that ignore or under-value the importance of ESG may suffer intense fallout, including fines and potentially severe reputational damage.

On the upside, those boardroom leaders that give ESG considerations due attention often enjoy a range of tangible benefits, including positive brand reputation, increased shareholder satisfaction, better recruitment and retention of top talent, and superior financial performance.

Spotlight on E

Our first webinar explores the E in ESG, which focusses on environmental considerations. Our panellists take a deep dive into some of the most urgent environmental challenges and hotspots that exist across the globe today.

One significant example is the ecosystem of environmental crime that persists in the Amazon. The network of environmental illegalities in the region is linked to a range of other crimes, including fraud, money laundering, drug trafficking and more.

Our panellists go on to stress the highly lucrative nature of environmental crime. For example, the illegal wildlife trade is estimated to be worth around US$20bn a year. If illegal timber trade is added to this, the figure jumps to an eye-watering US$250bn-plus a year.

Companies are aware of the importance of environmental considerations but do view these risks as secondary to some other risks: our online poll of webinar audience participants reveals that 36.9 percent believe the E in ESG is the most important key driver in their third-party risk programmes, but a larger percentage (40 percent) view environmental risks and considerations as important, but second to social and/or governance concerns.

Spotlight on S

The social element of ESG considerations – the S of ESG – covers a broad range of issues, from human rights abuses, forced labour and modern slavery to employment practices, health and safety concerns, and more.

This social aspect of ESG tends to dominate global news, and our panellists take an in-depth look at how these risks differ from traditional third-party supply chain risks, before delving into some of the biggest challenges firms face when addressing the social risks that may often be hidden in global supply chains.

This second webinar also explores some common stumbling blocks to compliance. When asked about the biggest challenge to addressing social risks across the supply chain, the largest percentage of our webinar audience (44.7 percent) selected “getting quality data on potential risks”.

Our panellists go on to discuss best practice when it comes to identifying and mitigating social risks. Suggestions ranged from advice on robust screening and how to carry out effective due diligence, to the importance of continuous monitoring in the face of the evolving nature of this risk.

Spotlight on G

Turning to the G within ESG, our webinar explores some of the biggest challenges and best practices in the governance risk space today.

Governance-related issues are broad, encompassing corporate culture and values, compliance and the very nature of how decisions are made in organisations.

This last point is important since one of the key aspects of managing third-party risk is proper assessment and record-keeping – and that includes why and how decisions are made.

There is a growing obligation on companies to understand exactly what their third parties are doing. Compliance programmes need to be broadened and need to take into account all the material risks that a company faces.

Panellists go on to outline some of the most important regulations and directives to be aware of in this space and also offer advice on the best practices and tools available to help companies identify and manage governance risks in their third-party networks.

Now is the time to address ESG risk

There are many best practices that organisations can implement immediately, including, but not limited to, keeping abreast of regulations in the space; adopting a risk-based approach to due diligence; fully understanding the nature and operations of each third party; and continually assessing risk.

The key takeaway, however, is this: ESG risk is a current third-party risk. It is no longer an emerging or future risk, but a “here and now” challenge. While addressing ESG risk is complex, any action is better than none.

Watch the ESG Due Diligence webinar series

Webinar series: Focus on ESG



Is there ESG risk in supply chains?

ESG risk continues to evolve at pace, and consequently, effectively managing and mitigating the full range of ESG supply chain risks that exist requires a multi-faceted strategy.