IFB313TC

Supply Chain ESG Management

Lecture 1
Dr. Yunlu Zhang
Email: Yunlu.Zhang@xjtlu.edu.cn

1
 What is this course about?
• Why is it crucial for a company to recognize the
importance of ESG in supply chain management?

• What actions should the company take to

address the ESG impacts of its supply chain?

2
 Objectives of the course
• Analyze the environmental, social, and governance impacts of
supply chain activities
• Demonstrate understanding of the application of environmental
management tools and systems
• Evaluate social elements and ethical practices within supply chain
• Investigate governance structures and practices
• Measure and report on ESG performance
• Develop strategic approach to ESG management in supply chain

3
 Structure of the course
Week Number Lecture Topic/Theme

Week 8 Introduction: definition and analysis of ESG

Lecture 1
impacts of the supply chain activities

Week 9 Application of environmental management

Lecture 2
tools and systems -1

Week 10 Social elements and ethical practices within

Lecture 3
supply chain

Week 11 Lecture 4 Introduction to corporate governance

Week 12 Lecture 5 ESG metrics and reporting

Week 13 Lecture 6 Strategic approach to ESG management

4
 Structure of the course
Week Number Seminar/Other Topic/Theme

Week 8 Sustainable development of supply chain,

Seminar 1
case study

Week 9 Application of environmental management

Seminar 2
tools and systems -2
Case study of social element in ESG through
Week 10 Seminar 3 debate, real-world implications, challenges,
and strategies

Week 11 Seminar 4 Supply chain governance, case study

Examples of company ESG ratings, major

Week 12 Seminar 5 ESG rating systems, hands-on experience
with ESG reporting
Week 13 Strategic approaches to addressing ESG
Seminar 6
concerns, industrial real situation reflection 5
 Contact details
Model Leader:
Dr. Yunlu Zhang
Office: E4011
Email: Yunlu.Zhang@xjtlu.edu.cn
Office Hours: E4011, 11:00-12:00 Friday; online
by appointment via Email

6
 Module Information
Lectures

Time (Week 8-13) Teaching mode

Monday 10:00 – 11:50 Onsite (TC-FG-2001)

Seminar

Time (Week 8-13) Teaching mode

Thursday 11:00 – 12:50 Onsite (TC-AB-2003)

Assessment

Individual CW 100%

7
Lecture 1
Introduction: definition and analysis of the
supply chain activities

8
 Learning Outcomes
• Identify the ESG risks in the supply chain
• Recognize opportunities within the supply chain
to enhance ESG performance
• Explain the necessity for companies to consider
all ESG impacts on their supply chain
• Understand the importance of managing a
sustainable supply chain

9
 Supply Chain Activities
The supply chain process can incorporate the following aspects:
• Sourcing raw materials
• Manufacturing basic components
• Assembling completed products
• Marketing and selling finished products to consumers
• Delivering orders to customers

10
 Supply Chain
• A supply chain is a series of units that transforms raw
materials into finished products and delivers the products
to customers (Mabert and Venkataramanan,1998).

• Some of the units in a chain are located inside a single

organization’s borders while others cross such borders in
complex and evolving ways.

• Effectively managing supply chains is vital to organizational

success. Indeed, there is a growing recognition that modern
competition is being fought ‘‘supply chain versus supply
chain’’ rather than ‘‘firm versus firm’’(Boyer et al., 2005;
Ketchen and Guinipero, 2004).

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 Supply Chain
• The supply chain is the interconnection of all the functions,
parties, resources, and activities involved in getting the
product from the supplier to the customer.

• Supply chain operations are concerned with achieving this as

quickly and cost-effectively as possible, ensuring customer
satisfaction at the same time.

• Supply chains cover the various stages of getting products to

customers.

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 Supply Chain Management
• Managing the supply chain and its various facets: procuring
raw materials, manufacturing, storing, and selling finished
products, and then ensuring that they reach consumers.

• The supply chain business process includes tracking

production planning, liaising with suppliers and service
providers, and overseeing the smooth functioning of logistics.

“Efficiency, Consistency, and Security”

The Purpose of SCM

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 The Important Role of SCM
• The supply chain is fundamental to the profit generation
capability of the organizations.

• The supply chain and purchasing executives now take part in

discussions on the company’s business model design.

• The supply chain defines the profit engine of company’s

business model.

• Creating an agile supply chain will help the company respond

quickly to changes of any kind.

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Supply Chain Management Process

Planning Sourcing Manufacturing Distributing Returning

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 Planning Stage
• SCM begins with a plan or a strategy. It aims to manage the various
elements in order to ensure the right products are in the right place at the
right time. As well as meeting customer demand, and design a plan that
helps you maximize revenue.

• The plan should be based on a set of measurable metrics and benchmarks

for success, which in turn should be based on business goals—and the
resources.

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 Sourcing Stage
• Sourcing raw materials and/or suppliers. To source
components for creating products, or just the finished goods,
the company need select reliable partners and build strong
relationships with them.
– Make: Bill of Material components that are manufactured in-house
– Buy: Bill of Material components that are to be sourced from third party suppliers.

Source from: https://www.techstars.com/the-line/advice/supply-chain-fundamentals-sourcing-startups 17

 Manufacturing Stage
• The key part of SCM. To decide if you want to order products
well in advance, or “just in time” to meet demand.

– Use supply chain and manufacturing operations to create winning

strategies;

– Transform manufacturing processes for better productivity;

– Foster a quality culture to create competitive advantage;

– Leverage digital and autonomous supply chain opportunities.

Source from: MiKinsey & Company/Manufacturing & Supply Chain 18

 Distributing Stage
• Getting products into the hands of consumers.

• Depending on the business model, the goods may be

delivered from the supplier to your own warehouse for
processing and onward distribution, to a retail store for sale,
or direct to customers.

• Distributing stage sometimes called the logistics stage, where

you and your partners (suppliers, shipping carriers, 3PL
providers) work together with your in-house teams to get the
goods out on time.

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 Returning Stage
• As a retailer, returns are probably the bane of your existence. But they’re
increasingly something you have to handle, especially if you sell online.

• The most obvious reason is that the goods were damaged or faulty, but e-
commerce customers may return items that arrived too late, or because
they ordered multiple options.

• Returns may arrive by mail or to a physical store, even if they were bought
online. You need a robust system for processing them—ensuring that
customers are reimbursed quickly, undamaged products go back into your
inventory, and non-resalable items are disposed of or recycled. Your
customer service team should also be ready to deal with customer queries
and complaints.

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 Reverse Logistics
What is the reverse logistics?

It is operationally related and focuses on adding value to the

reversal procedure of a supply chain, or the flow of product from a
customer to the manufacturer, is considered reverse logistics.

It is the operational process of planning and executing of the

reverse flow of products in a cost-effective and efficient manner.

The process of planning, implementing, and controlling the

efficient, cost-effective flow of raw material, in-process inventory,
finished goods and related information from the point of origin for
the purpose of recapturing value or proper disposal.
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 Reverse Logistics

• Returns • Unsold goods

• Remanufacturing • End-of-life
• Refurbishing • Delivery failure
• Warranty claims • Repairs & maintenance
• Reuse of packaging • Recycling

H&M Video
https://www.youtube.com/watch?v=obO1PKfXGpQ
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 Strategic Supply Chain
v.s. Traditional Supply Chain

Issues Strategic Supply Chain Traditional Supply Chain

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 Question Time

If you were a supply chain manager of L’ORÉAL Paris,

could you define some supply chain improvements which
are possible to promote customer satisfaction?

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Challenges of Supply Chain Management
• The complexity of supply chains inevitably means that a lot of
things can go wrong with them.

• One of the most important things to remember about supply

chains is that seemingly minor problems and inefficiencies can
cause much bigger problems further along the line, and even
the most detailed plans can go awry.

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 Other reasons for supply chain issues
• Higher costs, including customs charges and increased fuel costs.

• Maintaining multiple channels at once (i.e., e-commerce and

physical stores).

• Natural disasters affecting part of the chain.

• Lack of data or tracking.

• Staff shortages, especially long-haul drivers.

• Inventory shrinkage.

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 Supply Chain Sources of Risk

Source from: Mansoor Shekarian & Mahour Mellat Parast (2021) An Integrative approach to supply chain disruption risk and resilience
management: a literature review 27
 ESG risks in supply chain
In today’s rapidly evolving global trade environment, supply chains are

becoming increasingly complex and vulnerable to a wide array of risks.

One critical area that has emerged as strategic priorities for businesses is

ESG (Environmental, Social, and Governance) considerations in supply

chain management and businesses must include ESG considerations in

their supply chain management. These elements are essential for

building resilient and sustainable supply chains.

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 What is ESG?
In 2004, the term “ESG” became official after its first mainstream appearance
in a report titled, “Who Cares Wins.” The report illustrated how to integrate
ESG factors into a company’s operations, breaking down the concept into its
three basic components: environmental, social and governance (or
corporate governance).

In the decade that followed, more principles and frameworks were created,
providing further guidance on how companies can integrate and report on
ESG factors. Some prominent examples include the Principles for Responsible
Investment (PRI), the Climate Disclosure Standards Board (CDSB) and the
Sustainability Accounting Standards Board (SASB).

Source: https://www.ibm.com/think/topics/environmental-social-and-governance-history 29
 The three dimensions of ESG
Environmental
Refers to whether the organization is operating as a steward of the
environment and covers environmental issues like climate change,
greenhouse gas emissions (GHG), deforestation, biodiversity, carbon
emissions, waste management and pollution.

Social
Refers to the impact the organization has on people, culture and
communities and looks at the social impact of diversity, inclusivity,
human rights and supply chains.

Governance
Refers to how the organization is directed and looks at corporate
governance factors like executive compensation, succession planning,
board management practices and shareholder rights.

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 ESG today and tomorrow
• Today, ESG data is used to evaluate a company’s performance on specific ESG issues.

• Asset managers continue to develop a range of ESG strategies and metrics to measure the
environmental and social impact of today’s companies.

• New regulations have been established, like the European Union’s Corporate Sustainability
Reporting Directive (CSRD) which requires businesses to report on the environmental and
social impact of their business activities, and on the business impact of their ESG efforts. In
North America, the Securities and Exchange Commission (SEC) is considering mandatory
ESG reporting for public companies, as is the case in Canada, Brazil, India, Australia and
Japan.

Source: https://www.ibm.com/think/topics/environmental-social-and-governance-history 31
 ESG today and tomorrow

• ESG ratings and indices have also become more prevalent in recent years. Morgan
Stanley Capital International (MSCI), for example, offers a range of ESG indices that
allow investors to track companies based on their ESG performance.

• As the world faces increasing challenges related to climate change and social issues,
ESG considerations will continue to play a critical role in the way companies and
investors operate and measure their performance.

Source: https://www.ibm.com/think/topics/environmental-social-and-governance-history 32
 ESG trends to look out for in 2025
Trend 1: Rising Protectionism Impacts Global ESG Development

Progress in 2024

• Geopolitical conflicts persist.

• The politicization of ESG intensifies in the U.S. market.

• Trade protectionism rises in the EU region.

• The development of global ESG is overshadowed.

Source: SynTao Green Finance. 33

Trend 1: Rising Protectionism Impacts Global ESG Development
Forecast for 2025

• U.S. investment institutions may adopt a “green silence” mode, avoiding

discussions on ESG and net-zero carbon.

• U.S. investment institutions might continue ESG investment strategies in markets

outside their home country.

• China-EU cooperation becomes more critical, with deepened sustainable

financial exchanges

• Trade frictions may emerge in areas like new energy vehicles and key minerals.

• ESG factors could evolve into trade barriers.

Source: SynTao Green Finance. 34

Trend 2: Export Trade Compliance Becomes a Driver of ESG
Progress in 2024

• The EU has introduced a series of sustainability-related legislations:

• Corporate Sustainability Reporting Directive (CSRD)

• Corporate Sustainability Due Diligence Directive (CSDDD)

• EU Deforestation Regulation (EUDR) to be released soon

• Policies advocate for traceability of information and accountability in supply

chains, promoting responsible behavior among supply chain enterprises.

• BYD’s public relations incident in Brazil:

Source: SynTao Green Finance. 35

Trend 2: Export Trade Compliance Becomes a Driver of ESG
Forecast for 2025

• The overseas ESG performance of Chinese enterprises is attracting increasing

attention as the “New Three” (new energy vehicles, lithium batteries, and

photovoltaic products) accelerate their global expansion.

• Export enterprises will strengthen ESG compliance.

• Chinese companies operating overseas will face growing additional ESG

requirements from international financial institutions, including performance

ratings, information disclosure, and carbon emissions.

• Enterprises must not only ensure ESG compliance but also fulfill their social

responsibilities.
Source: SynTao Green Finance. 36
Trend 3: Standardization and Growth of ESG Information Disclosure
Progress in 2024

• Shanghai, Shenzhen, and Beijing Stock Exchanges released guidelines for sustainable

development reports.

• China’s Ministry of Finance issued the Basic Guidelines for Corporate Sustainability

Disclosure

• Hong Kong Stock Exchange introduced new climate-related information disclosure rules.

• Hong Kong Institute of Certified Public Accountants released the Hong Kong Financial

Reporting Sustainability Disclosure Standards (HKFRS S1 and HKFRS S2).

• The International Sustainability Standards Board (ISSB) standards are gradually being

implemented.

Source: SynTao Green Finance. 37

Trend 3: Standardization and Growth of ESG Information Disclosure

Forecast for 2025

• The number of ESG reports from listed companies will grow rapidly, and their

quality will significantly improve.

• The demand for ESG report verification will increase to enhance reliability.

• Industry-leading listed companies will pioneer new disclosure requirements in the

2024 fiscal year.

Source: SynTao Green Finance. 38

Trend 4: Application Scenarios of ESG Ratings Are Gradually
Expanding
Progress in 2024

• China’s ESG rating market has developed over the years and become mature.

• The number of ESG rating institutions with commercial application scenarios is

gradually concentrating, and the standardization and transparency of rating

methods are increasing.

• Overseas sustainable development-related regulations and policies drive supply

chain ESG compliance.

Source: SynTao Green Finance. 39

Trend 4: Standardization and Growth of ESG Information Disclosure
Forecast for 2025

• Traditional ESG ratings will become more segmented, dividing the overall ESG performance

evaluation of listed companies into assessments of transformation capacity, green revenue,

and biodiversity risk, among others.

• The evaluation scope will expand from listed companies to debt issuers and non-listed

companies.

• Application scenarios will extend from asset management to bank loans, supply chain

evaluations, and government financial incentives.

• Industries with long supply chains and a high degree of internationalization, such as

textiles and apparel, electronics manufacturing, and new energy vehicles, will be key

application areas for supply chain ESG evaluations and ratings.

Source: SynTao Green Finance. 40
Trend 5: Rapid AI Development Highlights the Importance of Tech
Ethics
Progress in 2024

• AI has brought negative issues such as energy consumption, privacy security, and copyright

protection.

• The development of AI has caused devastating impacts on certain industry jobs.

• Tech companies face ethical dilemmas arising from product innovation.

• Example: Controversies triggered by autonomous taxis.

Source: SynTao Green Finance. 41

Trend 5: Rapid AI Development Highlights the Importance of Tech
Ethics
Forecast for 2025

• Regulatory bodies and industry organizations, such as the EU and the World AI Conference, will

release relevant bills and declarations.

• For example: EU’s AI Act, the Shanghai Declaration on Global AI Governance from the World AI Conference, etc.

• The sustainability report guidelines from the Shanghai, Shenzhen, and Beijing Stock Exchanges require

companies engaged in scientific research and technological development in tech ethics-sensitive fields

such as life sciences and artificial intelligence to disclose their compliance with tech ethics during the

reporting period, including ethical norms, management systems, accountability, and rectification

measures.

• Tech companies of all sizes must prioritize tech ethics to avoid “black swan” events.

Source: SynTao Green Finance. 42

 Global supply chain ESG risk

In today’s complex global landscape, the new era of risk management, gaining visibility into the
often-overlooked risks within supply chains is more crucial than ever.

Source: https://www.eiq.com/reports-and-whitepapers/2025-supply-chain-esg-risk-outlook/ 43
 Global supply chain ESG risk highlight

• EiQ data indicates that, globally, risk is rising for many critical supply chain
ESG issues and violations.
• Child labour is showing increasingly problematic trends in key countries and
global averages for health and safety violations.
• Labour issues, business ethics (encompassing issues related to business
integrity and transparency), as well as management systems (relating to
documentation and managerial practices), all showed higher risk from the
previous year.
• 60% of sourcing markets show high or extreme risk for environmental-related
violations.
• ……

Source: https://www.eiq.com/reports-and-whitepapers/2025-supply-chain-esg-risk-outlook/ 44
Drivers of ESG Integration in Supply Chain Management

Supply chains represent a complex web of activities, entities, and relationships,

each playing a pivotal role in the overall performance of a business. They have a

profound impact on a wide range of ESG issues, from resource extraction and

carbon emissions to labor practices and community engagement. Given their

expansive reach, supply chains offer a powerful leverage point for implementing

ESG initiatives that can lead to improved sustainability outcomes, risk

mitigation, and enhanced competitive advantage.

Reference: Sarkis, J., Zhu, Q., & Lai, K. (2011). “An organizational theoretic review of green supply chain management literature.”
International Journal of Production Economics, 130(1), 1-15. DOI: 10.1016/j.ijpe.2010.11.010 45
 Regulatory Pressures and Compliance
Governments and international bodies are setting stringent regulations to
ensure companies contribute to sustainable development. These
regulations compel businesses to integrate ESG into their supply chains
to comply with legal standards, avoid fines, and maintain their license to
operate.
• Germany’s Supply Chain Due Diligence Act
• California Transparency in Supply Chains Act
• OECD Guidelines for Multinational Enterprises
• French Corporate Duty of Vigilance Law
• Norwegian Transparency Act
• EU’s Sustainable Finance Disclosure Regulation (SFDR)
……
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 Supply Chain Compliance

• To keeping their supply chains safe and in line with local

regulations, industries’ needs vary.

• Responsible supply chain is about ensuring that members of the

supply chain act responsibly for the well-being of all people and
Mother Earth.

• It involves both the environmental responsibility side and the

social responsibility side. On top of this, responsibility also
entails ensuring that products sold to consumers are authentic
without having been adulterated, and that the processes
throughout the supply chain are run in an ethical manner.

CDP
https://www.youtube.com/watch?v=IeT-8UGMuEs&t=4s
47
 Regulatory Pressures and Compliance

Reference: EcoVadis. (2024, January 14). Using the Wave of Supply Chain ESG Laws to Rethink Risk and Resilience Strategy.
https://resources.ecovadis.com/blog/wave-of-supply-chain-esg-laws-to-rethink-risk-and-resilience-strategy 48
 Stakeholder Expectations and Demands
Government requirements
• regulations and compliance (e.g., EU Non-Financial Reporting Directive)
Investor expectations
• Investors increasingly screen for ESG risks as part of due diligence
• Long-term value creation tied to sustainable supply chain practices
• Pressure for transparency and accountability in ESG reporting
Consumer activism
• Rise in consumer demand for ethically sourced products
• Expectations for companies to provide comprehensive supply chain visibility
• Consumer support for brands with strong ESG commitments
References:
European Parliamentary Research Service. (2021). Implementation Appraisal: Non-financial Reporting Directive. European Parliament.
https://www.europarl.europa.eu/RegData/etudes/BRIE/2021/654213/EPRS_BRI(2021)654213_EN.pdf
Principles for Responsible Investment. What are the Principles for Responsible Investment?
https://www.unpri.org/about-us/what-are-the-principles-for-responsible-investment
EY Americas. (2021, January 4). Why sustainability has become a corporate imperative. EY - US.
https://www.ey.com/en_us/strategy/why-sustainability-has-become-a-corporate-imperative 49
 Supplier engagement
• Collaborate for sustainable practices and certifications (e.g., ISO 14001, SA8000)
• Encourage transparency throughout the supply chain
• Develop long-term relationships with suppliers
• Encourage a continuous improvement mindset towards sustainability
Employee satisfaction
Employees feel a sense of pride and fulfillment when they work for a company that
prioritizes ESG values, which can increase job satisfaction and loyalty
• Younger generations of workers are particularly drawn to companies with strong
ESG commitments, making ESG integration a key tool for attracting these
demographics.
• A company’s commitment to ESG can contribute to a more positive and healthy
work environment, which is a significant factor in employee satisfaction.

References:
Social Accountability International. SA8000 Standard. https://sa-intl.org/programs/sa8000/
Bhattacharya, C. B., Sen, S., & Korschun, D. (2008). “Using Corporate Social Responsibility to Win the War for Talent.” MIT Sloan Management
Review, 49(2), 37-44. 50
References:
McKinsey & Company. (2009, February 1). Valuing corporate social responsibility: McKinsey Global Survey results.
https://www.mckinsey.com/capabilities/strategy-and-corporate-finance/our-insights/valuing-corporate-social-responsibility-
mckinsey-global-survey-results 51
 Risk management and resilience

• ESG as a Risk Lens: Assess supply chain vulnerabilities through environmental,

social, and governance perspectives.
• Proactive Risk Mitigation: Anticipate and manage potential disruptions from ESG-
related issues in the supply chain.
• Resilience through Sustainability: Leverage ESG to build robustness in the supply
chain against global crises, such as pandemics and climate change.
• Enhanced Agility: Quickly adapt to new ESG challenges and opportunities in the
supply chain.

References:
Lund, S., Manyika, J., Woetzel, J., Barriball, E., Krishnan, M., Alicke, K., Birshan, M., George, K., Smit, S., Swan, D., & Hutzler, K.
(2020, August 6). Risk, resilience, and rebalancing in global value chains. McKinsey & Company.
https://www.mckinsey.com/capabilities/operations/our-insights/risk-resilience-and-rebalancing-in-global-value-chains 52
 Market competitiveness and brand reputation

• Positive public perception tied to sustainability

• ESG as a differentiation factor

• Long-term value creation through sustainable practices

• Greater loyalty for brands with strong ESG records

References:
Reinhardt, F. L., Serafeim, G., & Eccles, R. G. (2021). Why Every Company Needs a CSR Strategy and How to
Build It. Harvard Business Publishing. 53
 Environmental risk in supply chain

• Environmental concerns
• Greenhouse gas/carbon emission impact
• Pollution and waste
• Hazardous materials management
• Recycling and circularity
• Animal rights and trafficking
• Maintaining biodiversity
• Deforestation
• Water conservation and management
• Air quality
• Energy management

54
 Environmental factors in supply chain

Reducing Carbon Footprint

• Transition to low-emission transport modes
• Investment in renewable energy
• Example: Maersk’s eco-friendly shipping initiatives

Waste Reduction
• Implementation of circular economy principles
• Recycling and upcycling within supply chains
• Example: Adidas’s use of recycled materials in products

55
 Environmental factors in supply chain

Resource Efficiency
• Energy-efficient manufacturing processes
• Water conservation in production
• Example: Tesla’s sustainable energy integration in factories

Sustainable Sourcing
• Ethical procurement of raw materials
• Support for sustainable agriculture practices
• Example: Nestlé’s Responsible Sourcing Standard

56
 Best Practices and Compliance in Eco-Friendly Supply Chains

• Eco-Design and Packaging

Designing products for longevity and recyclability
Minimizing packaging materials
Example: Unilever’s commitment to recyclable packaging
• Regulatory Compliance
Adherence to international environmental standards
Example: IKEA’s IWAY Standard for environmental compliance
• Environmental Certifications
Pursuing ISO 14001 and other eco-labels
Example: Patagonia’s Fair Trade Certified™ and organic cotton lines

57
 Social risk in supply chain
• Human rights
• Modern slavery
• Human trafficking
• Forced & child labor
• Conflict minerals
• Social discrimination
• Worker rights
• Fair wages
• Product and workplace safety
• Diversity, equity and inclusion
• Supporting charities and social enterprises
• Promoting employment
• Data privacy 58
 Social factors in supply chain

Labor Standards and Working Conditions

• Enforcing fair labor practices globally
• Safe and healthy working environments
• Example: H&M’s Fair Living Wage strategy

Community Engagement and Development

• Local sourcing and support for small businesses
• Collaborative projects with local communities
• Example: Starbucks’s Community Stores program

References:
International Labour Organization (ILO). (2023). Decent Work in Global Supply Chains.
World Business Council for Sustainable Development (WBCSD). (2022). Social Impact Measurement and Valuation.59
 Social factors in supply chain

Diversity and Inclusion

• Inclusive procurement from diverse suppliers
• Representation across supply chain roles
• Example: Intel’s Supplier Diversity initiative

Consumer Safety
• Prioritizing product safety and transparency
• Rigorous testing and quality assurance
• Example: Johnson & Johnson’s Safety & Care Commitment

References:
Business for Social Responsibility (BSR). (2021). Human Rights in Supply Chains: A Call to Action.
United Nations Global Compact. (2022). Guide to Corporate Sustainability. 60
 Strengthening Society Through Supply Chain Practices

• Training and Education Programs

• Skill development and capacity building
• Partnerships with educational institutions
• Example: Cisco Networking Academy
• Health and Nutrition
• Promoting access to healthier products
• Addressing nutritional challenges in supply chain
• Example: Danone’s commitment to health-oriented products
• Human Rights
• Zero tolerance for child labor and exploitation
• Upholding the rights of workers throughout the supply chain
• Example: Nestlé’s Child Labour Monitoring and Remediation System

61
 Governance risk in supply chain
• Leadership
• C-level changes
• Board of directors
• Management team members
• Compliance with laws and regulations
• Fraud, corruption and sanctions
• Money laundering
• Tax evasion
• Business in high-risk locations
• Layoffs
• Liquidity problems
• Supply chain oversight
• Data breach
• Misleading communication (greenwashing) 62
 Governance factors in supply chain

Compliance with Regulations

• Adherence to international trade laws
• Conformity with labor and environmental regulations
• Example: Samsung’s compliance with global trade standards
Risk Management
• Mitigating operational and financial risks
• Implementing robust anti-corruption policies
• Example: Apple’s Supplier Code of Conduct and risk assessments

63
 Governance factors in supply chain

Transparency and Reporting

• Full disclosure of supply chain operations
• Regular sustainability and CSR reporting
• Example: Unilever’s Sustainable Living Plan Progress Reports
Corporate Governance
• Board oversight of supply chain issues
• Ethical governance and leadership practices
• Example: Procter & Gamble’s Leadership Code

64
 Implementing Effective Governance in Supply Chains

• Partnership and Collaboration

• Engaging with suppliers on governance issues
• Forming alliances for sustainability goals
• Example: Walmart’s Project Gigaton initiative
• Supply Chain Audits
• Regular audits for compliance and ethical practices
• Third-party verification of supply chain standards
• Example: Nestlé performing SMETA audits as part of their Supplier Code
• Technology and Innovation
• Utilizing blockchain for traceability and transparency
• Investing in technologies to streamline compliance
• Example: IBM’s Food Trust blockchain initiative

65
 Manage Supply Chain ESG Risk

Manufacturers need better tools to manage the ESG impacts of

their supply chain while avoiding painful breakdowns.

Source: https://www.bcg.com/publications/2023/managing-esg-issues-in-global-supply-chains 66
谢谢THANK YOU

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