Taking a Step Beyond Financial Risk

With expanding consumer eco awareness and new climate legislation in the foreseeable future, it is now more important than ever for executives to understand business sustainability risk. While many companies we speak with in our sustainability consulting have processes in place to assess financial risk, only a select few have the tools to effectively assess the social and environmental risks that can have an equal if not greater impact on business sustainability.

Risk approaches a business from every angle, and a critical and sometimes challenging area to assess and manage risk is within the supply chain.   The businesses we work with typically have or are adopting risk assessment tools to assess financial risk. According to a Corporate Executive Board survey, some of the more commonly used services include:

•    DNBi
•    Moody's Credit Edge
•    S&P InfoNgen
•    Capital IQ
•    Lexis Nexis Due Diligence Dashboard
•    Global Credit Services

While we find these services have the ability to assess and mitigate supplier financial risk, some companies are taking supply chain sustainability risk mitigation and management a step further. These organizations are redefining supply chain management, with sustainability as a critical risk assessment criterion and implementing new businesses sustainability strategies with suppliers. Some of our clients are currently working on:

•    Incorporating corporate sustainability values into sourcing and procurement decision making.
•    Establishing a framework for supplier qualification.
•    Developing new supplier sustainability performance metrics.
•    Working with the existing supply base to integrate sustainability concepts into material sourcing, manufacturing, and distribution.

Our professional consulting views sustainable supply chain management as an opportunity to review processes, materials, and operational concepts from a different perspective. By integrating core sustainability values into the supply chain, your company can not only create sustainable business value but reduce financial, social, and environmental risks resulting from growing eco awareness and pending legislation.

At Taiga Company, we provide information and business resources to clients of all sizes seeking to make incremental steps towards a sustainable supply chain.