Chain Reaction Podcast Environment Social Governance (ESG) – Concepts Explained in Under 5 Minutes

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This episode takes a look at ESG and its relevance for supply chain management. This is part of the series explaining supply chain concepts in under 5 minutes. ESG is a way of assessing risk in relation to environment, social and givernance factors. When it thcomse to protecting or minimising the harm done to the environment through industrial or business processes a company's supply chain is critical. How organizations procure, produce and distribute their products can impact beyond the organization. For example, choices in relation to transport and distribution can result in higher or lower CO2 emissions. The fule used to produce goods can be green energy usuing renewable sources or it can be fossil fuel (oil, gas, coal) and the output can benefit or harm the environment depending onthose choices. Social conditions are influenced by the way organizations structure their arrangements with other companies to procure and produce goods. For example, if you choose to source from countries where their employment conditions exploit people the n you are contributing to the harm done to that community regardless of the income they earn from your purchase. This may seem a harsh assessment but it is a fact. If you want to be ethical and sustainable the way forward is to ensure that you influence social conditions across your supply chains by maintaing standards applied consistently across the supply chain. Governance is a key mechanism for achieving environmental and social goals.

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