Most CEOs worried about ESG supply chain violations - report

Most British CEOs are concerned about human rights issues in their supply chains, research suggests.

The study found that 67% worry about ESG supply chain transgressions, with the highest level of concern in the construction sector (77%), leisure and hospitality (77%), retail (72%), and the food and beverage manufacturing sector (70%), the survey found. 

The survey was commissioned by procurement consultancy Proxima, who surveyed 1,000 UK CEOs about their approach to supply chain issues.

The findings echo those of another recent supply chain ESG report that shows half of all countries are now considered to be high risk when it comes to ESG issues around sourcing, including the USA and the UK.

That report says countries such as the UK and USA are seeing higher ESG risk due to a rise in the exploitation of foreign migrant workers.

According to the Proxima survey, almost half of UK bosses (49%) say they expect to spend more time focusing on supply chain issues in the next 12 months.

It also found that 42% are considering onshoring as a way to prevent disruption and improve transparency, while more than a third (36%) say they are looking at nearshoring as a way to achieve this.

Addressing ESG in supply chain 'huge challenge'

Proxima CPO Simon Geale said: “Addressing human rights issues across the supply chain is a huge challenge for businesses and it is clearly high up on the agenda for CEOs

“We’ve seen a number of businesses fall victim to human rights issues and, as we see increased scrutiny from customers and regulators, supply chain transparency is going to become increasingly critical.

“This is the emerging priority for CEOs at a time when business leaders are spending more time than ever tackling supply chain issues.”

James Butcher, CEO of supplier engagement company Supply Pilot said: “Supply chain disruption means CEOs are focused on their supply chains but unfortunately this at the expense of progress on sustainability.”

Neil Robson, Partner at multinational law firm Katten said that concern with issues around human rights and labour rights in the supply chain has grown in recent years, following the requirements of the UK Modern Slavery Act.  

“Addressing human rights issues across the supply chain is a huge challenge. Businesses that hold themselves out as ESG-compliant must address their sustainability and good governance, but must also understand their impact on their entire supply chain and do their best to ensure they are doing the right thing for all concerned.”