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The majority of retailers still do not correlate ESG aspects with the supply chain
A study conducted by Amcham Brazil in partnership with Humanizadas consultancy analyzed the readiness for innovation and the adoption of trends in 694 companies from various sectors. The results reveal that, for six out of ten retail executives, strengthening relationships with suppliers is crucial for driving growth, alongside brand management, reputation, and customer loyalty.
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What is ESG?
“ESG” stands for Environmental, Social, and Governance. These are three factors used to measure the sustainability and societal impact of an investment in a company or business. Environmental criteria consider how a company performs as a steward of nature. Social criteria examine how it manages relationships with employees, suppliers, customers, and the communities where it operates. Governance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights.
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Strengthening supplier relationships and ESG aspects
Although the importance of supplier relationships is recognized, the research reveals a gap in the correlation between this strengthening and environmental, social, and governance (ESG) aspects. Only 20% of the surveyed retailers believe that ESG actions can drive the growth of their companies. However, a robust sustainability strategy, which includes close relationships and supply chain tracking, can prevent legal and reputational risks, as well as generate positive financial impact.
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Adoption of ESG criteria and sustainability
For more than half of the respondents, the adoption of ESG criteria and sustainability strategies will be one of the main factors impacting their organizations in the coming years. However, many executives still underestimate the innovation potential of logistics and supply chains, recognizing a low execution capacity in this area. This highlights the urgent need to deepen understanding of ESG aspects and their impact on business reputation and sustainability.
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How can a company begin to incorporate ESG criteria into its operations?
To begin incorporating ESG criteria, a company can assess its current performance against these criteria, identify areas for improvement, establish clear goals and metrics, engage relevant stakeholders, implement sustainable policies and practices, and regularly monitor and report its progress.
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Conclusion
The study by Amcham Brazil and Humanizadas emphasizes the importance of strengthening supplier relationships and integrating ESG criteria into relationship management. This approach not only drives the growth and reputation of retail companies but also enhances their long-term sustainability. It is essential for retail executives to educate themselves and raise awareness about the positive impacts that an ESG approach can bring to their businesses, preparing them for the challenges and opportunities of the future.
