- We are all becoming more aware of environmental,
social and governance issues, or ESG for short.
In this video, we'll look at two different ways
that we can measure the ESG impacts of our supply chain.
One way to analyze the broader impacts of a supply chain
is to think in terms of the trip bottom line,
people, planet and profit.
Looking at the impacts your digital transformation
has on people should consider the people who work
in your organization and throughout your supply chain.
It should also include the communities
in which you do business, as well as your customers.
And last but not least, you can think about the impacts
that your supply chain project
could have on people throughout the world.
People impacts can include things like social justice,
racial and gender equality,
child labor, and modern day slavery.
The impacts that digital transformation has on the planet
are related to environmental sustainability.
From a supply chain perspective, this could include changing
the materials that we use in a product.
Or changing the energy sources that support our operations.
It could also include changes
to how we package and transport products.
Or what happens to our products
after our customers are done using them.
For example, can our products be reused or recycled?
Last but certainly not least,
we always need to think about the impact
that digital transformation can have on a company's profits.
The financial benefits for a project can usually be measured
as a reduction in costs, an increase in revenues,
an increase in profits, the opportunity to avoid costs,
or the opportunity to reduce risk.
A different approach to managing environmental,
social and governance impacts is to adopt
the United Nations' Sustainable Development Goals.
The SDGs fall into four categories,
human rights, labor, environment, and anti-corruption.
The United Nations Global Compact is an initiative
that encourages companies to voluntarily participate
in the effort to achieve the ESGs.
And they provide tools to help with the process.
Many companies have signed onto the Global Compact,
and you can learn more about it on their website.
When it comes to digital transformation,
there's a lot more at stake in supply chains
than just improving profitability
or reducing our working capital requirements.
Identifying the impacts on environment,
sustainability and governance paints a more
complete picture of what we're doing.
And can help us gain greater support
from all of our stakeholders.