Assess Context


Understand the social, environmental, and regulatory context where you and your value chain partners operate.

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Help your company avoid potential business disruptions by better understanding current and emerging sustainability trends related to your value chain.

Assess the health and resilience of key socio-ecological systems

To ensure the resilience of your value chain, you need to understand key environmental and social trends in the contexts where your value chain partners operate. Begin by recognising the larger systems - like communities, ecosystems, or watersheds. Understand their current conditions and stability thresholds, such as the points at which water withdrawal in a catchment may lead to water scarcity, wealth inequality may spark community unrest, or social conditions may contribute to forced labour or slavery.¹ You could use various resources - internal and external insights, local community knowledge, scientific research, and third-party data. With a clear scope, key indicators, and reliable data, you could spot trends and risks and then strategise to address these issues effectively.²

EXAMPLE: Apple Water Risk

Apple uses tools like the World Wildlife Fund (WWF) Risk Filter and WRI's Water Risk Atlas to deliver detailed, location-specific profiles of water consumption and related risks, helping to formulate effective strategies for areas identified as high water risk, which account for roughly 46% of Apple's corporate water use.³

EXAMPLE: SABMiller conducts a study to understand the sustainability impacts of its barley supply chain in India.

SABMiller studied barley farming's environmental and social impacts when facing water scarcity in Rajasthan, India. The findings, highlighting the intertwined nature of water, food, and energy security, guided a more comprehensive approach to assisting farmers in its barley program.⁴

Monitor emerging sustainability regulations and guidance relevant to your value chain

To stay ahead of sustainability regulations impacting your value chain, you could establish a team or designate someone to monitor legislative trends.Consider using regulatory tracking software or joining industry groups to stay informed.⁶ ⁷ Additionally, keep an eye on evolving industry practices and voluntary agreements that may not be legislated but are becoming the norm (for example, excluding the use of particular chemicals⁸). Consultations with legal experts can help clarify new regulations and their implications. You may also proactively engage with regulators and create scenario plans to assess potential impacts. Monitoring industry trends can help manage risk and recognise new opportunities, allowing you to align with emerging consumer values and prepare for future legislation. Remember, changes can present opportunities, such as sustainability efforts or potential rewards and subsidies. You can navigate changes and bolster your sustainability initiatives with a proactive, systematic approach.⁹

EXAMPLE: US Senate Bill of Xinjiang forced labour

The US Senate bill restricting goods manufactured in Xinjiang, China, demonstrates the trend toward increasing regulatory focus on social issues in global value chains. As a starting point, the bill assumes goods from Xinjiang are produced with forced labour, placing the burden on companies to provide evidence that their value chain is free of forced labour.¹⁰ ¹¹

EXAMPLE: Germany's Supply Chain Due Diligence Act

Germany's Supply Chain Due Diligence Act (SCDDA)¹² forces companies to identify and manage environmental and human rights risks in their supply chains, including child and forced labour. Procurement planners must adapt by ensuring the compliance of direct and indirect suppliers, annually reporting on their due diligence, and potentially facing fines or exclusion from public tenders for non-compliance.¹³

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Why Thresholds Matter

This blog post by the Embedding Project tackles the idea of social and environmental thresholds and why companies need to consider them when developing their corporate strategy, setting credible sustainability goals, and taking meaningful action.

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Sustainability Issue Snapshots

This tool by the Embedding Project provides a comprehensive overview of sustainability issues and a curated set of resources to help you better understand and address each issue or sub-issue.

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Supply Chain Resilience for an Era of Turbulence

This ASCM whitepaper, based on expert interviews, addresses rising supply chain risks from geopolitical shifts, cyber threats, and environmental factors. It guides organisations in enhancing risk management for a new era of turbulence.

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Global Forest Watch

This online platform provides data and tools for monitoring forests, and will help you to access near real-time information about where and how forests are changing around the world. The maps features allow you to visualise and analyse historical trends in tree cover loss and gain since 2000, view land cover, and toggle for various country-specific climate and biodiversity factors. This tool may be particularly helpful to sustainability, oversight, and procurement professionals who are responsible for monitoring illegal deforestation, defending land and resources, and ensuring commodities are sustainably sourced.

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WWF Risk Filter Suite

This resource includes the World Wildlife Fund’s (WWF) Biodiversity Risk Filter and Water Risk Filter. These complimentary tools can help you screen for current and future nature-related risks across your value chain.

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Global Slavery Index

Modern slavery is hidden in plain sight in every corner of the world. Walk Free has created several resources - including a report and interactive map - to help you to better understand modern slavery, including definitions, key drivers, how it manifests, and how we are linked to modern slavery through the products and services we buy. The report features regional findings, sector spotlights, and essays, and is a great resource for change agents who are looking for data and information for priming senior leaders.

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World Report 2022

This annual report by Human Rights Watch reviews human rights trends globally. It is a massive report that includes sections specific to most countries worldwide.

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CIPS: Supply Chain Risk and Resilience

A good practice guide and online tool for enhancing supply chain resilience, categorising potential risk consequences into operational, financial, and reputational impacts, with examples and details for each category.