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 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 relevant systems like communities, ecosystems, or watersheds. Then build an understanding of each system’s current conditions and its stability thresholds (for a backgrounder on thresholds see here). Threshold examples include the points at which water withdrawal in a catchment area leads to water scarcity, wealth inequality may spark community unrest, or social conditions may enable forced labour or slavery.1 To identify such thresholds, draw on internal and external insights, local community knowledge, scientific research, and third-party data. Having a clear scope, key indicators, and reliable data will help you spot trends and risks, allowing you to take action proactively.2

EXAMPLE: How Apple identifies supply chain 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 studies water scarcity in its barley supply chain

SABMiller studied barley farming's environmental and social impacts on the context of water scarcity in Rajasthan, India. The findings highlighted the intertwined nature of water, food, and energy security. This insight guided the company towards a more comprehensive approach to assisting farmers in its barley program.4

Monitor emerging sustainability regulations and guidance

The advancement of sustainability regulations will likely impact your value chain. Here is how to stay ahead of them. First, establish a team to monitor legislative trends.5 Consider also 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, agreements that exclude the use of particular chemicals.8

To better understand the implications of new legislation, you may want to consult legal experts for clarification and proactively engage regulators. Scenario planning can also be a useful tool for assessing potential regulatory impacts.

Taking a proactive, systematic approach to monitoring regulatory trends will help you manage risk and recognise new opportunities. For instance, it can help you align with emerging consumer values and prepare for future legislation. Regulatory changes may also present opportunities, such as rewards and subsidies for sustainability efforts or investment.9

EXAMPLE: US Senate Bill on Xinjiang forced labour

The US Senate bill restricting goods manufactured in Xinjiang, China, demonstrates the trend towards 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. It explains why companies need to consider them when developing their corporate strategy in order to take meaningful action.

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Sustainability Issue Snapshots

This tool by the Embedding project provides a comprehensive overview of sustainability issues. For each issue it curates a set of resources to help you better understand and address it.

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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 to 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 large 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. It categorises potential risks into operational, financial, and reputational impacts. Examples and details are provided for each.