ESG – Environmental and Social Governance – has become a watchword in recent years.
Businesses are increasingly under pressure to prove that they operate in an ethical way – benefiting, rather than jeopardising, the environment and wider society.
In terms of investments and business operations, this pressure to be transparent around ESG has led to much progress. When it comes to marketing supply chains, however, it can be a different story.
Here, we look at the ESG risks your marketing supply chain may be exposing you to – and the action you can take to minimise and mitigate them.
Why ESG matters now
Recent years have seen companies being held accountable as never before for their environmental and social behaviour.
As a result, we have seen an increase in formalised ESG policies, along with more probing questions from regulators, shareholders and the public at large on issues like:
- Where the firm’s profits, or its client funds, are invested
- How businesses manage their day-to-day operations
- The checks and controls they have over their operational supply chain
However, while significant progress has been made with the first two, the marketing and investor communications supply chain has lagged. The potential reputational risks posed by these marketing and communications supply chains, though, shouldn’t be under-estimated.
ESG in the marketing supply chain
Like most business operations, marketing and communications often entails a complex supply chain. With many businesses now encouraging their employees to work remotely, there is growing opportunity for maverick purchasing behaviour in “getting the job done”, thus significantly increasing the opportunity for noncompliance. This is particularly the case if you’re delivering services across multiple territories, where the central marketing team may be far-removed from local suppliers and approaches.
And yet the marketing supply chain often trails other areas when it comes to enforcing ESG credentials. Slightly ironic when your ESG performance itself can be a compelling marketing advantage; as a report from Allianz notes, ‘Having a sustainable supply chain may…uncover potential for innovation and market differentiation’.
How does your organisation perform when it comes to marketing ESG?
- Do you currently check and qualify and report on third-party vendors’ environmental and social credentials?
- Can they track and evidence their own ESG performance against your firm’s ESG policy?
What ESG risks does marketing face?
ESG risks are many and varied. By not taking a rigorous approach to ESG in your marketing supply chain, you open your business to risks around:
- Environmental pollution
- Shortages of raw materials and natural resources
- Workforce health and safety failings
- Labour disputes
- Corruption and bribery
- Geopolitical considerations – are you at risk of buying from countries on a sanctions list?
Benefits of tracking ESG through the marketing supply chain
On the other hand, the benefits of properly managing ESG are equally compelling:
- Manage and minimise reputational risks
- Reduce the risk of supply chain disruption due to ESG issues
- Cut compliance and regulatory risks by taking a proactive approach to ESG management
In addition, creating a sustainable supply chain for your printed marketing and communications collateral can often unearth other benefits, by uncovering innovations and points of potential market differentiation.
How can marketing technology help?
And all this on top of other non-ESG benefits including:
- Increased productivity
- Improved security
- Optimised efficiency via automated processes
- Reduced risk of regulatory compliance breaches
- Improved usability and user-friendliness
ESG in the marketing supply chain – a case study
To illustrate how a review of – and more ESG-focused – marketing supply chains can help companies to meet their ethical goals, Perivan recently worked with a client to review a high-volume printed product they used. The process resulted in a report on the ESG credentials of both the product itself, and the supply chain partner who manufactured it.
After reviewing the report, the client and Perivan worked together to create a revised specification that removed all single-use plastics from the process, introduced paper that could be carbon offset, and changed the delivery courier requirements to a revised model with a much-reduced carbon footprint.
Once the revised specification had been added to Perivan’s Enable martech platform, all suppliers in all territories used the new specification product, with the client able to evidence and report measurable gains.
You can find out more about Enable, and how it can improve your marketing supply chain, on our website.
Nothing in this document should be treated as an authoritative statement of the law. Action should not be taken as a result of this document alone. We make no warranty and accept no responsibility for consequences arising from relying on this document.