Sustainability is fast becoming an essential part of doing business. To understand where manufacturers stand on environmental, social, and governance (ESG) issues, Assent worked with Endeavor Business Media, a well-respected publication company covering the manufacturing space, to report on the state of ESG in the manufacturing sector. 

Here are the top findings: 

  • 76% of manufacturers are at the planning or foundational stages of supply chain ESG maturity
  • 69% expect their supply chain ESG/sustainability investments to increase in the next year
  • 80% say their organizations are somewhat to extremely dependent on partners and suppliers to help them achieve supply chain sustainability/ESG goals
  • 59% expect this dependency on their partners and suppliers to increase in the next year
  • 25% of respondents reported having high confidence in the capabilities of their partners and suppliers to support their ESG/sustainability goals
  • 31% said they are highly confident in the quality and accuracy of their organization’s supply chain data

Low ESG Maturity: Is It a Bad Thing? 

Over three-quarters of respondents said their ESG programs were at the planning, beginning (basic compliance), or foundational (moderate) maturity stages. 

The large number of manufacturers with low ESG maturity could be seen as a bad thing as it creates regulatory non-compliance and brand risk for manufacturers. However, this statistic also represents an opportunity. 

Manufacturers that are in the early stages of ESG maturity aren’t alone, and businesses that implement programs to meet investor, consumer, and c-suite demands for greater sustainability will be at a competitive advantage, establishing themselves as sustainability leaders.

Depending on Suppliers for Data: A Risky Move? 

Eighty percent of respondents said their organization was somewhat to extremely dependent on third parties to achieve sustainability goals. Further, 59% of manufacturers expect they will be increasingly dependent on suppliers and partners to meet ESG/sustainability goals in the coming year. 

This overreliance creates problems for manufacturers as they bear the responsibility for suppliers’ actions — suppliers that often don’t understand ESG regulations or standards, or why those regulations and standards are relevant to them. As a result, these third parties might be using substances or engaging in practices that create risk for manufacturers. 

Manufacturers Lack Confidence in Suppliers’ Data 

Less than one-third of manufacturers surveyed said they had high confidence in the quality and accuracy of their organization’s supply chain data. Additionally, only a quarter of manufacturers said they had high confidence in their partners’ and suppliers’ ability to support their ESG/sustainability goals.

These figures also spell trouble for manufacturers; without accurate data from suppliers they can trust, manufacturers are at risk for things like product recalls and loss of market access. 

The Good News: Greater Investment in ESG

Even though many manufacturers are still in the early stages of ESG maturity, there’s still good news: 69% of respondents expect their supply chain ESG and sustainability investments to increase in the next year. 

What’s driving this investment? Investor and consumer demand play a significant role. The risks ESG poses to supply chains — environmental damage, supply chain delays, and poor brand image — all decrease the value of investments, so it makes sense for investors to prioritize sustainable manufacturing.

Consumers care more about ESG, too. A PwC survey showed 83% of consumers think companies should actively shape ESG best practices, and over three-quarters would stop doing business with organizations that treat the environment, employees, and their communities poorly.

How Assent Can Help

Keeping track of evolving global ESG regulations, reporting obligations, and compliance requirements is only going to become more challenging. To cope, manufacturers need defensible data and expert insights into the regulatory landscape. 

Assent’s ESG solution provides the hard data manufacturers need to meet ESG requirements, allowing them to focus their efforts on what they do best. Backed by industry-leading subject matter experts with decades of experience, our platform helps manufacturers on their journey toward deep sustainability.

To learn more, download the report.

Sarah Carpenter
Director, Corporate Responsibility

Sarah specializes in promoting business respect for human rights globally. Following the 2013 Rana Plaza collapse in Bangladesh, she took on a leadership role as an advocate and influencer for human  Read More

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