SUSTAINABILITY
As He gives as an example Indirect suppliers and commodity supply chains .
“ These are often considered out of scope ,” he says , “ but have demonstrated gaps in responsible sourcing , especially concerning vulnerable populations .”
He adds : “ This has exposed out-of-date assumptions about risk evaluation , leading businesses to wonder if they have been evaluating risk in the right way .”
He advises that a “ more nuanced approach ” is vital here “ as supply chain scrutiny is expected to intensify in 2024 ”.
Spaulding identifies AI as another factor impacting ESG issues .
“Out-of-date assumptions about risk evaluation are leading businesses to wonder if they ’ ve been evaluating risk in the right way ”
IAN SPAULDING , CEO , LRQA
“ The ongoing proliferation of technology solutions , including those powered by AI and machine learning , has created a need for better harmonisation in risk management methodology and due diligence ,” he says .
Spaulding adds The Global Trace Protocol – which enables verification of socially responsible sourcing decisions – “ has sought to meet these growing needs by helping monitor risks to ensure that supply chains are free of exploitative labour practices ”.
“ It seeks to solve a number of challenges including complex , opaque , shifting supply chains and the need for upstream visibility and due diligence ,” he adds .
Spaulding concludes that , as global companies search for better and more efficient technologies to benefit risk management , the coming year “ will no doubt see organisations leveraging AI algorithms to analyse vast datasets for compliance with ESG standards ”.
This , he feels , “ will allow risks associated with labour practices , environmental impact
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