Better engagement on sustainability means better risk management, the CIPS SM Forum was told © Marco Cantile/LightRocket/Getty Images
Better engagement on sustainability means better risk management, the CIPS SM Forum was told © Marco Cantile/LightRocket/Getty Images

Correlation between sustainability and coronavirus risk

Will Green is news editor of Supply Management
12 March 2020

Organisations that embrace sustainability are better able to manage black swan events such as the coronavirus outbreak, an event was told.

The CIPS SM Forum in London heard that investigating issues such as modern slavery in supply chains had a beneficial impact on all risk.

Jim Carter, commercial director at the Ministry of Defence, said: “If you think about coronavirus and the impact on your supply chain, suppliers who have better engagement on sustainability issues can manage the risk on coronavirus as well. If you know where modern slavery risks are, you probably know where the [coronavirus] risks are.

“There is a correlation between suppliers who lean into the sustainability agenda and an ability to manage macro risks.”

During a panel discussion on the interdependence of buyers and suppliers, Scott Collins, CEO of consultants Hawtrey Dene, said pushing risk around sustainability onto suppliers did not work. “Push risk down the supply chain, you will pay for it one way or another: either you won’t get your goods or they will price that risk into it,” he said.

Nikki Hunter, head of procurement at youth programme non-profit National Citizen Service Trust, said 60% of their suppliers were SMEs and there was no one-size-fits-all solution to promoting sustainability. “Understand where the biggest risks are in terms of sustainability,” she said. “It’s moved from a nice-to-have to a must-have.”

Hunter, recollecting tense meetings with suppliers where it was “guns at dawn”, said: “The relationship should be one of open conversation. They know the products they supply better than you and they can come up with good ideas.”

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