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Inrate Study: Supply Chain Management

Sep 23, 2017

Why Sustainable Supply Chains Matter

Globalization has enabled companies to outsource their production processes to external suppliers and to relocate their production sites. As supply chains become increasingly vulnerable to uncertainties, corporations face difficulties in identifying and managing the environmental and social impacts. Among the sectors that are particularly vulnerable to these risks are agriculture, food and beverage processing, manufacturing and construction. In the face of growing public awareness and legal obligations, companies have come to recognize their responsibility in managing risks along their supply chains.

As supply chain awareness gains traction, companies are encouraged to monitor the operations of their suppliers and ensure that they meet certain environmental, social and governance (ESG) standards. Failure to identify sustainability issues in supply chains can pose a risk for companies and for that reason transparency and accountability are increasingly prioritized. Notwithstanding the risks, many companies are still in the early stages of developing the tools and practices needed to identify, engage and manage these issues.

To minimize risk, investors should threrfore ensure that they invest in companies whose supply chains comply with certain ESG standards. How to identify such companies and other valuable insights into supply chain sustainability can be found in our Supply Chain Management Study.

 

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Financial market infrastructure provider SIX announced today the launch of a new climate data offering, aimed at supporting investors in reporting and monitoring of climate factors, and in climate-related investment and risk decision making.

The climate data sets, from various data providers in a range of industries, will provide clients with modelled and reported emissions data, covering over 33,000 companies globally, and bringing together multiple data sets on regulatory, historical and forward-looking climate impacts from providers including MSCI and Inrate. SIX also announced that it has recently entered into an agreement with environmental disclosure platform CDP to offer access to its global Greenhouse Gas (GHG) Emissions Dataset across various industries.

According to SIX, the new data sets come as investors increasingly require ESG and climate data to monitor investment decisions and to meet growing regulatory disclosure requirements, including the EU’s SFDR and the U.S.’ upcoming SEC Climate Disclosure Rules.

Martina Macpherson, Head ESG Product Strategy and Management, Financial Information, SIX, said:

“Understanding, measuring and managing climate risk and opportunities, as well as the impact that these can have on investment decisions, is a critical area of focus for market participants and policy makers alike. As more climate risk monitoring and reporting is required globally, the cost of compliance is increasing – both in operations and in terms of specialist ESG resources. SIX works with established providers of basic and specific ESG and climate data in the market.”