Companies can now assess the resilience and sustainability of their supply chains, based on benchmarks against their peers across regions and sectors, using a new business chain benchmarking tool. sustainable sourcing developed by Standard Chartered.
The Supply Chain Performance Indicator allows companies to take a âhealth checkâ on their operations and highlights areas they need to focus on to achieve their aspirations. The assessment is based on five indicators: environmental soundness and transparency of direct suppliers and indirect or higher level suppliers; financial solidity; flexibility and adaptability; and collaboration and connectivity across the ecosystem1. Clients can use the results to identify their weak points and seek advice and solutions from the Bank to help them achieve their goals.
The problems exposed by COVID-19 have prompted companies to rethink their supply chains, as the world seeks to rebuild a more sustainable global economy. The tool is developed based on information from Critical Indicators of Sustainable Supply Chains, the Bank’s report which surveyed nearly 1,000 global companies and examined the resilience and sustainability of supply chains in regions and sectors based on the same five indicators – it also offers actionable insights for businesses.
While 90% of those surveyed said sustainability and resilience are strategic imperatives, the survey found a significant gap: nearly two-thirds of companies said their actual performance was below the importance they give each indicator.
Other highlights include:
â¢ Environmental and social practices in the supply chain can potentially be a major source of risk. Only 40 percent of those polled said they were confident they performed very well when they understood and monitored environmental standards and work practices.
â¢ Indirect or higher level suppliers seem to be the weakest link. Only 43 percent of companies consider respect for the environment and transparency of indirect suppliers to be very important.
â¢ The financial resilience of supply chains is uncertain – only 2 in 5 companies consider the financing of indirect suppliers to be very important.
â¢ About 80 percent of companies deploy technology solutions to address supply chain challenges.
While the results show that much remains to be done, the report also highlighted a strong willingness among respondents to work with their financial institutions to close the gaps. They will need to extend their approach to supply chain management beyond operational efficiency, to improve their flexibility and financial soundness, while managing ESG risks. This includes improving access to finance for more financially resilient supply chains, especially for lower tier suppliers who often do not obtain adequate funding; making trade finance transactions more transparent and secure for better visibility of the supply chain; and promoting the adoption of sustainable practices across supply chains.
Simon Cooper, CEO of Corporate, Commercial and Institutional Banking & CEO, Europe and Americas, Standard Chartered, said: âAs we try to rebuild a more sustainable economy, we can help our clients with tools and solutions to make their more sustainable, resilient and future-proof supply chains. Sustainable trade finance products are a way to ensure that complex supply chains adhere to sustainable best practices and help companies meet their sustainability goals while growing their businesses.
The new tool follows the launch of Standard Chartered’s sustainable trade finance proposal in March, strengthening its ability to help companies implement more sustainable practices and build more resilient supply chains. In addition to a growing line of sustainable trade finance products, the Bank also offers trade finance at cost to businesses that meet the criteria of its $ 1 billion COVID-19 funding commitment, launched in March. 2020.