Managing environmental and social risks within supply chains is critical to long term supply sustainability and security. In addition to enabling companies to meet corporate social responsibility goals and sustainability commitments, managing these risks can result in added benefits of reduced volatility, decreased risk of supply interruption, and strengthened relationships with suppliers and producers.
WWF’s approach to sustainable sourcing is informed by data-driven risk tools which are continuously improved upon through best practices. WWF fosters dialogue amongst experts across multiple disciplines and the broader stakeholder community to stay abreast of the latest science-based information. Below are some resources to further inform companies as they implement their own sourcing strategies.
Risk Management Approaches
Internal Risk Management: Internal risk management strategies focus on actions taken by the organization and may not directly include suppliers or other stakeholders. Due diligence processes and development of sustainable sourcing strategies are examples of internal risk mitigation activities.
Supply Chain Risk Management: These activities directly or indirectly involve suppliers, producers or other actors in the value chain. Such activities may include supporting supplier capacity, long-term non-priced agreements, dedicated supply chains, scorecard based purchasing, and joint ventures.
External Engagement Risk Management: External engagement actions involve stakeholders and third parties that may not be directly connected to an organization’s supply chain, and could also include multi-stakeholder type approaches. External engagements may be in the form of purchasing third-party certified products, engaging governments on policy, collaborating with other stakeholders, and supporting producer capacity.
Risk Management Tools
Supply Risk Inquiry (SRI): The Supply Risk Inquiry is a tool that helps companies engage with their suppliers to make progress on their sustainable sourcing journey. It combines stakeholder engagement with in-depth research to provide greater transparency of the environmental and social risks along a supply chain. It also allows for better informed decision-making by the company on that basis.
Water Risk Filter: Water, or the lack of it, can directly affect companies’ profitability and, in turn, investor confidence. In the worst cases, poor water management can force closure or relocation of business operations. This tool helps companies and investors ask the right questions about water. It allows you to assess risks and offers guidance on what to do in response.
InVEST: InVEST is a suite of open-source ecosystem service software models used to map and value the goods and services from nature that sustain and fulfill human life. The models were created by the Natural Capital Project, a partnership between Stanford University, University of Minnesota, The Nature Conservancy, and World Wildlife Fund. InVEST enables decision makers to assess quantified tradeoffs associated with alternative management choices and to identify areas where investment in natural capital can enhance human development and conservation.