Lead the way: LRQA launches ESG top trends report for 2023
Each year, LRQA reflects on the top trends that have most impacted the Environmental, Social, and Governance (ESG) landscape for global businesses and their supply chains, as well as how such trends are anticipated to shape responsible sourcing programmes in the year ahead.
In 2023, while many familiar trends continued – climate impact, legislation, technology advancements – there was a new angle to these patterns that transformed the way we perceive ESG risks.
The ‘Lead the way’ top trends report highlights, for example, how climate strategies and human rights impacts now go hand in hand, and businesses must perform due diligence on their climate action to ensure they are conducting what’s being coined a ‘just transition’.
The report also outlines scopes of new and existing due diligence laws. Consequences for violations of new regulations are becoming more tangible, demonstrated through legislation like the United States’ Uyghur Forced Labour Prevention Act (UFLPA), the EU’s Corporate Sustainability Due Diligence Directive (CSDDD), and Germany’s Supply Chain Due Diligence Act. Proposals of similar laws are emerging worldwide, compelling businesses to enhance their due diligence strategy and prioritise a more proactive risk management approach.
2023 also brought increased scrutiny on domestic suppliers within the US and allegations of labour malpractices, such as forced labour and child labour, challenging our previous assumptions on high-risk areas.
The report highlights the importance of incorporating worker voice and grievance mechanisms into supply chain strategies, and the need for enhanced traceability and supply chain risk mapping tailored to the needs of individual supply chain risks. All this to provide a fundamental learning from the year: proper due diligence extends far beyond an individual organisation and their direct operations. Every facet of the value chain must be considered in the risk assessment process.
Read more about our top seven trends from the year and more importantly, how to adjust your programme to stay proactive against risks in the year ahead. Download the full report here.