New Survey Reveals CEOs' Growing Focus on Supply Chain Issues and Human Rights Concerns
CEOs of UK and US-based companies are expected to dedicate even more time to supply chain matters in the coming year, according to the recently released Supply Chain Barometer by Proxima. Based on a survey of 2,000 business leaders, the study sheds light on the key issues and concerns faced by CEOs when it comes to global supply chain challenges in the year ahead. Notably, human rights issues within supply chains have emerged as a top concern for business leaders.
Key Findings from the Supply Chain Barometer
- Human Rights Issues Take Center Stage: CEOs are growing increasingly concerned about potential human rights violations within their supply chains. The survey indicates that 69% of respondents expressed worries over this matter. Particularly, the retail sector is at the forefront of this concern, with 79% of CEOs in the industry stating that human rights issues are a key focus.
- Layoffs and Nearshoring Gain Traction: Inflationary pressures have forced companies to consider cost-cutting measures, leading to an uptick in layoffs. Approximately 36% of CEOs across various industries are contemplating layoffs to mitigate the impacts of inflation, representing a notable increase compared to last year's responses. Moreover, geopolitical tensions have sparked interest in near-shoring, on-shoring, and friend-shoring as alternative strategies to stabilize supply chains. Over 43% of CEOs with resilience challenges are either considering or have already implemented on-shoring and near-shoring options.
- Slow Progress in Decarbonization: While CEOs are making efforts to decarbonize their operations, the pace of progress is slower than desired. Last year, a quarter of CEOs stated that they had to delay their decarbonization plans due to inflation's impact. This year, 34% have a formal business plan in place for decarbonization, but businesses face hurdles such as complexity, cost, and limited access to data.
Implications for TPRM Professionals
As CEOs prioritize supply chain issues and human rights concerns, third-party risk management (TPRM) professionals must remain vigilant and proactive to address these evolving challenges effectively. Some key implications for TPRM professionals include:
- Enhanced Due Diligence: TPRM teams should conduct thorough due diligence on suppliers and partners to identify any potential human rights issues within supply chains.
- Resilience Planning: Given the increasing interest in near-shoring and on-shoring, TPRM professionals must reassess supply chain resilience plans and evaluate the risks associated with potential shifts in sourcing.
- Decarbonization Strategies: TPRM professionals should work closely with sustainability and environmental teams to support organizations in achieving their decarbonization goals and overcome barriers hindering progress.
- Continuous Monitoring: Regular monitoring of supply chains, suppliers, and geopolitical developments will be crucial to adapt to changing circumstances effectively.
As supply chains face persistent disruptions and challenges, CEOs are becoming more cognizant of the need to address human rights issues and implement resilient strategies. TPRM professionals play a vital role in helping organizations navigate these complexities and safeguard against potential risks in the ever-changing supply chain landscape.