Sustainability in the value chain

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Sustainability in the value chain

A company’s value chain consists of inflows and outflows related to partnerships, raw materials, commodities and services. It is estimated that 60–80% of the sustainability impacts of companies come from the value chain*.  

We offer the following value chain services:    

  • value chain analysis and modelling 
  • identifying and assessing key impacts, risks and opportunities related to social and environmental factors with a focus on the most critical suppliers and materials, and identifying the key sustainability challenges derived from them 
  • definition of sustainability targets related to the value chain 
  • current state/targeted state on the basis of the measures required by a gap analysis 
  • building processes for continuous supply chain assessment, impact mitigation and auditing 
  • the necessary policies and codes of conduct. 

We identify significant impacts and risks related to the value chain through country-, product- and raw material-specific scoring and by preparing an extensive report on the operations of the client. The output is a detailed description of supply chains, from the origin of key raw materials to the sustainability classification of suppliers. By looking at the entire value chain, a company can optimise both its own sustainability and its activities. Risk raw materials and sourcing in countries with high risk ratings can present financial challenges and unexpected cost items for the company. 

*Source: Carbon emissions embodied in product value chains and the role of Life Cycle Assessment in curbing them | Scientific Reports).

Supply chain sustainability and risk management are key aspects of supply chain management for companies and organisations. Sustainability in the supply chain means taking environmental, social and economic aspects into account in the procurement process. Supply chain sustainability ensures that the procurement of products and services is carried out in a sustainable and efficient manner. This is also key with regard to the overall assessment of the company's nature impacts and greenhouse gas emissions (Scope 3), while minimising various risks.  

We support your company in taking the following factors into account with regard to the sustainability of the supply chain:   

  • energy efficiency and low carbon  
  • recyclable and ecological materials  
  • sustainable use of water and natural resources  
  • respecting workers' rights (e.g. remuneration, working conditions)  
  • realisation of human rights in the supply chain  
  • compliance with fair trade and ethical standards  
  • transparency and ethics in the supply chain  
  • anti-corruption and anti-bribery  
  • long-term financial stability.

Our risk management services support the identification, analysis and minimisation of potential disruptions and uncertainties.   

We help your company to assess the most important types of risk and plan and implement effective management models:  

  • Operational risks: disruptions in the supplier’s ability to deliver, production interruptions  
    • multi-supplier model, contingency plans, real-time monitoring  
  • Financial risks: price fluctuations, exchange rate fluctuations, financial bankruptcies  
    • long-term contracts, currency hedging, monitoring of suppliers’ financial position  
  • Geopolitical risks: trade wars, tariff changes, political instability  
    • regional diversification, local procurement options  
  • Environment and weather risks: natural disasters, impacts of climate change  
    • taking climate scenarios into account, ensuring local resources  
  • Ethical and social risks: child labour, poor working conditions, corruption  
    • audits, sustainability certificates (e.g. FSC, Fairtrade), cooperation with reliable suppliers  

The sustainability and risk management of the supply chain are essential for the competitiveness and responsibility of companies. Companies need to adopt proactive operating models, work closely with suppliers and leverage digital tools such as AI and data analytics to optimise the supply chain. Read more about organisations’ risk management.  

The Supplier Code of Conduct is a guideline that defines the requirements and expectations of the company’s suppliers in relation to ethical, social and environmental practices. It is part of a sustainable sourcing policy and ensures that suppliers adhere to the company’s values and standards throughout the supply chain.

We help your company to draw up a Code of Conduct that is aligned with your business model and value chain:

  • definition of objectives and target group
  • definition of values and ethical principles, taking into account the company’s material sustainability topics as well as product safety and quality management  
  • identifying and preventing risks (e.g. corruption, environmental risks, health and safety)  
  • creating clear and easy-to-understand content  
  • integrating the Code of Conduct into the company and partner cooperation
  • audit process plan and implementation

A well-drafted Code of Conduct supports the organisation’s ethical operations and strengthens its reputation as a sustainable operator. Policies prepared for the supply chain reduce risks, promote sustainable business, improve supply chain transparency and ensure compliance with international regulations and standards. Clear principles, effective communication and regular follow-up also ensure that policies do not remain a paper exercise, but also serve as a guideline and a foundation for development for partners. 

Companies may require signatures and audits from suppliers to ensure that the Supplier Code of Conduct is being followed in practice.

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Vesa Vuorinen

Partner, Head of Consulting
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