ESG Risk Management in the Value Chain

The “value chain”* is the set of operations that a company carries out to carry out its business. In fact, the value chain influences and is influenced by numerous social and environmental issues such as the use of natural resources and water, hygiene and safety, working conditions and much more.

By analyzing areas where the connections between corporate productivity and socio-environmental issues are particularly strong, Sapiens supports companies in addressing them with the logic of shared value, allowing them to increase their economic potential and simultaneously resolve social issues.

*Porter ME-Kramer MR, Creating Shared Value, in “Harvard Business Review”

The concept of shared value can be defined as the set of policies and operating practices that strengthen the competitiveness of a company while improving the economic and social conditions of the communities in which it operates […] focusing on identifying and expanding the connections between economic progress and social progress.

Michael Porter, economist

ESG Risk Management in the Value Chain According to Sapiens

IT IS WRITTEN

“It is a practice that involves the identification, assessment and mitigation of risks that can influence corporate performance in relation to environmental, social and governance factors, as well as the ability to intercept opportunities that can arise from system and network synergies”.

IT IS READ

“What strategies should I implement to understand, anticipate and address the ongoing cultural, social and environmental transformation that is both predictable and inevitable, and thus ensure the long-term survival of my company/investment in a context of continuous change?”

SUPPLY CHAIN ASSESSMENT

Most of the environmental and social impact of companies (up to 90%) occurs in activities along the supply chains; these therefore represent a primary channel on which to act for the sustainable transition.

Chains have become increasingly complex due to the globalization of production. In addition, the number of intermediaries and geographical areas has increased and companies are having difficulty gaining visibility beyond their direct suppliers.

To build a sustainable chain, the first step is to map each of its phases: this makes it possible to increase the transparency of the process, from origin to point of sale.

It is then necessary to implement process and procedure frameworks, organize regular verification audits, disseminate codes of conduct and organize specific training, which includes respect for human rights and workers.

Certifications can be a very helpful tool to provide a formal structure to organizations that want to systematize and optimize their internal processes in compliance with international standards.

HUMAN RIGHTS DUE DILIGENCE

The “Guiding Principles on Business and Human Rights” were approved on 16 June 2011 by the United Nations Human Rights Council.

It is a structured process that involves the evaluation of actual and potential impacts in the implementation of corporate policies aimed at both its own production chain and its controlled and associated companies.

It is a real risk management tool, aimed at identifying and mitigating risks and impacts on human rights and the environment.

SUPPLY CHAIN STRATEGY

Once the company has understood how its value chain works, through the necessary assessment processes, it faces a new difficulty: how to make the data it has collected effective in a real “strategy” for managing ESG issues in the chain, both upstream and downstream.

Very often the company feels powerless to change delicate and vital balances for its business.

Sapiens supports companies in defining engagement strategies to become more resilient and effective on the one hand, and on the other to make the transition process towards sustainability a real strategic investment.

Advantages

Guides the development or updating of product and service proposals to customers

Protects against reputational, operational and financial risks arising from non-compliance with rules and regulations

Prevents regulatory compliance risks (e.g. 231 or commission of corruption crimes)

Strengthens the assessment by investors and rating agencies

Foster better relationships and collaborations with business partners

Protects against increased costs due to fines, increased insurance premiums and supply insecurity

It has a positive impact on the perception of the company and the product by the new generations

Intercepts new business opportunities arising from deeper interactions with value chain actors

Why Manage ESG Risks in the Value Chain with Sapiens

Because Sapiens helps answer contingent questions on which to design a strategy for a company that (1) deals with existing problems and (2) is projected towards the future:

  • How will global warming impact my business?
  • How will the growing sensitivity towards sustainability issues among the new generations change their habits as consumers?
  • By when will my company have to become carbon neutral due to regulatory requirements or market demand?
  • What strategies should I follow to counteract the issue of skills aging in the company, considering the current speed of technological evolution and processes?
  • How relevant is my product in a market so closely connected to ongoing geopolitical and environmental changes?
  • How will my company be able to produce value in its supply chain of tomorrow, with respect to, for example, the recruitment and retention of staff, their skills, the reduction of waste produced, the impact of transportation, the use of more current technologies?
  • What strategies should I implement to reward the achievement of sustainability goals?
  • How do I prepare my managers for sustainability challenges?
  • How can I adopt national and international regulations, rules and action plans towards a different business model? How do I create culture, sharing and motivation in the company regarding these issues?


For companies that want to survive in this rapidly changing market, it is essential not to remain inert and to equip themselves today by implementing strategies that guarantee their survival. With resilience strategies, which necessarily involve an analysis of ESG risks.

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Alessandra Zeni

A graduate in Economics and Business Management, soon to graduate in International Business and Finance, I fully share the values of Sapiens. I believe in the urgency of building the foundations for a sustainable future today, and in the importance of spreading culture and awareness, because only through sharing can we generate a positive, lasting and accessible impact for all.

Diana Perales

I have a background in legal studies, with experience in corporate and contract law and an MBA in Sustainability Management. As Project Manager at Sapiens, I coordinate sustainable transition projects and multidisciplinary teams. I believe in creating shared value, thinking about future generations, and that every challenge can become an opportunity for transformation.

Clara Durosini

I am CSRD Specialist in Sapiens, graduated in Agri-food Economics, with experience in business processes, market analysis and strategic consulting.

I believe that coherence between business and values ​​is fundamental, and that sustainability can become a concrete lever for efficiency, innovation and enhancement of the supply chain, if managed with competence.

With Sapiens, I accompany companies towards paths of positive impact, helping to make sustainability recognized as a strategic resource and value creation.

Renato De Marco

I trained in consulting, artificial intelligence and industry, covering managerial roles and developing strategic partnerships. In Sapiens I contribute to business growth with vision and concreteness, convinced that innovation must guide the transition towards more responsible and aware business models, in which ethics and growth can coexist.

Elisa Rivetti

My educational path between digital economy and environmental economics has allowed me to combine sensitivity for ESG issues with a data-oriented analytical approach. At Sapiens I contribute to the construction of tailor-made sustainability paths for companies, transforming numbers into concrete strategies and actions. I believe that sustainability is not just a necessity, but a conscious choice, to be faced with responsibility and vision towards the future.

Mauro Vaia

For more than twenty years I have been a promoter, in the world of companies, organizations and societies, of a responsible approach to business, social development and personal growth. I pay particular attention to accompanying the human side of the company, because I believe that people make the difference. I am convinced that by strengthening the true mission of “doing business”, companies can, by making use of social responsibility and sustainability, generate resilience and long-term success. After having held important positions in the world of advisory consultancy, I founded, with Alessandra, Sapiens Srl SB, of which I am a partner and director. I am also the author of several essays and books including IL VALORE AL DI LA’ DI DIO, pensare uno spazio morale per le sfida del XXI secolo, Ed. Armando, 2020.

Alessandra Bresciani

In 2000, as an entrepreneur, I founded Zato Spa, a company that produces and distributes worldwide systems for the metal recovery and recycling industry, and I was its CEO until recently. I currently hold positions on the boards of directors of Private Equity Funds.

I am, together with Mauro, a founding partner and administrator of Sapiens Srl SB, because I firmly believe in the collective responsibility of identifying new perspectives and opportunities that the sustainability theme offers to those like us who want to pursue them to generate greater value in our entrepreneurial project.

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