ESG Outlook is Sourcing Journal’s discussion series with industry executives to get their take on their company’s latest environmental, social and governance initiatives and their own personal efforts toward sustainability. Here, Jon Hancock, CEO of sustainability services provider Sedex, discusses how the company is making global supply chains more environmentally and socially sustainable, through the power of data-led tools, accessible services and actionable insights.
Name: Jon Hancock
What is your company’s biggest ESG contribution to responsible sourcing?
Our biggest contribution to ESG and responsible sourcing is the data and tools we provide to our network and community of over 66,000 businesses to gather, store and analyze supply chain data. In fact, one in 10 Fortune 500 companies are members of Sedex and our world-renowned SMETA audit is used in more than 170 countries every year to assess working conditions and practices at work sites.
Our assessment tools and data platform enable businesses to map their supply chains more efficiently, share information about their operations and work sites with customers, identify actions to drive ESG performance and report on ESG areas.
Within ESG, each area—environmental, social, governance—has so many subsets. How do you help companies prioritize?
Understanding and meeting ESG requirements can be incredibly complex. A key element of ESG frameworks is an approach known as “risk-based prioritization.” This means that companies focus their attention and resources where ESG risks are highest, most widespread, most severe or a combination of both. Our integrated platform includes a sophisticated risk assessment tool to facilitate this by providing relative risk scores across regions, industries, suppliers and even individual work sites where data is available.
What is your personal philosophy on shopping and caring for your clothes?
Personally, it can feel overwhelming to make meaningfully sustainable choices—but small, daily changes are still important and powerful. We take a conscious approach to reducing energy use at home, for example, maximizing house insulation and using an electric car.
I encourage my family to have a “reuse, repair” mindset for clothing. In fact, my children grew up in hand-me-downs, and regularly tease me about how “ancient” some of my clothes are.
What are some trends in the fashion industry that make responsible sourcing more challenging?
There are risks to sustainability across the fashion industry, including in many fast-fashion business models. The pressure to offer consumers new styles first and at such low prices can lead to buyers making rapid decisions on new suppliers or lines without taking the time to fully understand sustainability implications, such as higher risks of environmental pollution associated with a particular material or production process. This coupled with a lack of supply chain visibility due to supply chains being long, complex and opaque (a factor for many sectors), can make sourcing responsibly incredibly challenging.
How does your company better help your clients understand ESG and shifting regulations?
There’s been significant growth in legislation over the past five to 10 years in many countries, and this is one of the main drivers for businesses needing support with ESG. Sedex’s approach is to ensure our tools and services can support organizations of all sizes—in all sectors—to address their sustainability challenges and make more informed business decisions. Our product development is informed by the evolution of laws, regulations and trends in ESG around the world, so that our tools are effective in supporting businesses to meet various ESG and sustainability requirements.
Additionally, we have a fantastic consulting team who can assist any company—even those that aren’t Sedex members—with understanding the ESG, sustainability and supply chain regulations relevant to them. We also provide educational resources through our website, free-to-access webinars, community events and peer-to-peer learning on the latest laws and regulations.
Do commitment and priorities shift during tough economic times? Is there one area of ESG that companies are focusing on more now than before?
Businesses are certainly feeling the pressure on margins and costs now—it will be interesting to see how much sustainability spending grows in 2023. The recent challenges and supply chain disruption caused by the pandemic and political turbulence have shown that, while priorities do shift during tough times, good performance on ESG and sustainability remains a key factor in companies successfully navigating them. Sedex’s membership continues to grow—by 12 percent from 2020 to 2021—reflecting this continued increase in a global business focus on sustainability, alongside the investment in data-led technology to support this.
What company do you admire for their ESG initiatives?
I’m impressed by how quickly some big, international companies have utilized the supply chain data they already hold to help them meet ESG requirements and how they use those requirements to drive supplier focus on sustainable practices.
Molson Coors, for example, has expanded its data requests to suppliers to help build a more robust, comparable picture of ESG risk management across its supply chain to prioritize the most needed areas for improvement.
Your company works with many sectors. What can other industries teach apparel, textiles and retail?
We see some fantastic initiatives from Sedex members across various sectors. Many grocery stores in the United States and the United Kingdom work hard collaborating to increase supply chain transparency into the lower tiers, including raw material harvesting. The insights they draw on agricultural activities are relevant for businesses in many countries and industries, as one commodity harvested in a particular region forms part of multiple supply chains.
What do you consider to be the apparel industry’s biggest missed opportunity related to securing meaningful change?
There’s an untapped opportunity in the power of data and technology to drive sustainability across apparel supply chains, from raw materials and factory operations to retail stores. Many tech solutions exist to improve water and energy efficiency, harness renewable energy, and manage ESG risks more effectively.