Study finds link between corporate sustainability and resilience to pandemic disruption

Companies that focus on corporate sustainability are in a better position to weather the Covid-19 pandemic, according to a study focused on the supply chain performance of 35,000 companies in five regions around the world, released by sustainability ratings firm EcoVadis this month.

That’s because companies with corporate sustainability management systems in place focus on enhanced supplier relationships, transparency, safe work spaces, and employee well-being, the researchers claim. When it comes to pandemic preparedness, those that take action in three key areas are best prepared: employee health and safety, working conditions, and supply chain due diligence.

But overall preparedness levels in sustainability management are “concerningly low,” the researchers found, and much work remains to be done to improve supply chain resilience. The study found that more than a quarter of suppliers have no health crisis measures in place; 80% of companies lack supplier due diligence measures, a key factor in preparing for risks and disruptions to multi-tier supply chains; and that 44% of suppliers lack measures toward employee health and safety, the indicator most closely related to employees’ physical well-being during the pandemic, according to the report. 

Strategies that focus on improving sustainability efforts will translate into more resilient supply chains, the researchers said.

“We believe insights into sustainability management in supply chains can be effectively leveraged to understand health crisis preparedness across the entire value chain,” the researchers said. “Used to identify at-risk parts of the supply chain, these insights can guide health crisis preparedness and resilience strategies that will enable companies to transition into a new normal and prepare for subsequent waves of Covid-19 that may pose an imminent threat to the fragile and recovering supply networks.”

Looking at preparedness across specific industries, the study found that: 

• The least prepared for a health crisis is the wholesale, services & professionals industry, where 42% of suppliers lack any preparedness measures. 

• Significant shortcomings are apparent in transport industries, where 39% of suppliers have no preparedness measures. 

• Heavy and advanced manufacturing industries and the construction industry are in the best position: less than 30% of suppliers go entirely unprepared, the researchers said.

Go to the EcoVadis website for more information on the report.

For more coverage of the coronavirus crisis and how it's affecting the supply chain, check out our Covid-19 landing page.