Sebastian Royce, Chief Brand and Communications Officer, Rewired Earth and Nicola Steen, Partners and Programme Lead, Rewired Earth
“Supply chain transparency is a strategic asset for any size of business”
“The time to act is now; embedding transparency early on ensures that SMEs are not only prepared to meet the future but are actively shaping it”
In an era where business operations are increasingly under the microscope, small and medium-sized enterprises stand at a crossroads between traditional opaque practices and a transparent, sustainable future. The pressing environmental, social and regulatory challenges of our time are not just hurdles but opportunities for SMEs to pioneer a new standard of operational transparency right from their nascent stages. Acting early avoids the slow, painful and often costly efforts frequently required to retrofit transparency into the deeper-entrenched business practices of many bigger and sometimes more established organisations.
Supply chain transparency is a strategic asset for any size of business. As leaders of SMEs know only too well, the supply chain is the backbone of operations, and in some sectors can be responsible for up to 80% of a company’s environmental impact. Yet many businesses remain in the dark about their supply chains’ true impact. Clouded by the complexities of global trade and with a lack of robust data, trust, transparency, accurate reporting and accountability, this leads to limited ‘best guess’ oversights of the true picture.
The lack of visibility into the precise origins of commodities, the processing methodologies employed and the ensuing environmental and social impacts can hinder businesses significantly – maybe not immediately, but certainly in the future. These blind spots can expose companies to regulatory penalties, consumer backlash and even jeopardise their operational continuity. They also undermine companies who want to take positive action and be leaders in sustainable practice.
The trend toward greater supply chain transparency is set to continue as more stakeholders demand full visibility into how goods are sourced, manufactured and transported.
This will likely involve:
- Stricter regulations: more stringent laws globally, particularly around carbon reporting, human rights and ethical sourcing.
- Full traceability: A growing number of companies will adopt advanced technologies like blockchain to offer full traceability, providing real-time, verifiable data at every stage of the supply chain.
- Ethical leadership: transparency will likely become a core part of what defines a company’s ethical leadership, impacting everything from investor relations to customer loyalty.
Rewired Earth is a next generation, UK-based non-profit company that works in coalition with public and private actors to rewire business and financial services. One of our main areas of focus is on the creation of a digital registry using the United Nations’ Sustainable Development Goals (SDGs), that not only tracks the geographic and transactional footprint of every asset but also provides this data in a digestible, actionable format.
This technology is designed as a pre-competitive tool, essential for all stakeholders in the supply chain ecosystem. It enables businesses to identify and assess risks and opportunities with precision, facilitating targeted interventions. By highlighting areas of concerns – such as potential bottlenecks, environmental impacts or labour issues – companies can proactively address problems before they escalate. Similarly, such a platform will pinpoint opportunities for enhancing efficiency and sustainability, encouraging the adoption of best practices across industries.
These are not just theoretical concepts awaiting future development. They are part of an imminent evolution, already being piloted with select partners. Our hope and aim is that this technology is set to fundamentally reshape how businesses interact with their supply chains, making operations more transparent, resilient, and sustainable.
The registry and associated analytics tools will provide all kinds of businesses with the clarity and oversight they need – empowering them to make data-driven decisions that are typically only feasible for larger corporations. This levels the playing field, allowing smaller companies to optimise their supply chains, reduce costs, and enhance their competitive edge in a market that is increasingly sustainability conscious.
By fostering transparency and resilience, we hope to not only support SMEs in their growth journey but also contribute to the creation of a more inclusive and sustainable economic landscape. The aim for consumers is to reach the point where all products and services can carry a credible kite mark of sustainability.
Separately, to help accelerate sustainable transformation, we have created a digital platform and suite of tools, again utilising the United Nations Sustainable Development Goals (SDGs) as a framework to compare what people want businesses and governments to prioritise vs how they are actually doing, based on the real, assurable data from the registry.
Compliance with evolving regulatory requirements is becoming increasingly complex and critical for businesses across all sectors. New frameworks such as the Corporate Sustainability Reporting Directive (CSRD) and the Task Force on Climate-related Financial Disclosures (TCFD) are enhancing the requirements for transparency in corporate reporting, specifically around sustainability and climate-related financial risks. These frameworks require companies to provide detailed information about how their operations impact the environment and how environmental issues, in turn, impact them financially.
Early adopters of these transparent practices are gaining a competitive edge in several ways. Firstly, by aligning with these regulatory requirements ahead of time, companies are future-proofing their operations. This proactive approach helps mitigate the risk of non-compliance, which can lead to severe penalties, including fines and reputational damage. Moreover, companies that integrate sustainability into their core business strategies are often better prepared for the uncertainties of a changing global climate, which can affect everything from resource availability to supply chain logistics.
Secondly, by prioritising transparency, these companies are also cultivating a reputation as trustworthy and reliable partners. In today’s market, consumers, investors and other stakeholders increasingly demand ethical operations and are more likely to support businesses they perceive as socially responsible. Transparent reporting can therefore enhance a company’s brand value and attract investment from funds that prioritise sustainability in their investment criteria.
Furthermore, companies that lead in transparency and sustainability are also likely to influence industry standards and set a precedent for best practices. This leadership can translate into a stronger negotiating position in the marketplace, and potentially, a role in shaping future regulations.
Transparent supply chains do more than mitigate risks; they transform them into opportunities for value creation. With accurate data, SMEs can turn potential vulnerabilities into points of strength, strategically addressing areas like carbon emissions, water use and waste management. This proactive approach not only aligns with global sustainability targets but also resonates with a consumer base that is more environmentally conscious than ever before.
No business operates in isolation.The challenges of sustainability are universally shared and thus require a collaborative, concerted response. By participating in shared platforms for data exchange and transparency, SMEs can leverage collective insights and foster partnerships that amplify their impact, driving broader industry shifts towards sustainable practices.
The time to act is now; embedding transparency early on ensures that SMEs are not only prepared to meet the future but are actively shaping it.
As part of the global business community, it’s imperative that SMEs take proactive steps today to embrace and integrate comprehensive transparency measures – starting with the end in mind. By doing so, they ensure their growth is sustainable, compliant and aligned with both global standards and consumer expectations, securing their place in the future of global trade.
For more information visit www.rewired.earth