Human rights violations within supply chains are troubling the minds of eight out of ten American and UK CEOs, research from Proxima has revealed.
The 2023 Supply Chain Barometer from the Bain-owned company says 79% of CEOs expressed concerns with the issue in their supply chains.
The most worried were from mid-sized companies, with 76% of CEOs expressing concerns over the ethics in their supply chains.
The Supply Chain Barometer showed that CEOs are expecting to spend even more time on supply chain issues in the coming year.
The research says as geopolitical relations strain and threaten supply chains and organisations are exploring options like nearshoring, friendshoring, and onshoring.
Last year, about 26% of CEOs had considered onshoring and nearshoring some or all of their supply chains. This number has now risen, with 43% of CEOs already undertaking on/nearshoring their parts of the supply chain.
Decarbonisation Efforts Falling Short
Despite concerns about the environment, businesses were struggling to follow through on their commitments to decarbonise.
In the face of inflation’s impact, a quarter of CEOs surveyed last year admitted to postponing their decarbonization plans. While there’s progress this year, with 34% of respondents having a formal business plan for decarbonisation, it’s still insufficient, Proxima says.
“This progress is not moving fast enough, and the reasons behind this sluggishness range from the complexity of the work involved, the cost, and the lack of access to data,” Proxima says.
“The challenge of decarbonizing supply chains is vast, and if businesses want to keep up with their commitments, it’s essential they learn from one another to accelerate action. Our recent Scope 3 Maturity Benchmark revealed the same symptoms: investment, talent, and credible strategies and planning are all lagging behind organizational commitments.”
The biggest challenge cited for holding back decarbonisation raised by nearly three in ten (28%) CEOs is the complexity of the work involved, while for a quarter (25%), the costs are prohibitive. The research also found that only a third (33%) of CEOs interviewed have linked executive remuneration to sustainability targets.
Business Leaders Prepare for Drastic Changes
This year’s Barometer indicates that business leaders are contemplating more significant changes in response to challenges like inflation and geopolitical disruptions, including job cuts and nearshoring, compared to the previous year. Despite inflation remaining a persistent challenge, the landscape of difficulties has become more diverse and complex, says Proxima.
The research indicates 64% of CEOs expect to spend between five and 20% of their time on supply chain-related issues and only 13% plan to spend less time on supply chain topics than last year.
About 2000 CEO’s were interviewed for Proxima’s 2023 Supply Chain Barometer report from companies based in the United States and the United Kingdom.
