Review the environmental, social and economic impacts at each stage of your value chain to identify the risks and opportunities.
Once a scope and the map of your value chain have been defined, Step 2 is to assess your environmental, social and economic impacts on your business and to identify the risks and opportunities.
This step will give you the information you need to determine your priorities for action (Step 3).
The level of detail will depend on your company's size and complexity, interests, drivers and resources.
Our Wellington Zoo case study provides a really good example of what this stage might look like.
Examine environmental, social and economic factors
Examine the key factors impacting your area of focus. Consider both inputs (such as raw material sourcing e.g. do these contain conflict minerals or questionable labour practices) and outputs (such as solid or liquid waste for services, the transfer of knowledge post-service delivery). You can record these on the Risk and Opportunity template.
Identify external drivers of risks and opportunities
Identify any external drivers for risks and opportunities (e.g. supply/demand, cost, stakeholder requirements, supplier performance, current or future regulations, competitors' activities etc).
Look at your suppliers' supply chain
Ask your suppliers for information on their supply chain and how they manage their own risks and opportunities.
What are your business risks?
Use scenario planning to assess current or possible future risks to your business continuity, integrity, market presence, or reputation at any stage of your value chain.
What risks do your raw materials carry?
Are you sourcing any raw materials that are in short supply or are the subject of stakeholder concerns (such as palm oil)?
What are your relationships like with suppliers?
Who are your key suppliers and what relationships do you have with them? Are there alternative suppliers you could use?
How do your suppliers interact with their suppliers?
- Do they have good working relationships?
- Have they considered security of supply issues with their suppliers?
- Have they set social and environmental standards for their own supply chains?
Could you do things differently?
Could you do things more efficiently, with a lower environmental or social footprint?
Are there opportunities to collaborate?
Can you work with others to solve an issue or realise a mutually beneficial opportunity? For example, competitors Sanford Ltd, Aotearoa Fisheries Ltd and Sealord collaborated along with the New Zealand Government and scientists to develop Precision Seafood Harvesting.