LRQA’s Latest Acquisition Underlines A Significant Shift In The ESG And Sustainability Market

LRQA’s Latest Acquisition Underlines A Significant Shift In The ESG And Sustainability Market

LRQA, a global risk management and assurance firm, has acquired Ergon Associates, a labour standards, human rights and gender equality consultancy. Through this acquisition, LRQA intends to enhance its technical and advisory capabilities for helping clients embed human rights due diligence into their strategies.

Expanding its supply chain due diligence capabilities, LRQA made two significant acquisitions in 2022:

• Sustainable Assurance Solutions (SAS), an Australia based provider of supply-chain sustainability auditing, consulting and training services.
• ELEVATE, a Hong Kong based specialist provider of supply chain services, including in-factory social audits.

LRQA’s consolidated portfolio for supply chain due diligence services exemplifies the slowly but steadily burgeoning focus on the S of ESG, especially within value chains. Organizations globally are facing heightened pressure to gain full visibility into their supply chains and embed human rights due diligence. Some of the notable movements in the international ESG and sustainability regime that are forcing firms to have their long-awaited social awakening are:

• The UK’s House of Lords Select Committee on the Modern Slavery Act 2015. This has called for significant changes to the UK's modern slavery regime, including introducing legislation obliging in-scope businesses to conduct modern slavery due diligence, and considering import bans applicable to certain producers. 
• The US Uyghur Forced Labour Prevention Act (UFLPA), which was expanded on the 2^nd of November 2024, with 78 Chinese textile businesses added to the UFLPA Entity List, blocking their products from entering the country.
• The EU’s Corporate Sustainability Due Diligence Directive (CSDDD) – which sets obligations for large firms within EU to conduct human rights and environmental due diligence in their own operation and across their value chains. The CSDDD is well on its way to becoming binding law, with the EU member states having until June 26, 2026, to transpose it into its national law (keep an eye out for our upcoming report dissecting the CSDDD).
• Australia’s first federal Anti-Slavery Commissioner. Earlier this year, the Albanese government established the first federal Anti-Slavery Commissioner, to deliver on its commitment to lead the fight against modern slavery.

This amplified social regulatory movement is proving to be challenging for firms, as they struggle to incorporate social concerns into their ESG and sustainability strategies as well as into value chain initiatives (see Verdantix Best Practices: Weaving Social Into ESG And Sustainability Strategies). While organizations have made noteworthy progress in terms of environmental disclosures, the same cannot be said of social impact and performance (see Verdantix Strategic Focus: Unpacking The S In ESG Regulations).

As a result of the growing scrutiny on and the complexities associated with creating value chains that uphold human rights and are socially sustainable, firms are relying on consulting providers to help them understand and enhance their social impact, conduct due diligence such that they can effectively identify and address adverse human rights, and benchmark and improve performance. With its latest acquisition, LRQA is, indeed, strategically positioning itself to meet this emerging market need and expand its influence in this rapidly evolving area.