Strategic Focus: Hidden ESG Risks In TPRM And Their Impact On Operational Resilience
14 Jan, 2025
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Executive Summary
Addressing ESG vulnerabilities in third-party networks is a strategic imperative for organizational resilience and competitiveness in today’s sustainability-focused business environment. Traditional third-party risk management (TPRM) frameworks often fail to account for ESG risks, leaving firms exposed to regulatory fines, reputational damage, operational disruptions and an erosion of stakeholder trust. As regulatory expectations and stakeholder scrutiny intensify, integrating ESG principles into TPRM has become essential for enhancing supply chain resilience, safeguarding brand equity and aligning with long-term sustainability goals. This report provides executives with a comprehensive guide to embedding ESG risk management into TPRM, emphasizing the criticality of this shift and exploring actionable solutions – such as advanced technologies and best practices – to navigate challenges and drive sustainable growth.
ESG vulnerabilities in third-party networks are a resilience imperative
Resilience loopholes widen without ESG-integrated management of third parties
Managing ESG risks within third-party risk management (TPRM) requires a tactical framework
Digital technologies enhance the incorporation of ESG risk management into TPRM
Resilience loopholes widen without ESG-integrated management of third parties
Managing ESG risks within third-party risk management (TPRM) requires a tactical framework
Digital technologies enhance the incorporation of ESG risk management into TPRM
Figure 1. Managing ESG risks is increasingly important to firms’ success
Figure 2. The third-party network of an organization is critical to service delivery
Figure 2. The third-party network of an organization is critical to service delivery
About the Authors
Elizabeth Babalola
Industry Analyst
Elizabeth is an Industry Analyst in the Verdantix Risk Management practice. Her current research agenda focuses on enterprise risk management, risk management information syst…
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Katelyn Johnson
Senior Manager, Risk Management
Katelyn is the Senior Manager in the Verdantix Risk Management practice. Her current research agenda focuses on climate risk and its integration into risk management framework…
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