Risk Management for Sustainability Related Risks in Supply Chain

Abstract

Following up on the current growth of business strategy in today’s economic environment, sustainable business tends to develop positively, in other words, it is a combination of economic, environmental, and social purposes in a company’s planning, goals, and practical activities. The core goal is to deliver sustainable value despite the world facing unexpected events such as geopolitical conflicts, the COVID-19 pandemic, natural disaster, and climate change. The great amount of risk identification in today’s supply chain challenges companies and, from that company able to design environmental and social standards into company’s strategy, management, and operations at all levels, an organization could successfully achieve its business goals like enhancing reputation, gaining customer loyalty, and mitigating risks in the face of global disruptions. Additionally, companies ensure how sustainability risks can be managed in supply chains in order to improve current solutions as well as forecast future risks for long-term. The thesis deeply discusses identifying and categorizing risks in supply chains in a specific company case which is KONE has been chosen as a high standard company present of the most sustainable Finnish company in 2023. SSCM presents in detail risky factors that cause negative results in the environment and sociality. In addition, the next objective was to study a comprehensive view of the diverse challenges that a case of KONE organization had to face when conducting sustainable practices throughout its supply chains. The report demonstrates effective strategies, methods, and solutions adopted to enhance its management of sustainability risks and ensure a resilient and ethical supply chain that aligns with global environmental and social standards, is the final aim of this study. Qualitative methodology was used to conduct detailed examinations of written information derived from an extensive documentary report. A real case study from a local company was chosen, leveraging qualitative methods for in-depth analysis. The approach facilitates the exploration of risk management strategies, challenges, and specific approaches to sustainability management implemented by the research firm. The main result of the thesis work illustrates the vital role of sustainability risk management in supply chains in order to gain a competitive edge in today’s business environment. In addition, the work provides specialized insights on aligning supply chain operations with sustainability goals, guiding businesses to continuously evolve in a sustainable, responsible, ethical way whatever the circumstances.