Moody’s: businesses lacking visibility

Posted on Wednesday 26 April 2023

Research from Moody’s Analytics has found 69% of businesses say they do not have the necessary visibility over their supply chains to uncover risk in their organisational networks to avoid reputational harm.

BUSINESSES POINTED to a range of factors driving these assessments: a lack of data, difficulty evaluating every organisation in a supplier network, and the responsibility for supply chain visibility being spread across departments. 

Keith Berry from Moody’s Analytics said: “The past couple of years have brought supply chain risk to the fore. Organisations that can account for the environmental impact of their suppliers and demonstrate that they work with fair and ethical organisations can better protect their reputations and are more appealing to consumers. It’s clear that visibility of supply chain risks can provide huge competitive advantages.”

Identifying risks associated with suppliers buried in the supply chain is crucial to corporate responsibility and to protecting reputations, especially for consumer-facing businesses and regulated organisations which are particularly sensitive to reputational risk. Yet gaining visibility into operations and suppliers in lower tiers of the supply chain is a challenge, with their data unavailable or firms not required to release information.

New regulation such as the German Supply Chain Due Diligence Act and the EU’s upcoming Corporate Sustainability Reporting Directive has further amplified the strategic importance of supply chain visibility.

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