Scotland is well placed to lead the way on supply chain ESG - Malcolm Donald

It is clear from our research that many companies still have some way to go on this aspect of their ESG journey. Progress varies significantly from one business and sector to another; some are sprinting ahead, while others are still finding their feet. Leading the way however is Scotland.

Highlighting Scotland as the UK nation that is most prepared, our report goes on to explain that it is factors such as the size of the energy sector that is driving this upward trend. Indeed, Scotland’s traditional oil and gas sector has demonstrated a commitment to environmental protection, energy transition and Net Zero strategies. Other large sectors such as financial services are also influenced by the shifting priorities of investors towards ESG and the reputationally advantageous position of putting ESG at the heart of business policies.

Through the conversations we’ve had with clients based in Scotland, we’ve noticed that much of the ESG focus has always been on the environment, but there’s certainly much more focus on social and governance now and we think that has been driven by internal stakeholders. The other thing that clients are recognising is that it is no longer just about what they do themselves; it is also about making sure that their supply chain is doing the same thing in a demonstrable way.

However, the findings show that organisations in Scotland still have work to do to be certain that they will achieve compliance with ESG legislation and regulations. In fact, our data highlights that businesses in Scotland would benefit from improving their procedures for assessing ESG compliance. Indeed, only a third of those surveyed say their organisation has detailed procedures in place to assess the ESG compliance of prospective supply chain companies.

Efforts could also be made to improve organisations’ understanding of the legislative and regulatory ESG risks their supply chain may give rise to, as currently just 31 per cent of respondents in Scotland say their organisation has a full grasp of these. Companies could also boost their chances of achieving ESG compliance by setting up a dedicated team that deals with ESG-related matters, including in respect of their supply chains, with fewer than two in five respondents in Scotland confirming this currently takes place in their organisation.

Leveraging our market-leading ESG expertise, at Burges Salmon we have developed a number of practical tools to consolidate all ESG guidance, legislation and other useful resources into interactive and intuitive platforms. Amongst those is our ESG Corporate Disclosure Tool, where clients can seamlessly navigate between the law, ESG disclosure obligations, best practice and training guidance, to help them identify potential risks and unlock opportunities so they can derive real value from it.

Malcolm Donald, partner at UK law firm Burges Salmon