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Knowledge is Power: The Pandemic, Reputational Risk, and What We’re Missing

December 2nd, 2021
Hannah Tichansky
Knowledge is Power: The Pandemic, Reputational Risk, and What We’re Missing

An Interview with John Bree, Chief Evangelist & Chief Risk Officer at Supply Wisdom

John is Chief Evangelist & Chief Risk Officer with Supply Wisdom, the leading patented continuous risk intelligence and monitoring solution for third parties and locations. Risk & Resilience Magazine sat down with John for our ESG issue to discuss ESG, sustainability priorities, and empowerment.   

How have you seen the priority of ESG initiatives rise over time?

Companies have looked at ESG in sort of a narrow focus. They talked about their carbon footprint, their own electrical usage- those kinds of things. Now, we’re realizing this needs to be part of the overall supply chain risk companies track for products and services.

When you look at ESG now, it is not only your enterprise that exposes you to reputation risks, it’s your entire supply chain. What’s happened now is that there’s an increased consumer awareness that is requiring companies to have visibility into all the links in their chain to make sure that everyone in that chain is compliant.

It seems like there’s a lot to consider. What are some successes you’ve seen?

Well, what we’re seeing with our clients who use our system to enhance or increase their focus on ESG is creating internal policies and programs. The challenge is the ESG standards and recommendations are constantly being updated and expanded. Supply Wisdom’s solution enables companies to measure their ESG efforts against leading standards and recommendations. At the same time, ESG is moving up the awareness chain in many companies. So, documentation of internal ESG efforts and progress will increase in importance for presentation to senior leadership and boards. 

John Bree Supply Wisdom quote

How has the pandemic affected how we view sustainability priorities?

What the pandemic did is it showed us that you can have a global issue where everybody is in the same boat. In remote service locations like India, and Manila, and other areas where people worked in a facility if the power went out, they had their own generators and they kept it going. When the pandemic hit and everybody worked from home, the infrastructure in many of these jurisdictions was incapable of meeting the needs. So, this is where resiliency really came into play. And people started saying, we have to rethink our model.

With the pandemic, there was also the realization that you need current risk information. If you think back to the early days when the pandemic first emerged, conditions were changing and evolving so rapidly and companies realized that data collected during point-in-time assessments was stale and counterproductive. 

Current information also applies to location knowledge.  Many companies realized they knew very little about the conditions in the places where services were being provided from. Weather and environmental challenges are very different around the world…. All of a sudden, 18 months ago, it was realized that each location has its own unique challenges with regard to local regulations and infrastructure.

How has ESG affected reputational risk?

In the past, if you were the primary, you looked to your third party and relied on them to pay attention to the 4th party and they pay attention to the 5th party. That’s all gone now- you’re responsible for the entire supply chain. Reputation risk has a big impact on this. For example, look at a company that has a reported use of a conflict mineral in their batteries.  The headlines are not going to be about the Nth party that mines and supplies the mineral, the story will be that this company uses conflict minerals. Social media adds more complexity to this.

What do you think people are missing if they don’t consider ESG a priority?

We can no longer make decisions in an ESG vacuum. We have to understand who our clients really are. If you’re a bank lending to someone who is violating child labor laws or modern slavery or conflict minerals, that increases your reputation risks that could negatively impact your bottom line. If a company is polluting, you’ll be asked, “Why did you lend them money? Can’t you see their carbon footprint is atrocious?” The regulatory impact of this is going to be that companies that weren’t concerned about ESG practices will need to get up to speed. Otherwise, they won’t get financing. 

What advice would you give to empower early ESG adopters?

I think people have to realize the value of intelligence. I don’t mean intelligence on how smart you are. I mean risk intelligence. Knowing in real-time what’s going on in your vendor population, supply chain and having up-to-date information about your third parties and the locations where providing service lets you determine where there are weaknesses, gaps, who’s doing well, who’s not doing well. So, I think having good, solid, curated risk intelligence is a critical step. Knowledge really is power.

To read more about ESG priorities and what experts like John Bree are saying, subscribe to Risk & Resilience Magazine and read our ESG issue!

Expert Interview: John Bree on the Top Five TPRM Program Mistakes Firms Often Make

About John Bree:

John Bree is recognized as a global financial industry executive and risk subject matter expert in developing and managing vendor/third-party risk management, AML/CTF, KYC, and anti-fraud programs. 

John is Chief Evangelist & Chief Risk Officer with Supply Wisdom, the leading patented continuous risk intelligence and monitoring solution for third parties and locations.  Before joining Supply Wisdom, John held senior positions globally for Citi and Deutsche Bank covering corporate, investment, commercial, and consumer banking both internal and vendor operations.  

John is a member of the Shared Assessments US and UK Steering Committees and Co-Chair of the Financial Industry Vertical Strategy Group. 

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