01 ESG Times: Due Diligence and Risk Readiness

Strengthening Supply Chain Accountability. Why This Topic, and Why Now:

Following last quarter’s focus on Modern Slavery, this quarter we are broadening the lens to ESG Due Diligence and Risk Readiness. Between January and March, organisations are typically finalising annual reporting, refreshing risk assessments, and preparing for audits, disclosures, and regulatory submissions. This makes it a critical period to strengthen ESG controls, data quality, and governance across the supply chain.

This topic builds directly on human rights expectations while expanding into environmental, social, and governance risk management, thus ensuring our supply chain partners are prepared for increasing regulatory and customer scrutiny throughout 2026.

What ESG Due Diligence Means in Practice

ESG due diligence is the systematic process of identifying, preventing, mitigating, and accounting for ESG risks and impacts in operations and supply chains. Key elements include:

• Risk identification across environmental, labour, ethics, and compliance topics
• Policies and controls aligned to those risks
• Monitoring, documentation, and corrective actions
• Clear accountability and escalation processes

For many of our supply chain partners, you may consider this is no longer optional, it is a core expectation tied to continued business relationships?

Environment & Social Risk Refresh

Focus Areas:

• Human Rights Continuity – extending modern slavery risk assessments to sub-tier suppliers;
• Environmental Risk: energy use, emissions hotspots, water stress and waste management;
• Health & Safety – incident/accident trends, root causation, and preventative controls.

Your Actions:

• Review and update your ESG risk assessment for your operations and key suppliers;
• Confirm that identified risks have documented mitigation actions; and
• Escalate any high or emerging risks that could affect continuity of supply or compliance.

Governance & Data Readiness – 2026

Why Governance Matters

Strong governance underpins credible ESG performance. As ESG disclosures become more regulated and assured, data integrity and oversight are essential.

Expectations for Suppliers

• Assign a clear owner for ESG and compliance topics
• Ensure ESG-related data is accurate, traceable, and supported by records
• Maintain up-to-date policies covering ethics, labour standards, environmental whistleblowing

Your Actions:

Suppliers may be asked to validate ESG data submitted in prior periods and confirm internal review and approval processes.

Across 2026, we expect a proactive preparation to reduce the risk of disruption later in the year

• Greater focus on supply chain due diligence and risk mapping;
• Increased requests for ESG evidence, not just policy statements; and
• ESG performance playing a stronger role in sourcing and contract decisions.

How We Will Support You

We are committed to working collaboratively with our suppliers to build capability and consistency. Our support includes:

• Clear expectations and guidance;
• Standardised risk assessment and templates; and
• Targeted engagement with higher-risk suppliers.

In return, we ask for transparency, timely engagement, and leadership commitment to ESG integration.

Your Success Stories

One of our supply chain partners, CTJ, has invested in an on-site wind turbine, which is empowering their business to reduce long-term energy costs, secure a sense of energy independence against market volatility and aid their move to Net Zero, turning this local power into a competitive, sustainable advantage.

Subsequently, their manufacturing of product, the doors and windows which we procure, in utilising this renewable energy CTJ are reducing embodied carbon in these products, which impacts our overall carbon, but reduces emissions, energy bills, whilst enhancing their own brand reputation.
Good work CTJ.

Closing Message

Addressing risk is a critical foundation. Building on that foundation through robust ESG due diligence and risk readiness will position you, our supply chain partner, for resilience, compliance, and long-term value creation in 2026.
We appreciate your continued partnership and look forward to working together over the coming quarter.