You’d be hard pushed to find an organisation that says it doesn’t take diversity, equality, and inclusion (DEI) seriously. Many corporate websites are adorned with DEI pleasing statements, reassuring readers that their organisation creates a level playing field and opportunities for all. Yet expectation and reality don’t often align. Ask some leaders for specifics around how DEI operates within the business day-to-day, with parental leave and caring responsibilities for example, and they’re stumped. Queries quickly get referred to HR, to provide details around policies and procedures.

But if we want to ensure that organisations are genuinely diverse, including retaining parents in the workplace, leaders need to know some of the finer DEI details. Leaders shouldn’t just palm employees off to another department for more information but be able to confidently talk through parental leave and return options, and support, themselves. It sends a powerful message to employees that their needs are understood, transition into parenthood supported, and the organisation practices what it preaches.

Workforce dropout and engagement rates show that organisations and leaders still need to do much more to address the barriers many parents face in achieving equality in the workplace. The first step is for leaders to challenge themselves with the following questions:

• Do you know what the parental policy is in your company?

Rather than leaving this to HR to answer, its important leaders understand their parental policies and how competitive they are. Excuses such as having never been a parent, or it being a long time since looking after small children, won’t cut it with talented employees. Being able to discuss flexible options with employees lets them know that they are valued and can be supported through the transition to parenthood – rather than being left to fend for themselves.

• What are the take up rates of SPL in your organisation?

The take up of Shared Parental Leave (SPL) is typically low, with research finding that only 2% of eligible couples used it. Despite SPL policies promising to transform gender equality, that has yet to be realised. Leaders need to understand what SPL take-up rates are like within their own organisation and address any subsequent barriers to parents achieving equality in the workplace.

Feedback from parents regarding SPL has generally been that taking a pay cut to £150 per week is “unpalatable if not impossible” for couples to manage – explaining why take-up is so low. This often results in males and non-birthing partners using very limited leave, whilst the other parent takes a hit on their career. For leaders that genuinely want a diverse workforce, the playing field for parents has to be levelled out more. SPL can’t be relied upon stand-alone, so what more can businesses and leaders do to retain talented employees that have become parents?

• Do you know what fathers or non-birthing partners get?

Research by Deloitte and DaddiLife found that one third of fathers changed jobs since becoming a parent – with 39% pinpointing ‘flexibility to fulfil parental responsibilities’ as a reason to leave. Another third said they were ‘actively looking’ for a new role since becoming a father. The research highlighted that generational norms and gender-role stereotypes are on the way out amongst Millennial dads in particular, making it even more important that businesses understand what fathers and non-birthing partners are entitled to and supporting lifestyle choices.

• Do you know if your current client delivery team is properly resourced?

Parents and carers have out-of-work responsibilities that they may have to attend. Is the team properly structured so that client delivery can be maintained? Or is too much pressure heaped on the parent or carer to maintain high levels of service, making their other responsibilities unachievable? Equally, are colleagues without active caring duties able to realistically pick up the slack if necessary? With many employees expected to “work like they’re not a parent, and parent like they don’t work” something has got it give and teams need to be structured to support diverse lifestyles.

• Do you know all your teammates personally and what their hopes and dreams are?

Many leaders assume this knowledge and are then surprised to learn about what teammates real aspirations are. Leaders must ask these questions directly and align opportunities accordingly. Career paths can follow many trajectories, but many leaders fall into the trap of assuming teammates want careers that mirror their own. Asking employees what their goals are can create a more engaged and productive team, unlocking potential further.

Leaders need to ask themselves a few home truths when it comes to their understanding and supporting of parents in the business. Providing genuinely flexible options, enabling employees to maintain career control, and assigning value to contribution over time spent in an office, are all crucial areas businesses need to address if they are to retain exceptional talent.

Expectations around parenthood continue to evolve, with more voting with their feet when company procedures and leadership attitudes don’t align with carefully crafted DEI literature. Leaders can no longer delegate knowledge of parental policies to another department, they have to understand it better themselves. With a significant proportion of employees becoming parents during their careers, leaders need to ensure they support the transition as best as possible and maintain a diverse workforce.

When thinking about Environment, Social and Governance (ESG) practices, the ‘S’ is often overlooked. This is potentially because it’s harder to measure social impact, unlike carbon footprint in the ‘E’ for example. But the ‘S’ plays a vital role in the ESG acronym, with investors and consumers alike demanding that organisations are more socially responsible.

More than just a nice to have, organisations that track their social impact and proactively try to address inequality reap the benefits from investors, consumers, and employees. Whilst ignoring it can create a backlash from the same stakeholders. So, what are some of the opportunities when it comes to socially responsible investing, and what are the threats of disregarding it?

• Financially sound investments

According to Bank of America Merrill Lynch, companies with better social impact records had greater three-year returns and were more likely to become “high-quality” stocks. The organisation also found that companies were less likely to experience bankruptcy, or for stocks to substantially drop. This highlights that not only does measuring social impact positively affect communities – but it is good for business too.

Investors of the future share the same sentiment, with research by JPMorgan Private Bank finding that 86% of millennials — a generation set to inherit $30 trillion (£22.7 trn) from their parents over the next 30 years — agree that sustainability is an investment priority. Furthermore, UBS found that women — who hold 32% of global wealth — were set to invest more than $2.3 trillion (£1.74 trn) for social causes in 2021. As future leaders focus investments on business areas that have a positive social impact, organisations need to follow their lead.

• Reputational damage and market drops

Businesses that ignore social impact do so at their own peril, as online fashion retailer Boohoo discovered. More than £1.5bn was wiped off the retailer’s market value in just two days, amid concerns over factory conditions, with workers earning below the minimum wage and operating without proper equipment to guard against Covid-19. Later in the year, the company again was criticised for squalid and dangerous working conditions in Pakistan, with garment workers earning 29p per hour during 24 hour shifts.

Not only is this morally objectionable, but brand reputation is also severely impacted alongside profits too. More than half (53%) of UK consumers said they would never buy from a brand again if it was accused of working with unethical suppliers, doing untold damage to business. And with distrust of the corporate sector continuing to rise, organisations need to work harder to gain consumer confidence and operate more ethically.

• Customers voting with their feet

Consumers are more aware than ever before of the social impact organisations can have and they aren’t afraid to boycott brands entirely. The advent of cancel culture and social media means that brands can no longer hide shady operations and are increasingly being held accountable for their actions.

On the flip side, organisations that are mindful of their social impact and invest responsibly are more likely to be rewarded by customers. Research by Deloitte found that nearly one in three (30%) consumers chose brands that have ethical practices and values, with a similar amount (28%) saying they’d stopped purchasing certain products entirely due to concerns in the same area.

• Proactively managing and vetting supply chains

Organisations need to be more socially responsible in managing and vetting their supply chains. Whilst this conversation has gained traction in the environmental arena, such as clamping down on greenwashing practices, the same has to be applied to the social impact of supply chains.

With 40 million people subject to modern forms of slavery globally, 71% of which are women and girls, more has to be done to tackle inequality. Pleading ignorance to socially unethical practices, or businesses that try to remove themselves from the equation by blaming third parties, won’t wash with increasingly savvy investors and customers. Businesses need to be more responsible for the full life-cycle of what they sell and manage the entire value chain.

• Talent attraction and retention

Organisations that don’t take social responsibility seriously aren’t just risking investment opportunities and engagement of customers, but also their ability to attract and retain talent. Employees are looking for companies that support their values, with 64% of millennials saying that they wouldn’t take a job at a business that wasn’t socially responsible.

Organisations need to ensure they have robust measurements in place, reporting on how they are taking social accountability for their business’ actions. By ensuring policies and practices are aligned with international standards, it sends a strong message to employees, investors, and customers alike that the organisation is mindful of their social impact and is working hard to address any inequality.

Ignoring the ‘S’ can have a devastating impact on both the bottom line and society, creating a ripple effecting on everything from investment opportunities to brand loyalty. It’s important that organisations operate responsibly and leave a positive legacy. Not only does it contribute to improved social outcomes, but it also provides compelling growth opportunities.

Global M&A activity has been described by KPMG as “turbocharged”, with deals expected to reach a record breaking $6 trillion (£4.47 trn) by the end of 2021. Yet in the race to acquire the best businesses, with competition particularly rife over technology and sustainability firms, leaders often overlook the importance of culture and integration before signing on the dotted line.

As Peter Drucker once famously said, “culture eats strategy for breakfast”; meaning that whilst strategy is undoubtedly important, an empowering culture creates more successful organisations. Yet despite 95% of executives agreeing that cultural fit is critical to the success of merging, only 25% cite a lack of cultural cohesion and alignment as the primary reason integration efforts fail.

And with 70-90% of business cases failing, how can organisations better their chances of a successful M&A? By considering culture and integration in the following ways, both prior and post M&A activity, can make a significant difference to the outcome of a merger.

• Conduct a cultural assessment prior to acquisition

This stage may be too late for some organisations, but a lesson for the future all the same. As part of the due diligence process, businesses should seek to understand the culture of the organisation prior to purchase. This will help the buying organisation to understand whether there is cultural alignment, enabling them to assess potential time and financial implications of supporting integration practices if not.

PwC provides an example of an organisation that didn’t take culture and integration into consideration before acquisition, and therefore was unaware that decisions by senior leaders in the joining company were typically made autonomously. So, when the acquired chief IT officer announced a new organisational structure without any prior stakeholder engagement, integration came to a halt as questions flooded in from both sides of the business. Had a cultural assessment been conducted beforehand, leaders may have been able to circumvent this issue – creating a unified approach upon merge.

• (Re)communicate culture and values to aid integration

Merged organisations don’t have to establish a brand-new culture, but they need to communicate values and behaviours to help employees integrate more effectively – through understanding where they sit in the wider corporate ecosystem. Some organisations have flat structures and relaxed ways of conducting business, for example, whilst others are hierarchical and formal. Not all talent will align with the values and behaviours communicated, but failure to convey anything would result in poor integration and a greater fallout – as employees struggle to find their identity in a recently merged business.

When considering that some organisations are acquiring businesses to access specific skills and talent too, it can be devastating to lose employees so quickly. Research by EY finds that 47% of key employees leave after a major transaction, increasing to 75% after just three years. So, whilst having an established culture can seem like a nice to have, it’s actually a business imperative to retaining key talent.

• Utilising tools to understand the talent landscape

Prior to acquiring an organisation, or once a merge has occurred, it is worthwhile utilising assessment tools to understand what drives individual leaders and teams to support integration. The acquiring business may assume that newly merged employees will operate in the same vein as before, but if the company values and roles aren’t aligned to an individual’s natural proclivities – they won’t flourish. For example, a leader that was previously lauded – as their role enabled plentiful mentoring opportunities, that supported their personal values – may struggle in a new organisation where profits are the only marker of success.

Assessments, such as our GC Index, can help merging or merged organisations to understand the impact and contribution individuals and teams currently make to foster more effective integration. The GC Index also helps organisations to identify where there may be gaps in current teams, which could benefit from greater neurodiversity to boost performance. Such assessments can help to ensure that recently formed teams are thoroughly integrated and get off to a flying start, helping employees to understand the value of their contribution and how they can work collectively under new circumstances.

With the M&A market so robust at present, it’s a missed opportunity for businesses not to consider culture and integration as part of its due diligence process. Businesses then stand a better chance of successfully merging, as employees are suitably integrated and understand where they fit. Conducting assessments as to where individuals and teams can make the most impact, can further support engagement and retention of key employees too. In a competitive business market, taking time to consider culture and integration during M&A can provide a critical edge – making new ventures a success from the start.

We conclude our cybercrime series, which has thus far looked at common cyber-attacks and how organisations can better protect themselves, by considering what lies in store. What are some of the threats on the horizon and how can businesses better prepare for the future?

• Be aware of synthetic media

We’ve discussed organisations suffering from cyber-attacks in the form of physical infrastructure, such as extorting data or money, but EY’s Megatrend report points to “synthetic media” as a cyber risk for businesses in the future. Described as “media content that is generated or altered by AI”, it may cause an issue for businesses, as information can be adapted without permission and presented as fact.

This in turn can have a negative impact on brand reputation, consumer trust, revenue, and stakeholder relations. Doctored content may be believed, frustrations around the inability to control the spread of incorrect information could rise, and stock prices driven down – all as a result of synthetic media or weaponised disinformation.

Within the synthetic media umbrella includes “deepfakes”, whereby AI uses deep learning to digitally alter videos – making anyone they want, say anything they like. High profile examples of deepfakes include Mark Zuckerberg boasting how he “owns users” and Obama calling Trump “a total and complete dipshit”. Deepfakes don’t just manipulate images or videos but can replicate voices too. The leader of a UK subsidiary of a German energy firm fell victim to this, being duped into paying nearly £200,000 into a Hungarian bank account, after being phoned by an imposter that replicated the German CEO’s voice.

Whilst deepfakes have yet to be carried out in high profile attacks in the private sector, it’s easy to see where the damage could lie. Altered videos of CEOs “admitting” to wrongdoing, or encouraging unwanted behaviour from customers, could all irreparably damage an organisation. Whilst technology is being developed to better protect organisations, such as digital watermarking and forensics, it’s an area that business need to be aware of in the future.

Planning how to mitigate the threat of synthetic media and educating customers in spotting incorrect information are just some of the tactics currently being deployed. But this will need to be much more sophisticated in the future, as cyber criminals continue to push security boundaries.

• Keep fighting in the war for talent

Cybersecurity experts predict that there will be a cyberattack incident every 11 seconds in 2021. This is four times the rate five years ago (every 40 seconds in 2016). And with financial damages from cybercrime expected to reach $6 trillion (£4.4 trillion) by the end of this year, demand for talent globally continues to be extremely competitive, as businesses seek better protection.

In a cyber security conference with top technology moguls, president Joe Biden said that half a million cybersecurity jobs remain unfilled – representing a significant challenge in keeping organisations and individuals safe from attack. Shortages are felt globally, with countries doing everything they can to attract talent. Currently Washington, Singapore and Germany rank as the top three places to live for cyber security jobs, taking into account salary, job availability and the cost of living.

Research by PwC and CBI finds that 70% of financial services firms plan to increase spend in IT – specifically in cybersecurity – with 87% saying they plan on upskilling staff. If businesses are to stay ahead in the war for cyber talent, upskilling internally and offering competitive packages for external hires will continue to remain crucial to operations.

• Remain compliant

“Data is the new oil” and businesses and governments will need to do more to protect their assets – building defensive and offensive capabilities. As geopolitical tensions worldwide increase, protecting data from cyber-attacks is becoming ever more important – therefore compliance and regulations for businesses will only become stricter.

Another prediction is that fines will become larger and prison sentences longer for breaches in data. Business intelligence firm Dun & Bradstreet were sanctioned for illegally obtaining personal information from 150 million Chinese citizens, with a corporate fine of one million renminbi (£115,000) and two years detention for four employees. As data becomes more precious to governments, greater sanctions will be issued to protect intelligence.

The world of technology moves at rapid pace, so whilst these predictions are relevant now – they can change very quickly. This is what businesses will have to contend with now and in the future, staying ahead of the relentless march of technology – with all of the opportunities and challenges it presents. By keeping an eye on future cyber trends, businesses can stay one step ahead of criminals, protecting some of their greatest assets.

Having looked at some high-profile examples of cybercrime in our first blog of the series, it’s apparent that no organisation is safe from the risk of a cyber-attack. So how can businesses better protect themselves? We consider some of the tactics below:

Create a cyber strategy

A basic, but crucial element in protecting businesses from cyber-attacks is having a strategy in place. This helps businesses to consolidate their thinking, understand the real threats, and have an actionable plan in the event of an attack.

Creating a plan enables businesses to truly understand what assets they have and what needs protecting. Ethical hacking may also be a tactic deployed, to expose vulnerabilities that require attention. Once businesses understand their assets, they can make educated decisions about how to best protect them and set up suitable detection mechanisms that regularly scan for threats. Having this knowledge can make businesses better prepared to deal with a cyber crisis more effectively, including the steps needed to stop the attack taking a greater hold and infiltrating other areas of the organisation.

Finally, understanding how to recover from a cyber-attack is crucial with an incident response and recovery plan – so that business reputation and continuity of service isn’t damaged further. Scrabbling around for a solution mid cyber-attack is far from ideal. So, it is worthwhile businesses preparing a cyber strategy – from asset identification and protection, through to recovery and beyond.

Ensure board engagement and ownership

Where cyber security professionals don’t sit on the board, there needs to be a clear line of reporting to the CEO and other members. Cyber issues need to be discussed regularly to ensure protection is up-to-date and there is ownership for activity – which is especially important during the event of a cyber-attack. Deloitte found that 38% of the FTSE 100 have a clearly identified person or team responsible for cyber security, a noticeable increase in disclosed responsibility from previous years, providing an indication as to how seriously organisations are taking the issue of cyber protection.

Mitigate supply chain risk

As businesses expand, operating across new markets globally, the threat of attack from bad actors increases. In fact research by EY found that 50% of European Chief Information Security Officers (CISOs) agree that the third and fourth parties in their supply chains represent the greatest compliance risk to their business. More than one in three (35%) also said that fixing vulnerabilities in their supply chains will be a clear post-pandemic priority.

Those in cyber roles need to work even closer with leaders across the business, to ensure that supply chains are compliant with organisational expectations around security. Working across areas such as procurement, compliance, and operations, cyber professionals need to ensure that proper due diligence is conducted around security in supply chains – safeguarding customer data and continuity of service.

Educate staff

It’s estimated that 95% of security breaches are blamed on human error, making employees the weakest link in cyber security. Businesses must invest in regular training to help staff understand what an attack can look like – from phishing scams to data breaches. Just under a third (31%) of FTSE 100 businesses delivered staff training in cyber security, representing a significant weakness in protection for many businesses.

Protect from attacks

Organisations don’t want to get caught out, finding out too late that their business insurance doesn’t cover the event of cyber-attacks. With cybercrime potentially damaging so many areas of a business – from reputational damage to the cost of digital recovery – quality insurance is needed to ensure that organisations can get back on their feet quickly.

Investing in quality cloud security is also vital in protecting the business from attacks. It enables businesses to recover data in the event of loss, protect storage against theft, deter human errors that can cause leaks, and reduce the impact of a system compromise.

Bring in the experts

Knowing where to start with protecting a business from cyber-attacks can be a daunting prospect. As is navigating the compliance landscape globally, from GDPR to LGPD. Hiring cyber security consultants can help businesses understand where they are most at risk from attack, enabling them to protect the business, customers, and supply chain accordingly. By implementing best practice, consultants can leave behind a workable model for businesses to follow – helping them to remain compliant and better protected from cyber-attacks.

With businesses operating across borders in a way never seen before, and Covid-19 increasing our reliance on technology, the risk of cyber-attacks has never been greater. We know that no one is safe from attacks either – from individuals to SMEs or large organisations. Not only is it a moral imperative to protect data, safeguarding customers, but it’s a business one too – as cyber-attacks can decimate entire organisations.  Taking steps to stay ahead of cyber criminals, is crucial in ensuring that businesses are future proofed from marauding threats.

Rishi Sunak’s speech at COP26 set in motion further developments to support meeting net-zero targets, which are likely to have significant impact on businesses in the future.

Understanding that transitioning to greener operations requires significant investment, further financial support and incentives were announced to encourage organisations to double down. The plans aim to mobilise the private sector, recognising its ability to act as crucial catalyst for change and requiring efforts to be led from the top. And with increasing pressure from investors and consumers alike, ESG is likely to take centre stage in organisations, driving strategy and change – rather than being just a nice to have.

As a result of metrics being unreliable and incomparable, and loopholes exposed to enable green washing practices, the IFRS Foundation also launched the International Sustainability Standards Board (ISSB) to create greater transparency and accountability in ESG reporting. This much needed global reporting framework aims to measure the right sustainability metrics, enabling investors and other stakeholders to make sound decisions – driving greener strategic decisions and actions.

As for talent, this represents a significant opportunity to operate – particularly within accountancy frameworks. Professionals that have dedicated experience in climate risk and sustainable finance will continue to be in high demand, whilst others will be looking to expand their remits and upskill to meet ESG targets. Consulting firms will also play a crucial role in helping organisations to transform, in order to meet the sustainability targets set by the government during COP26. With the Chancellor of the Exchequer saying the UK would become “the world’s first ever net-zero-aligned financial centre”, there are plenty of changes to be working through.

As companies get to grips with what an increased focus on environment, sustainability, and governance (ESG) means for their business, what are some of some of the methods being deployed to help them get ahead? With investment opportunities and access to talent increasingly linked with solid ESG practices, businesses are looking at multiple avenues to improve their ratings.

Formalising measurements

Given that ESG reporting is non-financial, there continues to be many attempts to formalise the information required to create consistent metrics globally. With investors and other stakeholders relying on ESG data in order to make informed decisions about a company, it’s important that businesses put suitable measurement systems in place to track their ESG journey and achievements.

In a bid to create consistency, PwC collaborated with the World Economic Forum to develop a list of metrics and disclosures companies can use to improve their ESG reporting.  Aligned with the UN’s Sustainable Development Goals (SDGs), the four themes focused on principles of governance, planet, people, and prosperity. The aim being to create more inclusive and sustainable economies globally for societies and individuals.

Shareholders are particularly keen to know that investments are being made wisely, in a way that doesn’t detriment planet or people – such as water being used sustainably and operations that don’t exploit human rights. With capital increasingly geared towards sustainable ventures too, organisations are using ESG measures to review their own operations, and those in the wider value chain, to maximise opportunities and mitigate risk.

Tracking data digitally

Collating data around ESG targets can be a challenge, particularly when it comes to tracking emissions output, energy consumption, and the lifecycle of products. Understanding individual business footprints is difficult, let alone across an increasingly complex value chain.

Discrepancies in how data is collected and maintained, its accuracy and transparency, can cause a headache for businesses. But with increasing jurisdictions around organisational impact on the environment and societies, it’s something businesses need to address.

Organisations are increasingly relying on digital interventions to track ESG practices more robustly. By using cloud computing and agreeing company-wide what data needs to be collected, it provides businesses with a more accurate overview of their ESG frameworks. This can then inform future decision-making processes, support investment opportunities, and identify areas that require transformation.

Mapping risk

More than two fifths (43%) of UK CEOs said they explicitly factored climate change and environmental damage into their strategic risk management activities. By understanding what challenges potentially lie ahead in operational markets can help businesses to better plan, withstand disruption, and mitigate risk.

Research by Deloitte found that 27% of business leaders said that operational impact of climate-related disasters, such as facilities damage, is the biggest environmental issue already impacting their organisation. Understanding the current issues and future threats, can help organisations to map risks more effectively – giving businesses a longer-term view, whilst addressing immediate threats.

Mapping risk also helps organisations to identify energy hotspots, where operations and supply chains may need attention to improve ESG ratings. This in turn can reveal investment opportunities, such as in sustainable technologies, to minimise current impact on the environment and play the long game.

Technology

A report by Deloitte and GeSI argues that technology plays a significant role in closing the gap in sustainability targets – with the ability to meet 103 of the total 169 SDGs. Through technologies such as the internet of things (connecting physical objects to the internet) and cognitive tools (including machine learning and AI), existing digital technologies can help accelerate progress by 22% and mitigate downward trends by 23%.

Technology plays a crucial role in supporting ESG efforts, with everything from better data collation to identifying areas for greater sustainability gains. There has been a notable increase in M&A activity in the technology sector too, with businesses bolstering their green credentials through acquisitions.

With investment increasingly linked to creating more sustainable solutions, it’s an opportunity for businesses to access finance and improve their ESG ratings simultaneously. Deadlines around sustainability are only getting tighter, with alarming headlines predicting doomsday scenarios. As a result, stakeholders and investors alike are demanding greater action from businesses around ESG efforts, which can no longer be ignored. Many businesses, therefore, are looking to get on the front foot with ESG – to meet regulatory and stakeholder requirements, both now and in the future.

Supply chains are in an extremely vulnerable position, having been shaken to the core by global and political events over the past few years. Many businesses, that are still fragile from the pandemic, are having to contend with rebuilding organisations on precarious supply chain grounds. So, what are some of the events that have affected supply chains to date and what is on the horizon?

Covid-19

The most obvious impact on supply chains of late is Covid-19, with 94% of Fortune 500 companies having experienced disruption due to the pandemic. As countries locked down borders – to prevent the transmission of new and potentially more contagious variants of Covid-19 – supply chains descended into chaos, severely impacting the movement of goods. Supply chains were further impacted by isolation requirements, creating staff shortages – making planning and operating even more challenging for businesses.

ESG

An area expected to impact supply chains is around environmental, social and governance (ESG) regulations. With organisations facing increased pressure from investors and stakeholders to improve ESG ratings, businesses must ensure that supply chains are environmentally and socially responsible. This means that organisations not only have to look inwards at creating more sustainable practices, but across entire supply chains too – which have become increasingly complex and dispersed over the years. Organisations must work backwards to assess existing suppliers, whilst setting up stringent procedures to vet new providers.

Cybersecurity

Disperse supply chains also create an issue for cyber security, exposing a weak link for businesses to be attacked. More than one in three (35%) Chief Information Security Officers (CISOs) said that fixing cyber vulnerabilities in their supply chains is a clear post-pandemic priority and half (50%) agreed that the third and fourth parties in their supply chains represented the greatest compliance risk to their business. As supply chains become ever more complex, organisations need to ensure that proper cyber due diligence is conducted – safeguarding businesses and customers alike.

Technology

In order to better manage supply chains – getting the most out of agreements, avoiding disruption, and improving resilience – many organisations are increasing investment in technology. New and emerging technologies such blockchain, AI and robotics, give businesses greater insight into supply chain threats and opportunities on the horizon and can automate many activities. In fact research by Deloitte found that the highest performing chief procurement officers (CPOs) are 18 times more likely to have fully developed AI and cognitive abilities – representing where agile organisations are currently investing.

From mapping energy hotspots that damage ESG ratings to utilising computerised intelligence that can fend off cyber threats, or calculating trade risks to identifying greater efficiencies, technology presents significant answers for many existing supply chain issues. It’s something that plenty of businesses are already utilising, with research by PwC finding that 70% of organisations are using AI in at least one area of supply chain optimisation.

Supply chain expertise

Given how much movement there is in the market at present, it’s no wonder that there has been an increase in demand for professionals with supply chain expertise. From understanding the end-to-end supply chain, to identifying where business processes can be optimised – or establishing where productivity can be increased, agility realised, and visibility improved – quality professionals are in high demand. No truer is this than for supply chain professionals that have exceptional technological expertise. Those that understand the business application of new and emerging technologies – such as analytics driving deep insight or digitising and automating various supply chain activities – these professionals are in even higher demand.

With supply chains presenting as many opportunities as it does risk, it’s imperative that businesses have a much tighter rein on its partnerships. The pandemic exposed supply chain weaknesses, severely impacting continuity of service. With future disruption on the horizon – whether political, environmental, or unforeseen – organisations need to ensure that supply chains are as resilient to turmoil as possible. Many organisations are looking to supply chain professionals and technology for the answer, putting them in the best position for growth opportunities whilst outmanoeuvring uncertainty.

Covid-19 and the climate crisis has pushed the environment, sustainability, and governance (ESG) agenda forward in investors and stakeholders’ minds. As a result, they are increasingly interested in evaluating organisational impact on a range of social and environmental factors, such as equality and climate change.

Backed up by increasing regulation and market perceptions of enterprise value, ESG is an area that needs to be addressed company wide. Rather than being left to the preserve of a sustainability department, or only factored in risk management, ESG is integral to future business success and supporting ethical operations. So how can organisations drive the ESG agenda, creating long-term value for investors and stakeholders alike?

• Develop and maintain ESG strategies

With a raft of new regulations coming in, such as the EU Green Deal that has a bloc-wide goal of zero carbon emissions by 2050, it will affect statutory reporting obligations. This means that ESG considerations need to be at the heart of all strategy decisions, working across the entire organisation – and not just be an add on. With proof being required around an organisations carbon footprint, for example – how it is being actively managed, monitored and reduced – the entire supply chain also needs to be considered in the process.

That’s why ESG is being embedded across entire organisations and no longer siloed.  Given such major changes ahead, some organisations are bringing in support to help manage significant transformations in how business is conducted and regulated as a result. Simply buying carbon credits to meet targets won’t suffice forever. There is also a clamp down on “greenwashing”, a practice of making an investment sound more sustainable than it is actually is. So, a more robust and ethical strategy to address environmental targets across an entire company is likely to be needed.

With COP26 taking place in November, businesses also need to be on the front foot in preparation for anticipated tax hikes to meet carbon neutrality targets – something that is expected to be covered at length in the Autumn budget.

• Invest in assurance reporting

As non-financial reporting, there are yet to be standardised ESG metrics in company reporting. Whilst different countries and groups try to grapple with creating a unified approach to ESG reporting, it’s important that quality data is disclosed, transactions detailed are correct, and information to markets and investors is valid.

This is where assurance reporting comes in, helping organisations to achieve greater transparency in their ESG targets and achievements, highlighting areas for improvement. It’s something that Dow Jones has been monitoring since 1999, with the world’s first “Sustainability Index”, and there are now over 37,000 indices available – highlighting how momentum is gaining pace.

• Build on talent and culture practices

Businesses need to ensure that they have the right talent on board to drive ESG cultural changes across the business. Remuneration needs to be aligned with achieving environmental targets and culture aligned with diversity and inclusion (D&I) practices to ensure talent is drawn from a wide range of candidates.  Ensuring the board has the relevant skills to oversee ESG risks and opportunities is also key, and with such a significant task ahead, neurodiverse leadership teams are the ones that will make great strides.

Conclusion

Leading companies view ESG issues as a business imperative. They understand the need to act now, create value, manage risks, capitalise on opportunities, and set up for future success by sharing their story and vision for the future. By developing an ESG strategy, continually monitoring for its effectiveness, using assurance reports to highlight achievements and challenges, shows transparency and accountability for the organisation.

Having the right talent on board, that is genuinely diverse to encourage equal opportunities and challenge business norms, helps to ensure that organisations keep pushing the envelope with ESG practices.  By taking a holistic approach, recognising the need to identify, measure and embed ESG factors right across the organisation, businesses can improve access to capital and generate greater long-term value for all stakeholders.

M&A activity is rife at present, and as a result a significant amount of boutique management consultancies have been snapped up by larger players. Since 2019, Accenture alone has acquired 92 businesses. But what is driving this growth? And what impact will it have on the consulting industry as a whole?

Mind the gap

As the big consulting firms look to regroup post-Covid, many are taking advantage of growth opportunities by absorbing smaller boutiques in a bid to fill gaps in services or skills. Larger professional services are increasingly acquiring digital and technology-centred businesses, for example, that are seen as complementary to their ‘traditional’ consultancy services.

Equally, where a larger consultancy wants to increase its presence in a certain geographical location, or start a new operation entirely, acquiring a local business can kick start activity. With pre-existing contacts, clients, and local knowledge, acquiring a local boutique saves the legwork of starting from scratch.

Globally, we’re seeing skills shortages in a multitude of areas; and no truer is this than in the technology industry. Where larger businesses are struggling to access suitable talent, with recruitment drives and mentoring programmes not entirely plugging the gap, acquiring boutiques can result in an instant talent boost. Larger businesses can then soak up acquired knowledge and skills, educating the wider workforce in the process.

Longer term impact

As Jonas Salk, the polio vaccine designer, once said: “eventually we’ll realise that if we destroy the ecosystem, we destroy ourselves”. And in terms of the consulting industry, there needs to be caution that not all smaller players are wiped out entirely.

Boutiques provide a valuable role in the consulting ecosystem. By nature of their size, they are more agile to respond to market demands and drive innovation in the process. They can attract game changing talent, that are keen to challenge the status quo, make an impact, and create new solutions. Smaller boutiques are less risk averse, therefore keep larger competitors on their toes – by trying to keep pace.

If larger organisations wipe out smaller boutiques entirely, it potentially stifles innovation and smothers competition – neither of which is healthy for business. But as we’ve seen time and time again, market disruptors are always around the corner. Just as cryptocurrency shook up the financial sector, large management consultancies aren’t shielded from change either. Whilst M&A activity is vital for business growth, it should be conducted with the view to maintain creativity and innovation – the very reason that made it an attractive acquisition in the first place.