RiskTalk: Sustainability in third-party risk management

Sustainability in third-party risk management: From complexity to control

In the latest episode of RiskTalk, the 3rdRisk podcast, our guests share their insights on the future of sustainable risk management. Jille Luijckx (Partner Sustainable Supply Chains at Deloitte) and Bram Ketting (CEO of 3rdRisk) discuss how organisations can effectively manage sustainability risks in an increasingly complex world.

While sustainability was once primarily a PR topic, it has now become a business-critical risk. The Corporate Sustainability Reporting Directive (CSRD) requires large organisations to provide detailed sustainability reports from 2024 onwards, while the Corporate Sustainability Due Diligence Directive (CSDDD) demands concrete action throughout the entire value chain.

"Legislation plays a key role," Jille explains. "Of course, there are societal discussions, but Europe is now also enforcing various regulations. This creates awareness and focus." These developments push organisations to look beyond just their direct suppliers.

Impact across different sectors

The impact of these changes varies by sector. In manufacturing and industry, electronics manufacturers, for example, deal with thousands of Tier 1 suppliers. Jille shares an interesting example: "Feed additives for livestock directly reduce emissions across the entire supply chain. It’s fascinating how something as simple as animal feed supplements can lower the total carbon footprint of a product in stores."

In retail, we are already seeing concrete examples of this transformation. Albert Heijn now displays CO₂ impact on packaging, which, according to Bram, not only improves transparency but also helps consumers make better choices. The financial sector is under perhaps the greatest pressure, with strict ESG reporting requirements directly influencing lending and investments.

A practical approach to implementation

Successfully integrating sustainability into risk management requires a structured approach. Jille describes an effective method that segments suppliers into three levels:

• Entry suppliers, who are at the start of their sustainability journey,
• Premier suppliers, who have made initial commitments, and
• Champion suppliers, who act as strategic partners.

"With champion suppliers, you can have in-depth discussions about co-innovation," Jille adds. "This group, roughly 10–20% of your suppliers, can make a real difference in your sustainability strategy."

Technology as a critical enabler

The complexity of modern supply chains makes manual monitoring practically impossible. "You need to redesign your systems," Bram stresses. "If your solution is to send an email to a thousand suppliers, is that really the best approach? I don’t think so."

Modern platforms enable automated data collection, centralised risk monitoring, and real-time insights. This is essential for effective compliance and risk management in an international context.

Overcoming international challenges

One particular challenge is the global nature of supply chains. "In Asia, they often have no idea what we’re doing here in Europe," Bram observes. Successful organisations address this by providing information in local languages, using videos and visuals for explanation, and rolling out changes step by step through pilot projects.

The road ahead

Sustainable risk management is a journey, not a destination. The experts in the podcast stress that organisations should start small—but they should start. Begin by mapping your key suppliers, standardising requests, and implementing a central platform for monitoring.

Regulations are coming, and industry leaders are already building their competitive advantage. As highlighted in the RiskTalk podcast, the key to success is not waiting until you’re forced to act, but proactively developing a well-thought-out strategy that leverages technology effectively.