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MODE Global Attains EcoVadis Silver Rating, Recognizing ESG Excellence

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MODE Global Attains EcoVadis Silver Rating, Recognizing ESG Excellence

MODE Global, a prominent third-party logistics firm, proudly announces that it has achieved the esteemed “Silver” rating from EcoVadis, a leading provider of business sustainability ratings and performance improvement tools for global supply chains.

EcoVadis evaluates companies based on international sustainability standards, including the Global Reporting Initiative, the United Nations Global Compact, and ISO 26000. The sustainability scorecard assesses performance across 21 indicators categorized into four themes: environment, labor and human rights, ethics, and sustainable procurement. The “Silver” rating reflects MODE’s position among the top 25 percent of companies assessed.

Lance Malesh, President, and CEO of MODE Global expressed, “2023 has proven to be a landmark year in MODE’s ESG journey.” He emphasized the company’s enhanced focus on environmental, social, and governance pillars, attributing the success to the efforts of the ESG committee.

As a global shipping and logistics provider, MODE is an EPA Certified SmartWay® Logistics Company Partner. In 2023, MODE invested significantly in technology tools aimed at helping customers reduce their carbon footprint. This includes carbon calculators to analyze transitioning over-the-road shipments to more environmentally friendly transportation modes, contributing to reduced fuel usage and costs through tools like consolidation, smart routing, and asset optimization.

In the realm of governance, MODE received the 2023 NAVEX Excellence in Ethics and Compliance Award, highlighting the company’s commitment to maintaining a culture of compliance, protecting stakeholders’ interests, and aligning with its brand and values.

Sharon Johnson, Chief Legal Officer, and ESG committee executive sponsor remarked, “The transformative strides we’ve accomplished company-wide in support of our ESG and sustainability goals are phenomenal.” She emphasized the significance of securing the Silver rating for both MODE Transportation and MODE Global, underscoring the commitment to driving ESG importance across the family of brands.

The recognition from EcoVadis reaffirms MODE Global’s dedication to environmental responsibility, ethical practices, and governance excellence, setting a strong foundation for continued progress in 2024.

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The Consequences of ESG Risk Exposure

Last week, news emerged linking an electronics company to the transport and employment of labor in Xinjiang, an autonomous region in northwest China with documented occurrences of widespread human rights violations. This is the latest in a series of reports and white papers investigating supply chain connections to this region and the forced labor on its inhabitants. These reports not only expose the atrocities and human suffering in the region but also reveal significant supply chain risks that may not even be on an organization’s radar. With more than half of companies lacking supply chain visibility across their extended ecosystem, organizations are at a growing risk of both environmental, social, and governance (ESG) reputational risks, as well as regulatory risks as governments across the globe ban supply chain exposure to these human rights violations.

Nth-tier Supply Chain Risks

Lacking visibility across the supply chain leaves companies susceptible to blind spots and risks of which they may not be aware. For instance, inspired by this news, we identified almost one hundred companies with direct relationships to the company highlighted in their article, a number that significantly expands when looking beyond the first-tier. Thanks to the hyper-specialization and opacity of supply chains, many companies may not be aware that they risk potential exposure to human rights violations in Xinjiang.

Below is a breakdown, by industry, of companies with direct connections to Universal Electronics Inc. (UEI). While the software industry intuitively comprises a quarter of the companies, other industries such as machinery, media, or entertainment may initially assume minimal exposure. At a time when every company is a tech company, few companies are immune to these kinds of connections.

Global Focus

These recent revelations build on a growing governmental emphasis on prohibiting forced labor from supply chains. In July, the United States government issued a joint advisory pertaining to the heightened risks for businesses with supply chain and investment links to Xinjiang. Released by the U.S. Department of State, U.S Department of Treasury, U.S Department of Commerce, the Office of the U.S. Trade Representative, and the U.S. Department of Labor, the “Xinjiang Supply Chain Business Advisory” highlighted the range of risks to which companies may be exposed when conducting business in that region. As the advisory notes, these include exposure to regulatory risks, surveillance, and human rights abuses.

This advisory reflects the growing focus on ESG supply chain risks as well as the regulatory risks related to the inclusion of prohibited and restricted companies within a supply chain. In the U.S. the Department of Commerce continues to expand various restrictions lists due to human rights violations, banning solar panels companies to numerous tech companies for their connection.

In the European Union, the Global Human Rights Sanctions Regime introduced restrictive measures of entities connected to human rights violations. This is part of a broader emphasis across the ESG spectrum, including the Sustainable Finance Disclosure Regulation as well as mandatory due diligence for human rights, environmental, and governance issues.

Further, as ESG concerns spread worldwide, so does the country coverage for impacted companies. Below is a map denoting the geolocations for the companies which are supplied by Universal Electronics. It is worth noting that, while the US and the EU have issued restrictions and guidelines in this regard, nearly 50% of UEI’s consumers are located in these regions.

Gaining Visibility Across Supply Chain Risks

The Joint Advisory notes, “Given the severity and extent of these abuses, businesses and individuals that do not exit supply chains, ventures, and/or investments connected to Xinjiang could run a high risk of violating U.S. law.” Based on both market forces as well as regulatory shifts, it is increasingly essential to maintain visibility across your extended supply chain and proactively eliminate potential exposure to ESG reputational and regulatory risks.

While we quickly identified almost one hundred companies with potential ESG exposure, we only referenced direct suppliers. By looking at the second, third, fourth tier, and beyond, these numbers exponentially grow and illustrate the complex web and risks that extend throughout supply chain ecosystems.

The complexity of these networks and the growing consequences for failing to address ESG risk in the supply chain highlights the clear need for organizations to reexamine how they identify and monitor their extended business relationships.

To learn more about extended supply chain risk and the consequences of ESG risk exposure, visit interos.ai.

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Andrea Little Limbago is the Vice President of Research and Analysis at Interos