ESG Tops Concerns of Compliance and Procurement Professionals

by Brian Alster

A recent report sheds light on the increasing pressures professionals are under to maintain compliance in an ever-changing economic, business and political environment.

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Environmental, Social and Governance (ESG) screening and monitoring has risen dramatically as a top concern among compliance and procurement professionals, so shows a recent study conducted by Dun & Bradstreet.  While the three central factors of ESG are clearly defined and understood to measure the sustainability and ethical impact of a corporation, how to handle ESG within third-party risk management programs isn’t always clear. These are among the findings in Dun & Bradstreet’s third Compliance and Procurement Sentiment Report, an ongoing survey designed to uncover issues that impact compliance and procurement professionals. 

More than 600 industry professionals from both the US and UK provided feedback about their day-to-day and how they respond to change.  The report measures sentiment compared with our benchmark report of June 2018 and a second report of October last year. This edition digs deeper into the challenges of ESG, fraud, the convergence of compliance and procurement, as well as regulations and sanctions.

The report has shed light on the increasing pressures professionals are under to maintain compliance in an ever-changing economic, business and political environment. Gaining full insight and transparency in the supply chain is critical to managing risk for both compliance and procurement officers. Fraudulent activity and Brexit-related regulatory change are complex issues, but by knowing the processes needed within each department, businesses can successfully ensure today’s requirements are being met while planning for the future, too.

Sentiment remains positive overall

For the third straight survey, one thing has remained clear: respondents have an overall positive sentiment of their roles within their organizations, but are keenly aware of the increased pressures to develop and maintain third-party risk management and compliance programs. Their efforts need to ensure today’s requirements are being met while planning for tomorrow and beyond. From June to October of 2018, respondent’s sentiment related to the efficacy of their roles went up eight points to 108; however, when responding to this most recent survey, the overall sentiment dropped very slightly to 107. The one-point change is not yet statistically significant, but will be monitored to inform any emergent trend.

How Compliance And Procurement People Feel About Effectiveness in Role


June 2018

October 2018

February 2019

Current Effectiveness




Future Effectiveness





Across the three surveys conducted to date, a slight  decline in current and future effectiveness of procurement and compliance functions is seen most with respondents who identify as decisionmakers. The decline in sentiment was reported most in the government and retail industries - not surprising for heavily-regulated sectors - and with senior personnel held responsible for risk management programs.

Environmental, social and governance screening concerns on the rise

The growing concern around ESG may be tied to the decline in the current effectiveness of the functions. While most compliance and procurement teams are aligned that environmental, social and governance is important to monitor within third-party risk management programs, it can be difficult to clearly identify and account for those issues.

Respondents were asked why they were concerned about the impact of ESG on their business in the next six months. Fifty-one percent cited the need for more data to be able to identify and verify entities. In addition, more than 43 percent of respondents confirmed it is difficult to identify ESG within both customer due diligence processes and supply chains.  

Convergence, fraud and sanctions challenges

Convergence views between compliance and global sourcing teams remained consistent.  The participants in this survey, like their predecessors, agreed that convergence exists and there are certain tasks and duties that benefit from uniting the two functions.

Fraud is a concern that will never fully go away for these professionals, especially for those with manually-intense processes. With so many companies relying heavily on self-disclosure and decisioning within the identifying, verifying and monitoring process, compliance and procurement professionals will need to continue to keep fraud and its impact on brand top of mind in this environment.

Regulations and sanctions, and the due diligence efforts needed to meet ever-changing regulatory requirements, are challenging for some compliance and procurement professionals. Having full transparency into crucial information like the complexities of corporate hierarchy and the ultimate beneficial owner is needed now more than ever.

Brian Alster is the General Manager of Supply & Compliance at Dun & Bradstreet.