"Sustainability and any kind of ESG related topics also present several challenges and opportunities in the area of sustainability reporting and auditing. Reasons for this may be the lack of a central database, but also the difficulties in the technical evaluation of this data. For this reason, we show in the presentation, how data from different sources concerning the suppliers and the supply chain of the textile companies Adidas, H&M and Nike can be transferred into a knowledge graph and what advantages this offers regarding sustainability reporting and auditing.
Opportunities and challenges regarding reporting and auditing bring a variety of issues. One of them is certainly the supply chain. However, this is also particularly well suited for visualization and analysis with the help of a knowledge graph. Until now, the focus of the analysis has mostly been on topics such as process optimization and less on ESG topics. But that is changing. Precisely because the legal framework continues to change. Particularly considering the new Supply Chain Act, which will come into force in Germany on Jan. 1, 2023, and is intended to bring more transparency to companies’ supply chains. Some other countries such as the United Kingdom, the Netherlands, Austria and Switzerland already have a supply chain law. A mandatory European due diligence system is planned, and there is also an increasing demand for legislation worldwide. The main objectives are to protect and respect human rights and to provide access to redress for victims of corporate abuse. In addition, companies can also analyze their supply chain regarding other ESG-related issues, such as sustainability. To this end, the new law requires companies to disclose their direct suppliers. With the suppliers or the supply chains being disclosed there will be an increasing need for technical solutions to analyze and evaluate the newly acquired data.
Since the German or European Supply Chain Act has not yet come into effect, this framework is implementing voluntarily disclosed data from the supplier lists of Adidas, Nike and H&M, which are operating in the textile industry. The supplier lists are available on the company websites. Thus, a first approach to the future analysis of that data is given for investors by comparing the supply chains of companies in the same industry. In a further step, the knowledge graph is now enriched with freely available data. This data can come from various sources, such as databases, social media, news articles or publications from NGOs or governments. For this, there are also no limitations of what exactly it must be about. Basically, all ESG aspects should really be covered. Accordingly, the graph includes data on child labor, corruption, tax avoidance, sanctions lists and environmental impacts. Data from rating and ranking agencies should also further strengthen the decision-making process.
The analysis of supply chains regarding ESG issues is becoming increasingly important. New approaches and technologies are needed to meet this demand. Knowledge Graphs offer a good way to analyze companies and their suppliers. Additionally, with the help of a Knowledge Graph, various other data sources can be connected and thus a variety of analyses can be performed. Our framework provides a guideline on how to aggregate and analyze the often unstructured and scattered data."