ESG data can get under the skin of companies – sometimes literally.
A European fashion retailer was accused of selling fur products despite repeated appeals and evidence highlighting the mistreatment and unethical slaughter of animals such as foxes, rabbits, and chinchillas.
The incident was one of thousands included in a new RepRisk report for its investment and corporate clients that highlights ESG risks in global supply chains over recent years.
The report is the first in a series of industry-focused publications that have been generated from a research project that mined millions of publicly available documents for data on supply-chain risk exposures. The research captured supply-chain risks by examining how the data crosses with 28 ESG issues, including human rights abuse and biodiversity loss.
“With this report, we’re illuminating risks on supply chains to show what data can do to help support our clients in managing these supply-chain risks,” RepRisk Chief Commercial Officer Alexandra Mihailescu Cichon told Data Management Insight. “When something does appear, the data will help surface that so that investors can stay ahead of these risks.”
Fashion Retail
The debut report, which looks at the fashion retail space, comes as corporate supply chains find themselves under stress from new economic and geopolitical trends and as regulators require fund and investment managers to explain the sustainability of their investment products.
Data from these companies can account for the largest part of a company’s internal and regulatory reporting obligations. Because the often-many hundredsof companies that feed into each business’ supply and distribution operations are those most likely to have an impact on its overall sustainability, gathering that information is critical for its own ESG assessments and those of investors.
The data is also important for reporting to regulators who require a large amount of validated information on their performance, especially relative to human rights infringements, forced labour practices and biodiversity loss.
Unexpected Results
Confounding predictions of the authors of the launch report, animal welfare and ethical sourcing was found to be the most common among 310environment-linked incidents within the fashion retail industry recorded since 2020. The most common risk exposures were to social factors, including employment conditions, human rights abuses and occupational health and safety issues.
Greenwashing was the top-ranked governance exposure and below that – the eighth-most common issue – was animal mistreatment. That registered even higher than environmental harms such as river and ocean pollution, which the authors had hypothesised would be among the most prominent given the often-publicised misdemeanors among apparel manufacturers.
“It was interesting to us that animal treatment was the number-one environmental issue when we looked at the hypothesis that we had going into it,” said Mihailescu Cichon. “But this topic is also linked to greenwashing, because if consumers expect ethical sourcing, or if that’s the story that they’ve been given and then in reality not only is that not the case, but is exactly the opposite, that’s a significant reputational risk that investors would want to know about.”
Wider Scope
Through its broader research, RepRisk unearthed more than 5,000 ESG supply-chain risk incidents among US companies in the past five years. From May 2024 to April 2025, 3,956 incidents had been linked to 6,596 incidents globally (some individual incidents involved multiple companies) and almost 90 per cent involved private companies.
While many incidents would not have been illegal, they are all potentially reputationally damaging and potentially of concern to investors, Mihailescu Cichon said.
The spread of incidents across company types was not unexpected, she added.
“It’s in line with our hypothesis and in line with the makeup of our own data sets; we have a big data set on private companies,” she said. “It is also a reflection of the nature of global supply chains – with many small and mid-sized, private companies around the world.”
The retail sector report is the first in what RepRisk intends to be a series of deep dives into the ESG impacts of various industries’ supply chains. Like the first, they will leverage the company’s troves of information on more than 300,000 public and private companies.
The next editions are likely to focus on the energy transition and food and beverage sectors, Mihailescu Cichon said.
“Data plays an important role in helping our clients see through all of this complexity and really be able to pinpoint where the risks are, to help them strategically engage with their suppliers, to deploy their auditing resources in a smarter, more efficient way, while having the peace of mind that there’s an overall continuous, passive monitoring of their supply chain.”
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