Thinking about it in the context of, I wanna understand if my most critical suppliers are all based in a flood risk region, that to me is a business decision. It's really interesting from an insights perspective, and I want to understand how to diversify my supply chain, or shift to, sourcing from, suppliers that are not based in regions that are at flood risk Good morning, good afternoon, or good evening, where everywhere in the world. Welcome to episode 64 of the Sustainable Supply Chain Podcast, the number one show focusing exclusively on the intersection of sustainability and supply chains. I'm your host, Tom Raftery, and I'm thrilled to have you here today. A huge thank you to this podcast's, amazing supporters. You make this podcast possible. If you'd like to join this community support starts at just three euros or dollars a month, which is less than the price of a cup of coffee. You'll find the link in the show notes or at tinyurl.com/ssc pod. Now you know that moment when a company says, we had no idea our third tier supplier was using forced labor. Yeah. Well, today's guest Rhea Rackshit helps make sure that excuse doesn't fly anymore. She builds tools that map out the messy, murky underworld of global supply chains. So if your cotton's coming from a sketchy source or your palm oil is fueling deforestation, she'll help you spot it before the regulators or the headlines do. But here's the twist. Rhea is not your typical data forensics spreadsheet warrior. She's a design nerd with a background in social innovation and she's obsessed with making risk detection actually work for humans, not just compliance reports. This conversation is part supply chain therapy session, part call to action, and it's an awesome conversation. But before we get into that, just a few quick words about the coming episodes. So next week I'll be talking to Jen CHew, who's head of solutions and consulting for Bristle Cone. Weeks. After that, I'll be talking to JF Gagne, who's the Chief Strategy and products officer for Pendulum, and I'll be talking to Don Weatherby, who's CEO of Regen X. So without further ado, as I said, my guest on the show today is Rhea. Rhea, welcome to the podcast. Would you like to introduce yourself? Sure thing. Thank you so much for having me. My name is Rhea Rakshit and I'm the VP of Product Management at Sayari. I have a background primarily in supply chain transparency and traceability and have been working at Sayari for the last two and a half years or so and based in London. Okay. And for people who are unaware, Rhea Sayari is what? Yeah, Sayari is effectively a risk compliance technology that really looks at enabling companies to identify risks both in the context of supply chain risk or trade-based compliance risk, but also in the context of corporate ownership risk. Anything from ultimate beneficial ownership or sanctions risk or state owned enterprise risk. So really leveraging the power of data and leveraging our graph technology to understand commercial relationships and explore and analyse your risk more effectively. Okay. And you gave us a little bit about your own background very briefly, but give us a little more detail. How did you get into this space? Yeah, sure. So, I think my background, if I go all the way back, really extends from my time in, I think this is undergrad going back many, many years in development economics. So I've always been interested in looking at how we can, demonstrate social impact or social change from a, business perspective. That's really where my journey or my career started in this space. And it evolved. I won't go into quite a ton of detail here, but from working really very directly in the social impact space to then graduating to design and really thinking about how design could shape and really enable companies to make informed decisions when it comes to specifically things that are social change related. So my degree, which is unlike a usual design degree, is in design for social innovation. And I think that unlike, typical design degrees, which are very frequently in the context of graphic design or interaction design or UX design, this was really looking at systems design and applying systems thinking in the context of problem solving. So, what was really interesting for me was this was a really cool opportunity to blend my more creative side in the context of thinking about problem solving creatively, with my interest in social justice and social impact. And so I came out of that program looking for an opportunity again, which would allow me to leverage design in this particular context, and I stumbled into the world of supply chain transparency, and there's been, no looking back since. I, started off, I think working on a project this is over a decade ago that was looking actually at the consumer side of supply chains. So thinking about how to make consumers more aware and more conscious of their buying decisions. And enabling consumers to have really more information about the products that they're buying. And I was in the States at that time and considering this was now over 10 years ago, there wasn't a ton of information available. Definitely not as much as I see now that I'm living in the UK and what you see in Europe. So, it was really interesting to see how when we approached brands or we were talking with brands, they themselves didn't have that information. And it occurred to me that there was this information black hole to some degree in the context of being able to be transparent about your supply chains and talking about responsible sourcing more, transparently. So I spent some time on the consumer side of things, which was really interesting, and then had an opportunity to switch over to working again in technology, but for customers. So you're looking at B2B. And in this regard that, has been a turning point for me and has really shaped my journey in, terms of where I am today, which is working with companies and enabling them to use technology or tooling or software be more transparent and to demonstrate responsible sourcing and ethical sourcing decision making to their customers, and also to just uphold their own internal mandates or external policies that they need to report on. So, it's been a, a bit of a long-winded journey, but really eye-opening I think in the last 10 years or so in terms of how the industry as well has shifted quite dramatically. And, happy to go into that as well in, in the context of what it was like working in supply chains, pre covid and in, talking about early two thousands to where, to where we are now. Yeah, we'll come back to that, but I'm just curious, coming from a background of social innovation, has that shaped your approach to product development in this space? Absolutely. I would say this is one of the most important things to me personally, and I'm really happy that I'm in a company now where I feel like this is sort of a part of our company philosophy is that we are ultimately a technology company. We are a B2B SaaS company and we work, our customers range from large corporations to smaller enterprises. But ultimately the reason for doing this and the downstream impacts of the work are really felt in the context of, what I would describe to be effectively looking at, you know, the last mile, or the end of the supply chain. So when you think about, the work that we have done in enabling companies to adhere to U-F-L-P-A. For example, the legislation in the US, which is specifically targeting forced labor practices in Xinjiang. The downstream impact ultimately, what we're hoping for is to see companies move away from sourcing in those regions and choosing to source from suppliers that are well paid that have fair working practices and wages and, are not effectively engaging in, forced labor. So when you talk about supply chains and you work in the supply chain space, I always keep in mind the last mile and really looking at the end to end supply chain. And in some ways, you know, as, as cheesy as this sounds I, feel like this is a bit personal because I'm from India originally and so I've seen firsthand, you know, what, the impacts of that can be. So I think that is sort of been a north star for me personally. And I am, I'm very lucky that I'm working for a company that I think adheres to the same philosophy. Coming back to the change that you referenced before I asked the question, talking about how, ESG or CSR or whatever it used to be called. Used to be more of a, a buzz word or a checkbox exercise, you know, how do you think that's changed and why do you think that's changed? Yeah. I think it's actually been fascinating or really interesting to see how the approach has changed over the last decade. I, I mean, I remember as I was mentioning not very long ago, when all of these conversations were basically framed or centered around corporate social responsibility. That was the jargon that was being used and effectively any sustainability initiative was equated with the CSR initiative, and they, Hmm. again, for the most part, centered around voluntary programs around community engagement or carbon footprint accounting, things like that. And I also think that the, the pressure or the driver or the motivation for CSR was actually coming from investors. It wasn't really regulations based or regulations oriented. And, so what that meant from a supply chain context was companies were actually, as you just mentioned, checking the box when it came to ESG, doing the bare minimum, ensuring that there was some level of I would say surface level due diligence and only for their direct suppliers or, vendors. They weren't really looking at the last mile, in fact, in the supply chain. But I think now that definition has fundamentally changed of sustainability itself. I think it's much broader. It's much more integrated. It encompasses ESG and human rights and biodiversity and deforestation, and of course it's all upheld as well in the context of upcoming legislation and regulations, which has been a game changer in some ways, I think, in the industry. So I feel like companies now are much more, are held accountable much more in the context of visibility beyond just the tier ones. So you are looking at due diligence practices from your direct suppliers, but then all the way upstream to the raw material producer and you are accountable for that, which is a massive shift from what we saw, 10, 15 years ago. And then, bringing this back to sort of, a foundational point of view that I have, which is ultimately, the practice of sustainability is very closely interlinked to resilience and business disruption. I think what has been the most fascinating trend to see is how companies are finally understanding that it is in their interest really to look at sustainability, not only in terms of regulatory pressures, which of course in the context of compliance, but also really as a smart business decision. Because if you think about it, you know, you're, you're talking five years ago now, which is pretty interesting that, that we had the Covid pandemic. But importantly, equally importantly, I think enough extreme weather conditions that have been caused by increased levels of climate risk, which have caused massive disruptions in supply chains. And that has a profound business impact on companies. So I think that there is a much more nuanced understanding of what it means to invest in sustainability and to have a sustainability strategy that's really well embedded and connected into your business strategy than there was ever before we started talking almost in common parlance at this point in terms of supply chain disruptions. Okay. And when we talk about embedding sustainability into decisions and strategy, what does that look like in practice for companies today?. Yeah, I think that's a great asked a lot in our practice. And it's, it's always interesting because I don't think that there's a one size fits all, or a silver bullet approach to building a sustainability strategy. And it really depends on numerous factors from the size of the company to the resourcing they have available, to the trade-offs that they're making in terms of, how they're investing those resources. If I were to, force myself to think about this, I think there are a few again, design principles that are quite common across the board. And the most interesting one that we've seen is this, again, a marked shift towards consolidating the ownership of sustainability across teams. So it's no longer just the sustainability team siloed off somewhere doing their, CSR initiatives or their own ESG thing. But really this is now a forced conversation that's across compliance, and legal, and business, which are teams that are integral or critical to a company. And so, the cross-functional ownership. And I've seen this, we've had, companies that have established what they call centers of excellence under a Chief Risk Officer or a compliance officer sort of umbrella where they are really looking at basically maximising efficiency in terms of decision making by ensuring that all teams are brought to the table and that it is not this siloed structure anymore. And that the responsible sourcing folks are just as involved in the procurement conversation as the legal folks are. And so I think that consolidation of roles and the, the shift in the market in terms of thinking about integrated risk management framework has been super interesting and I think has been really successful with some of the companies that have attempted to do this. A second order of priority, I would imagine would be just to ensure of course, that you're starting with the right scope. I think that that's been something that a lot of companies struggle with. They want to kind of boil the ocean. They want a sustainability strategy that solves for everything under the sun, but that's also a sure fire way to result in a stalled program or just, you know, being sort of deflated when it comes to success. So its also extremely difficult to get buy-in to be able to do everything all at once. So, our recommendation has always been, start with a very targeted approach. Do something that is highly concrete and very specific in terms of deliverables. Get that buy-in then make sure that again, the decisioning you have buy-in across stakeholders in order to, achieve this, track the outcomes, track the metrics. And then attempt to bring that to scale. Those are pieces where we've seen the greatest amount of success is when, again you have cross-functional buy-in into this decisioning and the outcomes are quite transparent and, and very tightly scoped. Speaking of outcomes, being transparent, a lot of companies are saying that they want visibility in their supply chains, but, what's the difference between visibility and insight? I love that question. I, I, I have a particular point of view on this, which is that visibility and transparency is almost table stakes. You have to do it. There's no way you can reach insights or have any type of risk analysis or any type of ESG be programmatically be successful without having full visibility into your supply chain. So it almost feels like a prerequisite. That has been a stumbling block for a lot of companies where the lack of visibility is what is causing the lack of traction in the context of a sustainability initiative that they're pursuing or any type of reporting. And so I think to the degree that you want to have a successful risk management program that has these really interesting insights and really great analytics when it comes to reporting against sustainability initiatives or reporting in terms of how, what the ROI on those initiatives is against business continuity. You have to start with supply chain mapping and you have to have that level of visibility because you are bound to run into, issues down the line where you are not able to make those calculations or do that level of insight and analytics work without having full visibility upstream. So to answer your question in terms of the difference between the two, the insight is really indicative of what you can potentially do. It presents itself as a means to make a decision. Whereas the visibility is just a prerequisite for even enabling that insight to actually happen. And what kind of risks are companies still missing when it comes to their supply chain partners or networks or any of the above? Yeah, I mean, there's such a wide, I think that the number of risks that you can potentially cover is just, seems to be infinite. And also I, I do love the, the phrasing of insights. I think I like that more than risk in some ways, because risk has a very, negative connotation and, makes companies think about what they're doing with a sense of urgency that is not, doesn't have a very positive spin. But if you present that as insights people get excited, oh, I can make decisions based on this. I can potentially have a redundancy or a contingency plan when it comes to making my supply chain more future proof. And so I think when you think about the range of domain that you could potentially cover in the supply chain space. This ranges from all or any types of environmental risk. We named a few earlier when it comes to deforestation risk, biodiversity risk, climate risk, which I think is critical. Ensuring that companies have a pulse on their, in, in order to be able to measure their carbon footprint, ensuring that companies are aware of where they're sourcing from in the context of geographic risks such as water scarcity, or drought, or flood risk. That comes up quite frequently. And then there's the, the entire section, the S part of ESG, which is the social risks that fall under the umbrella of labor risk, more broadly speaking and insights if we will. What I think is, fascinating is thinking about ESG as separate from thinking about resiliency sometimes makes for ESG to be almost a second class citizen. And thinking about it in the context of, oh, this is like, it's an optional thing. It's, part of a, maybe an internal commitment or a mandate unless it's coming from some type of regulatory pressure. However, thinking about it in the context of, I wanna understand if my most critical suppliers are all based in a flood risk region, that to me is a business decision. It's really interesting from an insights perspective, and I want to understand how to diversify my supply chain, or shift to, you know, sourcing from, suppliers that are not based in regions that are at flood risk or regions that are experiencing deforestation and so forth. And so that's what's really neat in the context of working in the space is that the insights that you can generate are infinite to a degree and really kind of dependent on where and how you wanna lean in, in terms of your business decisions. And making sure that they're being framed again in the context of trying to ensure continuity in your practice while also being, just a responsible business. I think that's just a double win and, and something that people should lean into. Okay. And. Seeing as you brought up the S in ESG, how can supply chain leaders ensure that their efforts aren't just performative, but actually have a social impact? Yeah. I think a lot of this comes down ultimately to what we talked about a moment ago, which is measurement of ROI and just ensuring that again, you're not playing sort of lip service to certain types of regulations and you're not merely checking the box and you're actually doing something to make things right or to improve a situation. And this kind of takes us to the second part of risk management. We've talked a lot about identifying risks and identifying insights that can lead to effective decisioning, but the decisioning really then ultimately comes down to is there a remediation plan if you find something wrong? Is there a way for you to either reach out to the supplier, make sure that that specific concern has been addressed? If there is, that's great. You can continue the relationship. There's hopefully a remediation path forward. You can monitor that actual change and you can report on it. If there isn't, then it's a decision that procurement has to make in terms of do we wanna continue to do business with this and continue to basically perpetuate something that, you are either in non-compliance for or it kind of sits in that gRhea area where it comes to, you know something's wrong but you aren't really taking an action on it. And so I think, there are a few different ways in which regulations are are forcing this. I think the CS Triple D specifically, and I think the EUDR as well have as a part of their mandates have mentioned that they want to see the actual reporting of due diligence work across the supply chain, so ensuring that companies are actually have the documentation available to say that they have done the work. However, I think that there are, from an internal business ROI perspective, you really do want to make sure that you have at the start of any of these programs, a very clear path forward, not only in risk identification, but also the remediation that follows so that your company is in a position to actually do something and take the right decision once that insight or risk has been uncovered. So, there is a lot of pushback, if I, if I put my consumer hat back on, in terms of what has been labeled as greenwashing. This comes up quite often in terms of companies putting out reports that are not very substantive in the context of the work that they've actually done. But really just calling out, putting some numbers on a page with a few different pictures and calling it a day. But there are definitely other companies that have milestones in terms of, by x date, we wanna achieve this level of traceability, or by y date we are moving away from sourcing palm oil from deforested regions in Indonesia and only sourcing from RSPO certified palm producers. And so think being mindful as a consumer of the specifics of what a company is reporting and as a company, recognising that the more specific you are, the more impactful you actually are. That's sort of critical when it comes to reporting. And I think to the degree that we, that, folks like me in the, in the software world and enable it, we certainly do have conversations upfront for our own purposes in terms of saying how do we know that we have been able to successfully get you there? And as a product, how can I tell whether my technology has been sufficient enough to enable you to get to the full cycle versus just, drop off at the risk identification level. So, few different ways to approach that, but I think it really comes down to having real clarity of vision when you start a program in terms of what you actually wanna achieve. Okay. And is there anything you've seen in the global South that boardrooms in the global North, need to understand? I think the most compelling thing in, in terms of that division is having a representative of a supply chain that's further upstream, actually at the table in some of those conversations. For the most part, this is true of certainly the regions that we service right now as a company. But I'm very excited that we have now expanded to APAC as well. So we do have offices in East Asia. So much of the manufacturing and the the supply chain actually lives in the global south. And certainly, when you're considering China and Southeast Asia, not necessarily actually southern hemisphere, but on that side of the world, you have folks in boardrooms who are part of the supply chain that are further upstream and have a very different perspective when it comes to how and when and why they need to be reporting on things which is pushed to them really from the downstream global north companies. And so it is fundamentally quite eye opening to kind of understand, in the global north there is an expectation that, yeah, of course we want transparency and traceability and that the onus is on the suppliers to provide you with all this information. But it is quite an effort and so for me, what that tells me from a product perspective is how do we make it as easy as possible for the folks upstream to be able to report this information in, to be able to be part of that reporting procedure and part of the process for making traceability happen in a way that's not cumbersome and is not an effort for them. Because it certainly is, and I think there, as a product designer, I think that's what's most important to understand is to have enough empathy for every single participant in this process to ensure that they're equally able to get something out of this versus servicing just our customer who's predominantly global North based. So yeah, I think, I mean, I love that question. I think it has been very interesting to see both sides of the, the same coin you know, similar to sort of the flip between looking at this from a consumer perspective to a business perspective, looking at this from a buyer perspective and a supplier perspective can be quite revealing. And so I think that's, what's been most interesting to watch and has really, I think, has benefited me honestly in the context of design. Okay, great. And seeing as you brought up the idea of ownership, who owns sustainability decisions inside a company today and and who should? Yeah, great question. So I think this is very similar to what I was describing earlier, which is who owns it right now? Typically, I think or who, who used to own it previously, definitely owned by sustainability teams. Again, I feel like teams that have been siloed or sort of kept separate from the business side of the company. But I do think that's changing and I think that's been, for me a really encouraging shift across the industry is that the ownership is now cross-functional. You are seeing teams banding together and forming these centers of excellence around sustainability and around the business that are putting sustainability initiatives and reporting on the same level really as looking at other business continuity risks or other business continuity metrics that the, that the company is measuring. And so I think that to the degree that we can see this convergence of ownership across the board and getting more, more buy-in from stakeholders across the company, the more successful this will be. And so I always, when I I'm talking with companies and they mention that they have a cross-functional team working on this, it's always a green flag to me because it signals that this has moved beyond just a conversation around, oh let's do something to check the box on sustainability, to this is fundamentally part of a business decision, and the mandate is to everyone is working towards a stated goal or an objective rather than doing this sort of in silos. I guess to answer the question, to the degree that we can see ownership start consolidating, whether it's under the Chief Supply Chain Officer or the Chief Risk Officer or the Chief Compliance Officer, it doesn't really matter. But seeing a consolidation across teams, I think is, is critical and is honestly a good signal in the context of where a company is in terms of its maturity as well in its thinking. Okay. And what metrics or KPIs should companies focus on to measure the success of their initiatives and ensure continuous improvement? Yeah, I think this is a great one. I mean, it, it varies quite tremendously based on based on the risk or the domain that you're looking at. I feel like I'm biased on this, but if there was a North Star metric, it would really be, am I improving the, or am I future proofing my supply chain so that I am able to create a supply chain that is as disruption free as possible by investing in X, Y, and Z different initiatives or domains? However, if you're looking at reporting purely from the perspective of reporting on ESG as its own risk domain. It could range from, levels of transparency or traceability. How much of your supply chain do you have visibility into? Do you have insight into raw material suppliers or not? If it's in the context of a deforestation initiative that is specific to environmental risk, it could be how much or what percentage of your supply chain are you sourcing from regions that are at risk of deforestation or not? If you're looking at forced labor risk, quite the same in the context of, how much of your supply chain is, hopefully none of it is being sourced from a region that is experiencing forced labor. But there are varying levels of risk here as well. And I think that that last point is actually what makes it quite challenging to have any sort of a universal definition. I mean, the bare minimum is do not source from regions that are at risk of blank, whether it's forced labor or deforestation or flood risk or anything. But I think the, the thresholds that companies impose on themselves in terms of how much risk is too much risk and how what are we aspiring to can vary quite greatly. Sometimes just due to the geographies that they're based in, sometimes due to the industries that they're in. We had an oil company that was talking to us once, say that, Hey, my, my entire business is risky. There's nothing about the oil business that is, that is not at risk. It's really a matter of kind of understanding your threshold and your appetite and building a risk framework or a reporting framework that's based on that. Okay, left field question, if you could have any person or character, alive or dead, or fictional. As a champion for supply chain sustainability, who would it be and why? Oh my goodness. I love this question. I think as a trade nerd, I would probably pick someone like, I don't know, like Marco Polo, someone who is, who is really sort of invested in traveling the world and understanding the silk root in, in that context specifically. There's a great book actually that I read recently about the silk route and the origins of global trade, and I think it is quite fascinating. What I particularly, I think appreciate about him is his observation of global trade and how advanced it was in East Asia when he was visiting as compared to what he was seeing in, in Italy or in medieval Europe, I guess at the time. But just having, perspective in terms of understanding what supply chain looks like beyond your little universe and, and knowing that these supply chains have people at the end of them that you're trading with, and can have like an actual impact on the lives of those people and could be completely on the other side of the world. That's probably who I'd pick, but I'll have to think about this a little bit more. Nice. Okay, cool. We're coming towards the end of the podcast now Rhea, is there any question that I did not ask that you wish I did, or any aspect of this we haven't touched on that you think it's important for people to think about? Yeah, I think the only thing that I would add is this is something I say to students of mine that I I sometimes teach at the School of Visual Arts in New York which is the design degree that I did previously. I do a class on, data visualisation and supply chains, and frequently my students, and I've heard this from other folks as well, is there is an impression that the world of supply chains is really doom and gloom. There's a lot of talk about forced labor and deforestation and wildfires and, you know, the world is blowing up when it comes to global supply chains. And despite all of that, I think that I am actually quite optimistic about where we are today, specifically when it comes to supply chains. I have seen a lot of companies take really, really concrete steps towards moving the needle in the right direction, which has been tremendously encouraging. And of course it's a slow process and these are sometimes massive ships that you're trying to turn around and, and this process takes time. But that being said, I think we are at a point in the, in time where companies are paying attention to this. This is no longer a fringe conversation, and they are really actively investing in, in sustainability initiatives, means signals to me that the needle is moving in the right direction. And I would say that what brings me to work every day really in this context is what can I do as a software provider, as a designer of software to make this process easier for companies? How can I enable them to, collect the information that they need to gain the insights that they need to ultimately make the decisions that they need to, which can have a real and profound impact upstream in their supply chains? And it gives me great pleasure to see companies who are committed to this, who want to do the right thing and who are trying to do the right thing. And so I think I'm extremely optimistic about the future of supply chains and where this is headed. And I, and despite all of the gloom and doom I think it's a really exciting time for global supply chains, and for sustainable supply chain specifically. Fantastic. Great. Rhea, if people who would like to know more about yourself or any of the. Things we discussed in the podcast today, where would you have me direct them? I think I'm most reachable on LinkedIn. I'm quite active there. If you have a question, I would love to hear from you. As, as I said before, I'm quite a nerd. I, I love to geek out about trade and, and supply chain, so happy to chat with anyone that's interested in, in this industry and learning more. Superb. Great. Rhea that's been fascinating. Thanks a million for coming to the podcast today. Of course. Thank you so much for having me. Okay. Thank you all for tuning into this episode of the Sustainable Supply Chain Podcast with me, Tom Raftery. Each week, thousands of supply chain professionals listen to this show. If you or your organization want to connect with this dedicated audience, consider becoming a sponsor. You can opt for exclusive episode branding where you choose the guests or a personalized 30 second ad roll. It's a unique opportunity to reach industry experts and influencers. For more details, hit me up on Twitter or LinkedIn, or drop me an email to tomraftery at outlook. com. Together, let's shape the future of sustainable supply chains. Thanks. Catch you all next time.