Overview
This article explains how to check supplier data for the ESG risk analysis and document known legal violations in advance.
This is step 1 of 4. Continue with (2/4) Performing the risk analysis.
Note: Table views, Evaluation templates, supplier properties (e.g. ISIC code, prior knowledge) and score thresholds are configured per customer. The names and thresholds mentioned here describe Tacto's standard configuration – your configuration may differ.
Careful preparation of supplier data is the first step towards a successful risk analysis. You check your suppliers' master data – especially country and industry classification (ISIC code) – and adjust it if necessary. You also document known legal violations as a basis for remedial measures.
Prerequisites
The ESG module is set up for your organisation and you have permission to create Evaluations and edit suppliers.
How it works
1. Check the data
The "Overview" table view shows for each supplier: name, country, ISIC code, risk status, ESG progress, purchasing volume and category.
The ISIC code (United Nations International Standard Industrial Classification) assigns the supplier to an economic sector. It is assigned based on the supplier's category.
An abstract risk score is calculated automatically from the ISIC code and country.
Score ≥ 80: low risk, ESG progress is set to "Processing completed".
Score < 80: medium risk, < 60: high risk. Progress is then set to "In progress" because a concrete risk analysis is required.
First check the country and industry classification. If both are correct, document your prior knowledge in the next step.
1a. Change the country or ISIC code
1. Open the supplier profile: Find the supplier in the "Overview" table view and open its profile.
2. Create an Evaluation: Go to the Evaluations tab, click Create new Evaluation and select the template "ESG risk analysis – Mitigation factors & appropriateness".
3. Check the first section: It shows the country, ISIC code and the resulting abstract risk score.
4. Change the country: Click the country and select the correct one. If a supplier operates in two countries, choose the more representative one.
5. Change the ISIC code: Click the ISIC code and select the appropriate codes. You can select up to ten industries.
6. Automatic update: The abstract risk score is recalculated automatically based on the new data.
7. Conclude the Evaluation: Do not fill in the rest of the Evaluation; click Conclude Evaluation directly. In the standard configuration, the country and ISIC code are transferred to the supplier properties and the "Overview" table view shows the updated risk classification.
2. Enter prior knowledge
If you know of a legal violation by a supplier, document it before the risk analysis. Such cases require remedial measures.
1. Open the supplier profile: Open the profile of the supplier concerned.
2. Open the "ESG" view: In the supplier profile, switch to the "ESG" view and scroll to the "Prior knowledge" section.
3. Edit prior knowledge: Click Edit at the bottom right and fill in the fields:
First field: "Known legal violation"
Type of violation: select the appropriate type from the list
Comment: all relevant details and justifications. You will use this information later for remedial measures and documentation.
4. Save: Click Save.
5. Next steps: The supplier appears in the "Suspicious suppliers" table view with the risk status "Red flag". Now initiate the necessary remedial measures.