Effective stakeholder communication: A guide for supply chain leaders

Tomas Novotny

Sustainability Expert

24 Apr 2025

About 6 mins

In today’s interconnected landscape, effective stakeholder communication is essential for building resilient, responsible supply chains. For procurement and supply chain professionals, the ability to communicate effectively with diverse stakeholders directly impacts your due diligence efforts, regulatory compliance, and ultimately, your business reputation.

Why stakeholder communication matters for supply chain due diligence

Communication with stakeholders isn’t just about keeping people informed—it directly impacts your due diligence effectiveness, supply chain transparency, and risk management in several critical ways:

Risk management

Sustainability challenges such as regulatory shifts, resource scarcity, and climate change present risks no single entity can manage alone. Effective communication helps identify and mitigate these risks through collaborative problem-solving.

Transparency and accountability

Open communication fosters transparency across the supply chain, enabling better understanding of product origins and impacts. It also creates accountability for sustainability performance, driving continuous improvement.

Building resilience

Collaborative supply chains withstand disruptions better. When stakeholders communicate effectively, they can create contingency plans, share resources, and support each other during crises.

Managing complexity

Supply chains involve numerous interdependent parties, each affecting others. Through structured communication, all stakeholders can work towards shared sustainability goals with clearer understanding of their impacts.

Based on Sedex data, nearly 30% of supply chain sites don’t know their end customers’ environmental requirements, highlighting the critical communication gaps that can undermine sustainability efforts

Common communication and engagement challenges

Our research with procurement and supply chain leaders revealed several persistent challenges that hinder effective due diligence:

Internal resistance: Slow implementation of responsible sourcing initiatives, limited resources, and fragmented approaches across departments
Supplier engagement: Limited visibility into site-level practices, challenges implementing consistent standards, and difficulty verifying supplier claims
Lack of transparency: Difficulty mapping ethical practices at site level, challenges gathering verifiable data, and increased compliance risks from new legislation

Without structured stakeholder communication, supply chain mapping becomes nearly impossible, site-level risks remain hidden, and compliance with regulations becomes increasingly challenging.

Sedex data indicates that only 45% of sites confirm having targets to minimise Scope 1 GHGs, while 29% of sites report they don’t have targets to manage climate-related risks and opportunities – demonstrating the urgent need for better communication of sustainability expectations.

Building an effective stakeholder communication strategy

1. Map your stakeholders

The first step in effective supply chain due diligence is identifying who needs to be informed and engaged:

Investors need data on risk exposure, financial materiality of due diligence, and verified site-level data demonstrating regulatory compliance.
Customers require transparency on ethical sourcing practices, environmental impacts, human rights protections, and evidence of robust due diligence processes.
Suppliers need clarity on due diligence requirements, data collection needs, performance expectations, and available support resources.
Employees require context on sustainability initiatives, clarity on their roles, and recognition for contributions to transparency efforts.
Regulators expect proactive engagement, detailed site-level documentation, timely disclosure of risks, and clear remediation plans.
NGOs value early engagement on potentially controversial issues, genuine dialogue, and collaborative problem-solving opportunities.

2. Develop a tailored communication approach

For each stakeholder group, consider:

Channel preferences: What communication methods work best? (Risk reports, compliance dashboards, verification documentation)
Information needs: What specific site-level data and risk insights matter most?
Communication frequency: How often should due diligence updates be provided?
Message framing: How should risk information be presented for maximum impact?

Communication examples by stakeholder group:

For investors: Quarterly due diligence dashboards, annual risk assessment reports, and evidence of site-level verification through recognised standards.

For customers: Transparent documentation of your due diligence process, evidence of verification at critical supply points, and regular updates on improvement initiatives.

For suppliers: Clear requirements documentation, training on self-assessments, and feedback loops with improvement support.

3. Build site-level transparency into your approach

Site-level transparency is the foundation of effective due diligence and stakeholder trust. When communicating about supply chain risks:

1. Acknowledge specific issues identified through your due diligence

2. Explain the context and complexity where it occurs

3. Outline your risk mitigation action plan

4. Establish clear metrics for measuring improvement

5. Commit to regular updates on verification and progress

4. Monitor and evaluate communication effectiveness

Set clear KPIs for your stakeholder communication strategy:

Supplier response rates to data requests
Completion rates of site-level risk assessments
Stakeholder understanding of your due diligence processes
Implementation of risk mitigation suggestions
Progress against jointly established goals

How technology enables better due diligence communication

Modern supply chain due diligence relies on digital platforms that enable site-level data collection, centralised risk mapping, standardised assessments, and multi-tier supply chain visibility.

Sedex’s platform facilitates comprehensive due diligence communication by helping you map, assess, identify and mitigate risks:

Risk assessment tools that identify supplier risks at site level
Self-assessment questionnaires that efficiently collect critical compliance data
Data-sharing capabilities that improve transparency across supply chain tiers
SMETA audits that provide credible third-party verification for high-risk areas
Reporting dashboards that create clear audit trails for regulators

With data on over 60,000 factories available on the Sedex Platform, organisations can gain unprecedented visibility into supply chain practices and risks

Putting it into practice: A three-step approach

For supply chain leaders looking to enhance stakeholder communication around due diligence:

1. Risk mapping and stakeholder assessment (Months 1-2)

Map your supply chain to identify key risk areas
Identify stakeholders impacted by these risk areas
Evaluate existing communication channels

2. Due diligence strategy development (Months 2-3)

Create tailored communication plans for key stakeholder groups
Establish baselines and improvement targets
Define verification methods for critical risk areas

3. Implementation and verification (Months 4+)

Deploy site-level data collection tools
Implement verification processes like SMETA audits
Measure communication effectiveness and refine approach

When mapping supply chain risks, particularly in manufacturing, be aware of the top issues identified through Sedex audits: health, safety and hygiene (dangerous or unhygienic working conditions), working hours (excessive working hours), water (water stress) and waste & pollution (land, air and water pollution).

Conclusion: Stakeholder communication as a competitive advantage

In an era of increasing regulatory scrutiny, effective stakeholder communication isn’t just about compliance—it’s a competitive advantage. Organisations that excel at communicating their due diligence efforts build stronger relationships, identify risks earlier, and mobilise collaborative solutions.

Sedex helps organisations simplify this process through our complete supply chain due diligence platform. Our solution helps you map, assess, identify and mitigate risks while providing the site-level transparency you need to reduce complexity, improve compliance and protect your reputation.

For organisations seeking additional support, our expert consulting team provides tailored guidance on stakeholder communication strategy development, risk assessment frameworks, and due diligence implementation. Whether you’re just beginning your due diligence journey or looking to enhance an existing programme, our expert consultants can help you develop effective, compliance-aligned communication approaches for all stakeholder groups.

Ready to transform your supply chain due diligence communication? Contact our team to learn how Sedex can help you future-proof your business with smarter supply chain due diligence.

Start Your Journey with Sedex!