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Technology giant Sony Europe is committed to being a responsible corporate citizen and protecting its brand, employees and customers. But over the years, legislation in areas such as financial crime and money laundering, data protection, and sustainability has become increasingly stringent.
A breach of these rules can cost businesses up to the equivalent amount of their turnover for the year. That’s billions of dollars for Sony – a risk not worth taking and worth pre-empting.
So the Procurement team took action to review their due diligence process and improve its efficiency and effectiveness to make sure they wouldn’t get caught out.
How did they do it?
Using third party Refinitiv’s World-Check tool, Sony designed and implemented a new process that would ensure all suppliers are free of risk before signing an agreement with them.
First, suppliers are reviewed against a list of red flags, including:
- Sanctions listings
- Regulatory and law enforcement action
- Politically exposed people
- Links to criminal organisations
If any flags are raised, they’re assessed on severity and the how necessary it is for Sony to partner with the supplier before a decision about what to do next is made. Ultimately, the team need to review the supplier again more closely. If the issues are then resolved, the contract is signed. If not, the supplier is removed from the system.
Is it helpful?
Yes. The new process identified two supplier relationships that needed terminating – so the team now want to automate it to run risk assessment reports on its global supply bases on an ongoing basis. This will allow them to respond in real-time as rules and regulations continue to change, helping to keep the business name protected.