Most corporations’ impact on planet and people takes place within their extended supply chain. Yet too often, companies have limited oversight over the composition of the network of suppliers contributing to the creation of their products and thus lack the ability to understand and manage the environmental and social risks associated with this production. 

It is for this reason that the Working Capital Fund is pleased to announce our recent investment in Prewave.  Prewave is an Austria-based enterprise SaaS supply chain management platform that monitors news and social media data in over 50 languages and uses AI to predict and monitor supply chain risks in real-time. The platform marries classic supply chain mapping with risk assessment functionalities – mapping the entire supply chain down to the raw material level and then tracking sustainability risks along the chain in categories including labor and political unrest, financial and legal stress, accidents and disasters, CSR incidents, and cyber risk.

 

A key part of the Working Capital Fund’s investment thesis is that traceability and transparency are preconditions for scaled and positive change at lower-tier production locations where labor conditions are risky, and the vast majority of workers are highly vulnerable. The corporate sector has exerted significant effort to map and influence top-tier suppliers, to some effect. Little effort has been devoted to pushing change at lower tiers in the supply chain, in part because those tiers often remain invisible to multinational buyers.

 

But corporations are now being pushed to prioritize these lower tiers of the supply chain.  Recently many European countries – including France, Germany, and Norway – have put in place mandatory supply chain due diligence requirements dictating that corporations account for who contributes to the production of their product and what steps have been taken to ensure that production has taken place sustainably and ethically. Similar directives from the European Union are forthcoming.

 

Prewave is exceptionally well positioned to help corporations adhere with these new requirements and is poised to help meet growing corporate demand for compliance with this new regulation while simultaneously improving working conditions for millions of supply chain workers.  With improved supply chain visibility through multi-tier mapping in place and corresponding predictive supply chain risk assessment and scoring data made available, supply chain owners will be in a position to take steps to better manage and reduce labor risk as they gain access to more accurate and timely data across their entire supply chain.