SGS India

Supply chains today are under greater scrutiny than ever before. Global brands, retailers, and consumers increasingly want assurance that products are manufactured responsibly, with respect for workers' rights, workplace safety, and ethical business practices.

For manufacturers, this shift presents both challenges and opportunities. Meeting buyer expectations now extends beyond quality, pricing, and delivery timelines. Organizations are also expected to demonstrate responsible sourcing practices throughout their supply chains. However, many manufacturers struggle with fragmented supplier networks, inconsistent compliance standards, and limited on-the-ground visibility.

This growing focus on social responsibility is one of the key reasons many manufacturers are turning to BSCI audits to strengthen supply chain transparency and support sustainable business practices.

Why Ethical Supply Chains Matter More Than Ever

Today's buyers are paying closer attention to how products are made. Concerns around labor conditions, workplace safety, discrimination, fair compensation, and employee welfare have become central to sourcing decisions across many industries. In practice, managing these expectations across multiple geographies with diverse regulatory environments and supplier tiers can be highly complex.

A single compliance issue within the supply chain can damage buyer confidence, create reputational risks, and disrupt valuable business relationships. As a result, manufacturers are facing increasing pressure to provide evidence that responsible practices are embedded within their operations.

Organizations that proactively address these expectations are often better positioned to strengthen customer trust and maintain long-term commercial relationships.

Responding to Growing Buyer Expectations

Many international brands and retailers have established supplier codes of conduct and social compliance requirements as part of their sourcing programs. 

Before entering or expanding supplier relationships, buyers frequently assess whether manufacturers can demonstrate responsible workplace practices. Many organizations find it challenging to align internal processes with diverse buyer codes of conduct, especially when requirements differ across markets.

Businesses that successfully implement structured social compliance programs are better positioned to navigate supplier assessments, onboarding processes, and ongoing compliance reviews.

Beyond satisfying buyer requirements, ethical supply chain practices can contribute to improved operational stability, stronger workforce engagement, and reduced business risk. This helps manufacturers create a more resilient foundation for long-term growth.

Creating Greater Transparency Across Operations

One of the biggest challenges organizations face is maintaining visibility across complex supply chains. As operations expand, monitoring workplace practices and ensuring consistent compliance becomes increasingly difficult.

Structured social compliance assessments help organizations identify areas for improvement, strengthen accountability, and improve oversight of workplace practices. This often leads to better management of labor-related risks and greater consistency across operations.

For many manufacturers, enhanced transparency also supports stronger communication with customers, investors, and other stakeholders who expect greater visibility into responsible business practices. At the same time, evolving regulations, ESG disclosures, and investor scrutiny are increasing the pressure on organizations to demonstrate measurable progress.

Supporting Sustainability Through Responsible Business Practices

Sustainability is no longer limited to environmental performance. Increasingly, organizations are expected to demonstrate how they support workers, manage social risks, and contribute to responsible business operations.

Strong social compliance practices help manufacturers build a culture of accountability and continuous improvement. Organizations that prioritize worker welfare, workplace safety, and ethical conduct are often better positioned to support long-term sustainability objectives while strengthening stakeholder confidence.

As sustainability expectations continue to evolve, responsible supply chain management is becoming an important component of business resilience and competitive differentiation.

Building Long-Term Business Confidence

Ethical and sustainable supply chains are increasingly influencing purchasing decisions, supplier evaluations, and corporate reputation. Organizations that invest in responsible sourcing practices are often better prepared to meet changing market expectations and strengthen relationships with global buyers.

What was once viewed primarily as a compliance exercise is now emerging as a strategic business priority that supports growth, trust, and long-term success.

Supporting Social Compliance and Supply Chain Improvement

Organizations seeking to strengthen ethical sourcing practices often rely on structured assessments and independent evaluations to identify gaps, improve accountability, and drive continuous improvement across their supply chains. 

Independent assurance providers can play a role in supporting these efforts by bringing standardized methodologies, global best practices, and objective insights. 

Environmental management is no longer just about compliance. It is a business function that can affect customer confidence, regulatory compliance, and the resilience of the supply chain. With changing expectations, standards change as well.

The release of ISO 14001:2026 represents the next stage in this process. The standard was released on April 15, 2026, and includes a three-year transition period, alongside the traditional PDCA methodology.

EMS certification in India now expects environmental systems to clearly address climate, resource use, and governance alongside traditional compliance and pollution‑control requirements.

What are the Sources of Business Risks

The first step is to understand the effects on your business.

Already having an ISO 14001:2015 certification doesn’t always mean that your business is going to be in line with the requirements set by the new standard. When your organization gets audited, it is likely that the revised standards will be used.

Certification bodies will be busy with accreditation processes and training auditors to prepare them for the new requirements. The more organizations get into planning the transition, the more likely it is that the demand for audit services will rise.

By planning early, your business will be able to coordinate transition efforts with the audit schedule.

Understand the Requirements of ISO 14001:2026

Following this, it is important to know the latest changes.

The updated standard maintains the same environmental management principles that were stated previously. However, more focus has been placed on how risks to the environment are being assessed and evidenced.

Climate aspects which have been introduced in the 2024 amendment now feature more prominently in the context and planning clauses along with resource availability and ecosystem conditions. It should be possible to show how these aspects impact environmental objectives, plans, and risk management.

Transitioning to the ISO Harmonized Structure makes it much easier to integrate ISO 14001 with ISO 9001 and ISO 45001. Guidance provided in Annex A makes it clear what kind of evidence will be evaluated by certification bodies in the audit process.

This makes it easier to understand what is expected from organizations.

Use the Transition Period Strategically

Even though the transition period will span three years, it must be seen as an implementation period and not as an additional waiting period.

The certification bodies will have to finish their accreditation process, train the auditors, and manage the rising requirement for transition audits. This must be done before companies can finish their certification process according to the new standard. Further, the audit schedules might get tighter as deadlines draw close.

In India, there is increased focus on the environmental performance of the organizations via enforcement of Extended Producer Responsibility and Registered Environment Auditor.

Although both of these regulations are independent of the ISO certification program, it serves as a good reminder that having an up-to-date environmental management system is important.

How to Close the Gap Before Audits

Once the requirements have been clarified, organizations can start preparing their management systems for the assessments.

A structured gap assessment offers a tangible starting point through comparison of existing contextual analysis, environmental threats and opportunities, and environmental goals against the new standard. The internal audit process should ensure that there is an explicit recognition of climate and resource factors, while the management review process should ensure that these factors still feature in decision-making.

Organizations that manage CPCB/SPCB reporting have at their disposal information which is useful in helping their EMS improve without having to document any new things.

The idea here is to improve the evidence in the existing system and not the environmental management system itself.

A Practical Example

Take a medium-sized specialty chemical company based in Gujarat, manufacturing for both domestic companies and exports. Before the recertification process in 2027, the firm starts by carrying out an evaluation of its EMS according to the standards of the new ISO 14001 certification in India.

The assessment reveals that the issue of climate change and resource scarcity is covered in the compliance documentation but not adequately captured in the EMS.

Through integration of existing compliance documentation in the EMS, and through management review of risks, the firm ensures the strength of certification documentation without implementing any new procedure.

Getting Ready for the Next Step

The adoption of a structured process will lead to a more predictable transition process. Once an organization is aware of its business risks and has reviewed the new requirements, it will be able to use the transition period and fill any gaps.

SGS India assists manufacturers and exporters with ISO 14001 certification in India, readiness assessment, gap analysis, and transition planning based on ISO 14001:2026.

Artificial Intelligence is rapidly becoming part of everyday business operations. Banks use AI to assess creditworthiness, while retailers use it to predict customer behaviour. Healthcare providers also rely on AI-powered tools that support diagnosis and treatment decisions.

But as AI becomes more powerful, it also raises important questions.

How do organizations ensure that AI decisions are fair?

Who is accountable when an AI system makes a mistake?

How can businesses demonstrate that AI is being used responsibly and securely?

Think of AI governance as traffic rules for artificial intelligence. Roads can function without traffic rules, but doing so significantly increases the risk of confusion, accidents, and unsafe behaviour. Similarly, organizations need clear rules and oversight that ensure AI systems operate in a controlled and responsible manner. This is where ISO 42001 certification comes in.

Why AI Governance Matters Today

Many organizations have adopted AI faster than they have developed governance frameworks around it. While AI can improve efficiency and support better decision-making, it can also create risks related to bias, transparency, privacy, security, and accountability.

Customers, regulators, investors, and business partners increasingly seek assurance that AI systems are being managed responsibly. They expect organizations to monitor AI performance, address unintended outcomes, and maintain appropriate human oversight so that AI remains trustworthy and aligned with business objectives. As a result, AI governance is no longer just a technology discussion. It is becoming a business priority.

ISO 42001 – Crucial in the Current Era of AI

ISO 42001 certification is the world's first international standard designed specifically for AI governance. It provides organizations with a structured framework for establishing, implementing, and continually improving an AI management system.

Rather than focusing only on technology, the standard examines how AI is governed across the organization. It helps businesses identify risks, define responsibilities, establish oversight mechanisms, and ensure AI systems are used safely and responsibly through every stage of deployment. In simple terms, it acts as a rulebook for managing AI throughout its lifecycle.

How Organizations Implement an AI Management System

Building an effective AI management system requires more than drafting policies. Organizations must first understand how AI is used across their operations so that they can identify the risks associated with those applications. This includes evaluating potential impacts on customers, employees, business operations, and regulatory obligations.

The framework encourages organizations to establish governance structures that maintain human oversight and define escalation procedures whenever issues arise. Regular monitoring ensures that AI systems continue performing as intended while reducing the likelihood of unintended consequences over time.

Many organizations also introduce safe AI usage policies, employee awareness programs, and internal review mechanisms that strengthen accountability and support responsible AI adoption across the business.

A Practical Example

Consider a healthcare technology company that uses AI to assist doctors in prioritizing patient cases and recommending treatment pathways. As the company expanded into new markets, healthcare providers and regulators began asking how the AI system made decisions, how potential biases were monitored, and what controls were in place when unexpected outcomes occurred.

To address these concerns, the organization implemented an AI management system aligned with ISO 42001 certification. This included establishing human oversight procedures, documenting decision-making processes, conducting impact assessments, and creating clear escalation mechanisms that could be activated whenever AI-related issues emerged.

As a result, the company was able to demonstrate greater transparency, strengthen stakeholder confidence, and provide customers and healthcare partners with stronger assurance that AI was being managed through a structured and accountable framework. These improvements not only increased trust in the technology but also helped the organization strengthen its position within a highly regulated and competitive market.

Final Thoughts

Artificial Intelligence is creating new opportunities across industries, but it also introduces new responsibilities. Organizations need more than innovative AI solutions because they also need governance frameworks that ensure those solutions are used responsibly.

ISO 42001 certification provides a structured approach to managing AI-related risks while promoting transparency, accountability, and trust. As AI adoption continues to accelerate, organizations that establish strong governance practices will be better positioned to meet stakeholder expectations and build confidence in their AI systems.