What is the role of a supplier risk assessment?

• A. It identifies supplier vulnerabilities to human rights, labor, and environmental issues.
• B. It sets supplier pricing and contract terms.
• C. It designs marketing campaigns for suppliers.
• D. It approves supplier advertisements.

Answer: (A)

Understanding supplier risk assessment means evaluating the supply network to spot where things could go wrong, especially around people and the planet. It focuses on identifying vulnerabilities in suppliers related to human rights, labor practices, and environmental impact so you can address them before they become problems. This helps ensure compliance with laws and standards, protect the company’s reputation, maintain continuity of supply, and support responsible sourcing. Data might come from questionnaires, audits, certifications, and performance indicators, which are used to prioritize risks and plan remediation. The other options describe activities like negotiating pricing and terms or creating marketing content, which are not the focus of the risk assessment.