If You Can’t Show Your Data, You Look Like the Risk

The Tragedy That Shaped an Industry

In April 2013, the Rana Plaza garment factory complex in Bangladesh collapsed, killing more than 1,100 workers and injuring thousands. The building housed multiple suppliers linked to global brands, and the reaction from business was swift:

• Major buyers publicly re-evaluated their supplier lists.
• Brands faced intense reputational, investor, and commercial pressure to tighten oversight.
• And it led to the creation of the International Accord to improve working conditions and monitoring across the sector.

The tragedy became a turning point for how supply chain risk was treated in global apparel.

Markets Move Faster Than Regulation

While research doesn’t typically list individual company decisions, it confirms that this pattern happens again and again across industries:

When suppliers experience environmental or social incidents, buyers change their sourcing behaviour. For example, ESG Shocks in Global Supply Chains showed that “on average, U.S. companies cut imports from affected suppliers by around 31.8%.”

That isn’t a small adjustment, and it has dramatic consequences:

• Capital markets are already influencing supplier risk management long before regulators step in.
• Companies without data-driven visibility pay a price when incidents happen.

It’s already clear that pressure doesn’t just come from regulation; it comes from markets reacting fast to risk.

Risk Management is Data Management

As large companies respond quickly to incidents, responsibility is pushed throughout the supply chain, directly to SMEs. What increasingly determines who stays trusted and who gets replaced is simple: data visibility.

In other words, who can provide reliable ESG data?

Real risk management now comes down to data collaboration done right:

• Privacy-preserving data linking that gives SMEs supply chain visibility without sharing sensitive raw data
• Connecting signals across partners instead of collecting isolated reports
• Staying GDPR-aligned while improving risk detection and decision-making
• Shared infrastructure that gives smaller companies “big-company” insight
• Strong data quality, consent, and basic analytics as core business capabilities

When data is structured and connected, risks surface earlier, which is when they are cheaper and easier to fix.

Due Diligence is About Preventing Disruption

Seen in this light, due diligence isn’t about avoiding bad suppliers after something goes wrong, it’s about building continuous, collaborative visibility so that:

• Risks are spotted early
• Suppliers can improve before crises occur
• Costly last-minute switching is avoided

Compliance may trigger action once, but smart data foundations are what actually make supply chains resilient.

“CSDDD Doesn’t Apply To Me”

What this research confirms is exactly what CSDDD is designed to push earlier and more systematically:

Continuous visibility into supply chain risk, before incidents happen.

In particular, with all the recent changes to regulations, many companies (especially SMEs) might think, “We’re exempt,” or, “it’s only for large firms.”

But large companies under CSDDD will push due diligence expectations down their value chains quickly, and when a risk appears, the research shows:

• Supplier switching is expensive
• Disruptions hit margins
• Reputational pressure accelerates decisions

Companies without structured data and visibility will be the first to be dropped.

Rana Plaza: Risk Impossible to Ignore

The Rana Plaza collapse changed an industry because the cost of not seeing risk became impossible to ignore, but tragedies shouldn’t be what finally forces better oversight.

Today, we have the tools to share responsibility across value chains, connect the right data, and surface risks before people are harmed and businesses are disrupted.

This means we can shift from reacting to disasters to preventing them through visibility and collaboration. 

The Market Has Already Decided

Proactive risk management is becoming the default. Markets are already enforcing supply chain responsibility, and CSDDD is simply formalising what’s already happening.

The companies that treat due diligence as a data and collaboration capability will:

• Spot issues earlier
• Protect relationships longer
• Avoid costly disruption
• Stay competitive even when not legally in scope

The rest will be one incident away from being replaced.