{{r.fundCode}} {{r.fundName}} {{r.series}} {{r.assetClass}}

Welcome to the new RBC iShares digital experience.

Find all things ETFs here: investment strategies, products, insights and more.

.hero-subtitle{ width: 80%; } .hero-energy-lines { width: 70%; right: -10; bottom: -15; } @media (max-width: 575.98px) { .hero-energy-lines { background-size: 200% auto; width: 100%; } }

Hello, my name is Maia Becker and I’m the Director of Corporate Governance and Responsible Investment at RBC Global Asset Management. Today I’ll be talking about supply chain risk management in the time of COVID-19.

The food we eat, the goods we buy, and the services we use on a daily basis all depend upon effective global supply chains.

With COVID-19, this has brought disruption to economies, financial markets, communities, travel, trade, and our communities. It has also caused unprecedented disruption to our global supply chains. These impacts are being felt in almost every region in the world.

In recent years, companies have put in place a range of strategies to reduce costs and improve the efficiency of their supply chain – whether that be outsourcing, or just-in-time delivery, or offshoring. While that’s produced cost-savings and has improved efficiency in some supply chains, what we’re seeing now is that it has also resulted in reducing the resilience of our supply chains.

Since COVID-19 was first identified in December of 2019, factories and transportation hubs have closed, new safety protocols have been in place, the movement of employees has been restricted, and consumer needs and consumer demands have changed. No regions or industries have been immune to these effects.

This has resulted in supply shocks and trade restrictions, which has affected the ability of some companies to both produce and supply their goods and services. For example, active pharmaceutical ingredients – approximately 80% of them comes from China. When China halted their manufacturing, this caused supply chain disruptions, which resulted – in some regions – in potential shortages of certain drugs.

COVID-19 has also stretched the capacity of some companies, as they have seen both an increase in demand as well as a decrease in supply for some goods. As inventories have been depleted, they have also seen strain on their production capacity. Grocery stores, for example, have had inventory shortages of certain foods and consumer goods as they have seen a surge in demand of up to 500% for certain products. And while they have reduced their hours in order to try to allow time for re-stocking, and food producers have extended their hours or limited their product lines, there is only so much capacity within the system.

A company’s ability to produce, to distribute and to supply products can also be impacted by supply chain risks related to worker health and safety– such as a lack of personal protective equipment, absence of sick pay, or in some regions and for some workers, an inability to access health care.

So while the attention and focus right now is (rightfully) on dealing and managing the current crisis, COVID-19 has exposed vulnerabilities in our global supply chains.

Once the current crisis has ended, many more companies will be looking to how to address supply chain risk management, perhaps in a different way. That may be by expanding or enhancing their digitization of processes, doing supply chain mapping as well as looking at diversifying their supplier base. They may also start to scrutinize their contracts and their liabilities in more detail, and start to look at their suppliers’ workforce management activities.

At RBC Global Asset Management every investment team evaluates Environmental, Social and Governance factors as part of their decision-making process, and that includes supply chain risk management. COVID-19 has demonstrated more than ever before that the quality and effectiveness of supply chain risk management is important. Thank you.

Disclosure

This video is produced by RBC Global Asset Management (RBC GAM) for informational purposes only and may not be reproduced, distributed, or published without the written consent of RBC GAM. This video does not constitute an offer or a solicitation to buy or to sell any security, product or service in any jurisdiction. This video is not available for distribution to people in jurisdictions where such distribution would be prohibited.



RBC GAM is the asset management division of Royal Bank of Canada (RBC) which includes RBC Global Asset Management Inc. (RBC GAM Inc.), RBC Global Asset Management (U.S.) Inc., RBC Global Asset Management (UK) Limited, RBC Global Asset Management (Asia) Limited, and BlueBay Asset Management LLP, which are separate, but affiliated subsidiaries of RBC.



In Canada, this video is provided by RBC GAM Inc. (including PH&N institutional) which is regulated by each provincial and territorial securities commission with which it is registered. In the United States, this video is produced by RBC Global Asset Management (U.S.) Inc., a federally registered investment advisor. In Europe, this video is provided by RBC Global Asset Management (UK) Limited, which is authorised and regulated by the UK Financial Conduct Authority. In Asia, this video is provided by RBC Global Asset Management (Asia) Limited to professional, institutional investors and wholesale clients only and not to the retail public. RBC Global Asset Management (Asia) Limited is registered with the securities and futures commission (SFC) in Hong Kong.



This video has not been reviewed by, and is not registered with any securities or other regulatory authority, and may, where appropriate, be distributed by the above-listed entities in their respective jurisdictions. Additional information about RBC GAM may be found at www.rbcgam.com.



This video is not intended to provide legal, accounting, tax, investment, financial or other advice and such information should not be relied upon for providing such advice. RBC GAM takes reasonable steps to provide up-to-date, accurate and reliable information, and believes the information to be so when produced. RBC GAM reserves the right at any time and without notice to change, amend or cease the information.



Information obtained from third parties is believed to be reliable, but no representation or warranty, express or implied, is made by RBC GAM, its affiliates or any other person as to its accuracy, completeness or correctness. RBC GAM and its affiliates assume no responsibility for any errors or omissions.



Some of the statements contained in this video may be considered forward-looking statements which provide current expectations or forecasts of future results or events. Forward-looking statements are not guarantees of future performance or events and involve risks and uncertainties. Do not place undue reliance on these statements because actual results or events to differ materially from those described in such forward-looking statements as a result of various factors. Before making any investment decisions, we encourage you to consider all relevant factors carefully.



®/TM Trademark(s) of Royal Bank of Canada. Used under licence. RBC Global Asset Management Inc., 2020