Compliance, Stewardship and Risk Aversion: Procurement drivers in 2025

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Since the Covid-19 pandemic, a seemingly relentless series of geopolitical events have highlighted how fragile existing supply chains are. In 2024, international conflict, increasing regulatory pressure to source more ethically and the need to achieve cots-efficiencies put the system to the test.

With 2025 looking even more complex from a political and economic standpoint, it is likely that the strain on global trade will increase even further. This article looks at some of the main procurement drivers that will shape the global supply chain in 2025.

Rising Public Supply Chain Scrutiny

Increasing consumer awareness of products’ ecological footprint, worker treatment, safety, and equality, is driving greater regulatory scrutiny of supply chains for businesses far beyond retail; consumers want to know they are investing in ethical businesses, purchasing sustainable groceries and ethically sourced products, for example. Businesses are having to review their entire supply chain to ensure they are proactively assessing suppliers, ensuring adherence to ethical sourcing, anti-corruption measures, and environmental standards.

Regulatory Compliance

In line with this heightened awareness, there has been an increase in regulations designed to ensure that businesses run more sustainable and ethical operations and that they are transparent in reporting their efforts. One notable example of this is the US Uyghur Forced Labor Prevention Act (H.R. 6256) which sets stringent requirements for compliance for textile buyers.

On January 1st, 2024, the EU CSRD, requiring all large companies on the EU market to disclose information on what they see as the risks and opportunities arising from social and environmental issues, came into effect. Businesses must also define  the impact of their activities on people and the environment. Non-EU companies will also have to report if they generate over EUR 150 million on the EU market. As such, an estimated 10,000 non-EU companies are likely to be directly impacted by the directive, with nearly a third coming from the US.

Furthermore, the EU Directive on Corporate Sustainability Due Diligence (CSDDD) (Directive 2024/1760) entered into force on July 25th, 2024, with an aim to foster sustainable and responsible corporate behavior within company operations while also encompassing their global value chains. This means identifying potential human rights and environmental impacts in: their own activities, those of their subsidiaries, those of Tier 2 and Tier 3 suppliers. Tracking this level of detail will be a complex task requiring a new approach to procurement that collects and analyses a much wider range of data.

Moving forward, all businesses will need to ensure that they have the tools in place for reporting. These will include both accurate and transparent systems to measure, monitor and verify the emissions, as well as the human rights data that are being reported.

Tackling Scope 3 Emissions

Another area of rising concern for procurement departments will be tracking Scope 3 emissions. These are emissions not generated directly by activities from assets owned or controlled by the organization but from the broader supply chain.

At its heart is the double materiality approach which means businesses will need to be transparent in their assessment of both how sustainability issues impact their financial performance and activities, as well as how their operations impact the society and environment in which they operate.. As these are generated upstream and downstream in the supply chain reporting boundaries are significantly extended.

Risk Management

In addition to the increased environmental stewardship and ethical demands, both from consumers and regulators, businesses will need to navigate continuing supply chain disruptions caused by geopolitical tensions. Doing business in uncertain times requires that companies have  comprehensive supply chain risk management in place in order to act proactively rather than reactively.  Business also need to keep a close look on how potential new tariffs may impact their supply chain and be prepared to adjust accordingly to prevent significant business disruptions.

Emerging Markets to Diversify Supply

Emerging markets are standing out as an alternative to traditional suppliers, helping businesses  diversify and risk-proof the supply chain. Turning to these markets may help mitigate the impact of tariffs but also contribute to sustainability objectives, provided that they are chosen from regions with abundant renewable energy sources. 

AI Empowering the Supply Chain

As businesses are forced to handle and analyze more and more supply chain data to ensure their procurement is compliant and resilient to sudden changes, AI automation is standing out as a way to streamline processes and obtain accurate, timely data across their entire supply. Accessible, real-time information can help avoid bottlenecks for example, while the ability to process large volumes of data at speed will ensure accurate supplier vetting can be carried out.

Top Notch Cybersecurity

Increasing volumes of data and their transmission inevitably lead to heightened exposure to cyber threats. Protecting sensitive customer information and trade secrets is increasingly complex and the regulatory landscape continues to evolve demanding that businesses meet higher standards of protection for the market and consumers. Businesses will therefore need to invest in robust systems and governance frameworks that ensure comprehensive protection across their supply chain operations. 

Improving Supplier Relationships

Collaboration with suppliers is key to achieving many of the security, stewardship, cost and compliance objectives procurement leaders have for 2025. Strong partnerships make for more resilient supply chains and are nurtured by transparent and seamless communication. Technology can help ensure that transparency is not an onus by enabling the automatic sharing of certifications, updates, potential bottlenecks, planned inventory levels, or provisioning challenges.

Creating an environment where information is rapidly and easily shared is also conducive to innovation and can facilitate the ideation of new strategies such as identifying alternative shipping routes, sourcing new raw materials or components, and co-investing in technologies to enhance products. 

As businesses face the new supply chain challenges of 2025, they carry with them the lessons of 2024. One of these is the key role that technology can play in supporting them as they navigate large volumes of data in a rapidly changing environment. 


With extensive expertise in ESG maturity assessments, strategy development, non-financial reporting, regulatory frameworks (EU Taxonomy, CSRD, CBAM), and green bond advisory, Aleksandra Tanasković leads JAGGAER's sustainability efforts. Aleksandra is a GARP-certified Sustainability and Climate Risk professional, and her skills in data analytics, risk and management, and sustainability advisory make her a key player in driving ESG-focused transformation within organizations.

Environment + Energy Leader