Supply chain due diligence – sustainability and ESG trends for 2025

This article is an excerpt from our report ‘Navigating the future of sustainability and ESG’ which is available to download directly.

From geopolitical shifts and trade tensions to the adoption of AI and regulatory changes, the opportunities and challenges around supply chain management are expected to evolve in 2025, with increasing focus on ethical practices impacting human rights and the environment.

As consumers and regulators continue to demand accountability for the environmental and social impacts of the sourcing, production and supply of goods and services, supply chain sustainability and transparency will be a priority focus for businesses globally, across all sectors, in the months ahead.

Key focus areas for businesses in 2025 will be

• Increased reporting obligations: As corporate accountability over supply chain activity and social impacts intensifies, companies globally are subject to increased reporting obligations and new mandatory due diligence requirements. Failure to comply exposes a company to regulatory scrutiny and legal challenges.
  
  
• Fair labour practices and workers’ rights: Supply chain transparency is critical for monitoring, identifying and addressing untoward labour practices, human rights violations and fostering a diverse and inclusive workforce across business operations. In September 2024, UN Member States adopted a ‘Pact for the Future’, a landmark declaration that pledges a safer, peaceful and more sustainable world for future generations. The Pact covers a broad range of issues, from peace and security and sustainable development to climate change and human rights. Notably, it includes a commitment to abolish modern slavery and human trafficking to contribute to the UN’s Sustainable Development Goals Target 8.7 which seeks to end forced labour.
• Human rights compliant sourced products and services: Companies remain under pressure from a broad range of stakeholders, including governments, consumers, regulators and NGOs, to disclose information regarding the sourcing of raw materials across their supply chains. In an era where appetite for greenwashing claims remains high, supply chain traceability across the entire product lifecycle is paramount to ensure that products are made safely and in accordance with human rights. Companies are increasingly leveraging technologies, particularly blockchain, to trace products and verify compliance with human rights standards.

Read more about mandatory due diligence requirements, modern slavery laws, and practical considerations for businesses in our report.