Bain & Co: Why CEOs Are Rethinking Global Sourcing Strategy

Corporate sustainability strategies are entering a new phase, according to Bain & Company. After reaching peak prominence in 2021 to 2022, sustainability discussions among chief executives declined as implementation obstacles became more apparent.

The consultancy's data now indicates this downturn could be stabilising. Sustainability is regaining traction as a strategic consideration, particularly in areas tied to electric vehicle supply chains, Scope 3 emissions and critical materials procurement.

According to Bain & Company, the conversation is increasingly defined by operational challenges rather than aspirational goals. Supply chain decisions around battery materials and upstream supplier relationships are becoming central to how organisations approach decarbonisation.

"The energy transition ranks among the most critical challenges of our age," says Bain & Company.

From corporate statements to procurement action

Bain & Company analysed more than 35,000 statements from 150 chief executives across 2018, 2022 and 2024. The research identified what the firm describes as a widening "do-say gap" where leaders speak less about sustainability but continue implementation.

According to the analysis, chief executive commentary in 2018 focused primarily on compliance and societal benefit. By 2024, discussions had shifted toward business value and operational factors including costs, customers and capital investments.

The data suggests sustainability is being reframed as a business performance lens rather than a standalone objective. This could mean procurement and supply chain leaders are under increasing pressure to demonstrate commercial returns from sustainability initiatives.

Jean-Charles van den Branden, Senior Partner and Global Sustainability Practice Leader at Bain & Company, addressed this transition in the company's press release. "After the initial years of bold ambitions and target setting, CEOs took a reality check on their sustainability agenda last year," says Jean-Charles.

"Today, CEOs might speak less about sustainability, but what they lack in words, they make up in action, a phenomenon we call the 'do-say' gap."

According to Jean-Charles, the firm has identified profitable decarbonisation opportunities ready for implementation. "To succeed, companies need to accelerate what already works, anticipate disruptions and build robustness," he says.

The company's research indicates B2B buyers are increasingly sourcing from sustainable suppliers. Consumer sentiment data also suggests customers reward organisations that deliver innovative, affordable and sustainable products.

"Another interesting observation this year is companies' rising use of AI to deliver sustainable impact," says Jean-Charles. "Those that act sustainably do so because there are tangible returns."

Critical materials and Chinese refining capacity

Battery supply chains exemplify how sustainability strategies are evolving into industrial transformation challenges. China's scaling of battery production capacity, combined with declining costs and coordinated industrial policy, has accelerated electric vehicle adoption beyond earlier projections.

According to Bain & Company, two of China's key policy objectives are self-reliance and green development, partly to address air quality concerns. Beijing identified electric mobility as essential to these goals and promoted research and development investment through the Made in China 2025 mandate.

National manufacturers, including CATL and BYD, scaled operations in alignment with this policy framework. This expansion included securing access to critical raw material supply and refining capacity.

China now refines 70% of global battery-grade lithium and 90% of battery-grade graphite, according to Bain & Company's data. This concentration of upstream processing capacity means sustainability progress in electric vehicle adoption is tightly linked to supply chain control over critical materials.

Procurement decisions around lithium and graphite sourcing are becoming strategic considerations. Companies pursuing electric vehicle strategies face supply chain dependencies on Chinese refining infrastructure regardless of where final assembly occurs.

The competitive landscape for battery materials is defined by access to upstream inputs and manufacturing scale rather than end-use technology alone. This could mean organisations must evaluate supply chain resilience alongside sustainability targets when making electrification commitments.

Scope 3 targets lag operational delivery

Many organisations remain behind schedule on Scope 3 emissions targets, according to Bain & Company. These targets are heavily determined by supply chain emissions rather than direct operations.

This is particularly relevant in sectors connected to electrification and energy, where upstream suppliers are revising their own net-zero timelines. Bain & Company's analysis of energy executives shows a growing proportion now expect net zero to be reached later than previously anticipated.

This creates tension between supplier timelines and customer commitments. Procurement teams face the challenge of aligning supply chain decarbonisation with corporate targets when upstream partners are extending their own schedules.

Scope 3 emissions require coordination across entire supply networks. Companies cannot meet these targets through internal operations alone, making supplier engagement and procurement criteria essential to delivery.

Policy divergence and supply chain uncertainty

The broader sustainability environment is being shaped by diverging policy approaches across regions, according to Bain & Company. Some jurisdictions are reducing regulatory pressure while others are deploying industrial policy to accelerate transition-focused sectors and secure strategic advantages.

Battery technologies are approaching cost and scale inflexion points, particularly in electric vehicle markets where adoption has been influenced by falling costs and improved infrastructure. This creates supply chain opportunities and risks as organisations adjust procurement strategies to changing market conditions.

According to Bain & Company, companies are increasingly focused on managing uncertainty across supply chains while balancing ambition with execution capability. This could mean procurement decisions must account for regulatory divergence, technology cost trajectories and geopolitical supply chain risks simultaneously.

Supply chain leaders face the challenge of securing critical materials access, managing Scope 3 emissions and maintaining cost competitiveness in an environment where policy frameworks and supplier capabilities are shifting. The organisations that navigate these pressures could define competitive positioning in sustainability-linked sectors over the coming years.