How is Regulatory Pressure Revealing Visibility Gaps?

Around the world, supply chain leaders are investigating the resilience of their operations, driven by an increase in regulatory pressures.

Through this, there has been a greater drive for supply chain visibility in order to spot risks when they first arise.

Achilles, a leader in risk management, has released new research which explores major gaps across global supply chains

Supply chain turbulence

Supply chain operations in the last few years has been defined by constantly shifting regulations, trade wars, tariff concerns and climate risks. Businesses have been working to do more with less resources, changing strategies to prioritise resilience and agility rather than efficiency and reaction time. 

Now, businesses do not need to react to events, they need to proactively avoid it. This predictive nature comes with greater supply chain visibility – if leaders can see their suppliers' or partners' financial operations or risk assessments, they can avoid the impact entirely, either by changing partners or investing in protecting or uplifting them.

Visibility and transparency have become key features to ward off risk, coming from digital tools which automatically update at each operational shift. Rather than relying on high-risk manual tracking, digital tools provide full insights into visibility. 

However, as Achilles finds, major transparency gaps still remain – causing significant risk amid increasing regulatory scrutiny and rising operational disruption.

Achilles has worked to provide strong levels of transparency, carbon reduction and management across supply chains for more than 30 years. It has helped clients meet requirements and hit goals through high-quality reporting confidence. Its annual Global Supplier Risk and Sustainability Survey explores how organisations are adapting to geopolitical turbulence.

A lack of visibility

The report has taken responses from 2,805 organisations across construction, energy, manufacturing, transport and the public sector. The responses reveal that companies are prioritising sustainability and supplier governance, but there is a limited amount of visibility into extended supplier networks.

According to the report, only 6% of organisations stated they have full visibility into Tier-2 and Tier-3 suppliers, as nearly half of respondents report limited or no visibility beyond their immediate supplier base. This puts them at significant risk of third-party supplier concerns. Supply chains are becoming increasingly more complex with higher exposure to external pressures. 

Ongoing regulatory expansion, operational disruption and growing expectations around safety and environmental performances is impacting supply chains and preventing them from upholding transparency. This high level of complexity means that businesses cannot cover each base, but this lack of transparency results in poor trust between organisations and their supply base. This is revealed in the report, as only 18% of organisations state they are very confident in the accuracy of supplier-reported safety data.

“Supply chains today are more complex, more interconnected and more exposed to disruption than ever before. Organisations are facing growing pressure from regulators, investors and customers to demonstrate transparency and accountability across their supplier networks," explains Adam Whitfield, Head of Global Compliance and ESG at Achilles. 

“Our research shows that while many companies recognise the importance of supplier risk management, visibility across extended supply chains remains limited. This creates uncertainty precisely where organisations need the greatest oversight, particularly as sustainability expectations and regulatory requirements continue to expand.

“Building resilience now requires more than periodic supplier assessments. Organisations need structured supplier data, consistent governance and continuous monitoring to identify emerging risks early and intervene before problems escalate.”

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Co-located with Sustainability LIVE: The US Summit, the event unites senior decision-makers at a time when supply chains, sustainability and business performance are more interdependent than ever.
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Inconsistency across the border

Legislation and regulatory requirements are becoming a core feature of sustainability initiatives, ahead of customer expectations and carbon-reduction commitments. Inconsistency across national regulations has made it increasingly difficult to maintain cross-border consistent supplier requirements, according to 75% of respondents. 

Traceability is becoming a requirement for supply chain leaders, as is due diligence and consistent monitoring. Despite this, nearly 60% of organisations are concerned about the long-term availability of suppliers, as growing pressure across regulatory demands are impacting supplier capacity. 

There is a growing lack of confidence in respondents, as 64% of organisations report their suppliers being only moderately or mostly prepared to meet rising standards, with only 11% stating their suppliers are fully prepared.

To meet these concerns, there is a growing interest in the use of AI within supplier risk management, with many organisations utilising AI-driven insights to improve supplier monitoring and decision-making. Adoption, however, is still impacted by structural challenges like supplier data, legacy platforms and disconnected systems. 

Achilles has found that the companies with more maturity in their governance frameworks are better positioned to deploy risk monitoring technologies across their operations, but there is a significant gap between those who are ready and those who are still relying on fragmented processes. The need to modernise technology and develop deeper supplier transparency is great – otherwise organisations are putting themselves at risk.