Supply Chain Risks Surge: Sphera's 2025 Report

Supply chain disruptions remain a pressing challenge for businesses worldwide, with increased financial strain, escalating compliance pressures and growing environmental risks defining 2024.
According to Sphera's latest 2025 Supply Chain Risk Report, organisations are navigating a volatile landscape marked by economic instability, stricter regulatory requirements and quality challenges affecting product performance and supplier operations.
Sphera, a leader in Enterprise Sustainability Management (ESM), combines real-time AI monitoring of more than 15 billion global data points each month with insights from its risk research team to provide critical findings on the state of global supply chains.
Paul Marushka, CEO at Sphera, explains: “The findings from this year’s report highlight the need for real-time insights, predictive analytics and data-driven strategies to ensure resilience.
"By addressing these risks proactively, companies can transform vulnerabilities into competitive advantages while navigating today’s complex landscape.”
Economic instability drives financial fragility
The financial health of supply chain partners took a significant hit in 2024, with early warning indicators of supplier financial strain rising by 11%.
Bankruptcy declarations surged by 48%, while force majeure declarations—used by suppliers to excuse their inability to fulfil contracts due to extraordinary events—increased by 61%.
These figures highlight the growing fragility of supply chain operations in the face of rising interest rates, slowing global economic growth and other macroeconomic pressures.
Such financial instability poses substantial risks to business continuity, requiring firms to adopt real-time monitoring and risk mitigation strategies. Without these measures, businesses risk operational breakdowns, particularly as supply chain disruptions continue to average 14.8 incidents annually per organisation.
Sustainability challenges deepen amid tightening regulations
The integration of ESG criteria into supply chain management accelerated in 2024.
Regulatory requirements and consumer expectations around ethical practices and sustainability continue to rise, placing additional pressure on organisations to maintain transparency.
Meanwhile, ESG-related risk indicators grew by 6%, with human rights issues—such as labour violations—seeing a sharp 29% increase.
Companies face heightened scrutiny of their labour practices, environmental compliance and governance standards, making robust supplier engagement essential.
Sustainability challenges are particularly pronounced in Europe, where tighter regulations have compelled businesses to meet more stringent environmental and social accountability benchmarks.
As regulatory compliance grows more complex, organisations must strengthen supplier relationships and adopt proactive risk management to address evolving global expectations.
Rising quality risks impact brand trust
Issues related to product quality surged by 22% in 2024, adding another layer of complexity for supply chain leaders. These risks included problems with hazardous materials, facilities and product recalls, which rose by 19%.
Supplier site relocations, often driven by cost pressures and market dynamics, were linked to 54% of these incidents, illustrating how changes in supplier operations can compromise quality and reliability.
Such challenges not only disrupt operations but also threaten reputational damage. To mitigate these risks, organisations must implement rigorous quality management systems and maintain close oversight of their suppliers.
The growing emphasis on quality highlights the critical importance of resilience planning in safeguarding both operational continuity and brand integrity.
Labour and natural disasters disrupt supply chains
Labour unrest and natural hazards were among the most significant sources of disruption in 2024.
While site-specific strikes decreased by 26%, large-scale labour actions—such as the Maritime Workers of Australia’s seaport strikes and rail worker protests in Canada—rose by 12%.
These national-level disputes caused widespread delays, with impacts extending across borders, as seen in Canadian strikes affecting supply chains in the US.
Meanwhile, natural disasters, exacerbated by climate change, also caused substantial disruptions. Flash floods alone rose by 60%, with Europe experiencing severe delays during summer 2024.
Together, these events underscore the interconnected nature of global supply chains and the critical need for adaptive logistics strategies to address both man-made and environmental risks.
The findings from Sphera’s report highlight the growing complexity of managing supply chains in an increasingly volatile world. From financial fragility and regulatory compliance to quality concerns and environmental risks, the challenges ahead demand proactive measures.
Companies must leverage real-time insights, predictive analytics and strong supplier relationships to build resilience and transform risks into opportunities.
Explore the latest edition of Supply Chain Digital and be part of the conversation at our global conference series, Procurement & Supply Chain LIVE.
Discover all our upcoming events and secure your tickets today.
Supply Chain Digital is a BizClik brand.
- WEF: Supply Chains at Heart of Cybersecurity ThreatsTechnology
- How will Trump Tariffs Affect Mexico, Canada & China?Supply Chain Risk Management
- Altana: What the Updated UFLPA List means for Supply ChainsSupply Chain Risk Management
- Senators Push for Stronger US Supply Chains with New BillSupply Chain Risk Management