Supply Chains Navigate Sustainability Investment Challenges
Capgemini’s latest research highlights a steady focus on sustainability in supply chains, despite slowing investment growth.
Businesses are navigating complex challenges to balance regulatory demands, technological innovation and long-term goals.
To achieve net-zero carbon emissions by 2050, the World Economic Forum estimates that a colossal US$13.5tn is required. Against this backdrop, Capgemini reports that more than three in five global business leaders plan to increase sustainability investments in 2025.
However, this growth rate is expected to dip slightly, with projections slowing from 12.2% in 2024 to 10.5% in 2025.
Dr James Robey, Capgemini’s Global Head of Environmental Sustainability, remains optimistic.
He explains: “I’m encouraged by these findings, which show that sustainability continues to remain a priority for organisations, even in challenging times.”
He also emphasises that critical areas include climate technology, water conservation and biodiversity restoration. These priorities extend to advanced tools, such as AI-driven supply chains, which promise greater resilience and efficiency.
“This isn’t just about meeting regulations; it’s about unlocking long-term value and fostering industries that can thrive in an uncertain, climate-impacted world," James adds. "While these trends show continued growth, they also highlight the importance of turning ambition into action."
Supply chain investment
Capgemini identifies supply chain sustainability as a top area for growth, with companies prioritising investments to enhance cost efficiencies and meet new regulations.
This is particularly evident in industries governed by strict rules, such as the EU’s Battery Materials Traceability regulation, which demands transparency across supply chains.
David Carlin, the former Head of Risk for the United Nations Environment Programme Finance Initiative, outlines the urgency of these challenges: “The core of this challenge lies in the supply of key minerals like lithium, nickel, cobalt and graphite—all critical for battery production.
"Without substantial investment in mining, refining and recycling of these minerals, we risk a bottleneck that could derail our progress.”
Despite these hurdles, Capgemini reports that only 23% of executives believe the costs of sustainability initiatives outweigh the benefits. For the majority, the long-term value of investing in sustainable practices and technologies is clear.
Battery technology is emerging as the leading priority within climate tech, followed by solar energy, hydrogen and hydropower.
While wind and nuclear energy remain important, they rank lower on the list, with biofuels, geothermal energy and carbon capture utilisation and storage (CCUS) taking the bottom spots.
By 2025, Capgemini expects investments in climate tech, sustainable product design, biodiversity and water conservation to remain prominent.
However, not all organisations plan to increase funding. Approximately 15% intend to decrease investment levels, while 20–30% will maintain their current approach.
Five recommendations for sustainable growth
Based on its findings, Capgemini offers five strategic recommendations for business leaders aiming to maximise sustainability investments:
- Harness sustainability as a value driver: By embedding sustainability into all operations, companies can align with evolving regulatory standards and consumer expectations, while reaping financial and reputational benefits.
- Prepare for regulatory and geopolitical uncertainties: Proactively adapting to changing conditions ensures organisations stay ahead of disruptions.
- Build resilient, next-generation supply chains: Diversification, sustainability and technological integration are critical to mitigating risks and boosting efficiency.
- Foster strong partnerships: Collaboration with industry peers and external partners helps secure vital raw materials and strengthens value chains.
- Accelerate digital transformation: Investing in AI, cloud computing and advanced manufacturing technologies enables companies to bridge skills gaps and stay competitive.
Capgemini emphasises that these actions are not only essential for compliance but also present opportunities to drive innovation and unlock new market potential.
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.
