LRQA: The Greatest Risks to Supply Chain Sustainability
A host of challenges seen throughout 2024 caused significant turbulence for businesses managing supply chain sustainability and ethical sourcing.
Rapid regulatory shifts, geopolitical instability and advances in data-driven decision-making have reshaped ESG strategies and are redefining leaders' attitudes towards risk mitigation.
As we head deeper into 2025, research from global assurance specialist LRQA indicates that human rights and environmental risks continue to rise, putting supply chain integrity under pressure. LRQA's latest report, Supply Chain Sustainability: Top Trends for 2025, outlines eight key trends based on data from EiQ, its end-to-end supply chain due diligence software which provides insights into emerging risks.
The findings suggest changes in global political landscapes will be the most significant factor influencing supply chain continuity and resilience over the coming months.
LRQA's eight supply chain sustainability trends
- A growing gap between ambition, expectation and preparedness
- Navigating a more complex regulatory agenda
- Drowning in data: A pressing need for quality and insight
- Supplier relations: from leverage to collaboration
- Ongoing risks in unassuming markets: Annual audits are insufficient
- Geopolitical shifts shape the ESG risk landscape
- Food safety and product integrity emphasise sustainability needs
- Investor interest will continue to change the game
Geopolitical shifts reshape global trade
One of the major themes of LRQA's report is the effect of shifting policies and administrations on global supply chains. In particular, the US' 2024 election outcome is set to impact trade regulations, supply chain risk strategies and corporate responsibility expectations.
The report predicts tighter immigration policies, pushback against ESG initiatives and increasing regulatory scrutiny on businesses.
These factors are set to have a direct impact on supply chain structures, requiring companies to reassess sourcing strategies and risk management frameworks.
The evolving landscape is likely to introduce new challenges for businesses trying to balance ethical sourcing with financial performance.
Regulatory complexity slows ESG progress
Another major challenge highlighted is the growing complexity of ESG regulations.
The LRQA report describes this as a “regulatory soup” made up of numerous reporting requirements and due diligence laws. As governments worldwide introduce stricter ESG regulations, businesses must navigate an increasingly fragmented compliance landscape.
Despite the rising number of ESG commitments, many businesses struggle to turn ambitions into action.
The report notes that short-term financial pressures often take precedence over long-term ESG resilience, creating a gap between corporate sustainability goals and real-world implementation. The misalignment leaves organisations exposed to reputational, financial and operational risks.
Data-driven strategies drive supply chain resilience
LRQA's report draws from its extensive experience working with more than 450 businesses across 100 countries. Its findings reinforce the need for businesses to integrate real-time data and advanced technologies into their supply chain strategies.
By leveraging supply chain intelligence, organisations can anticipate risks and build more resilient sourcing networks.
Kevin Franklin, Chief Product Officer at LRQA, emphasises the need for proactive risk management, stating: “While it could be argued that global supply chains have never faced such a complex web of connected challenges, business leaders are faced with a huge opportunity to overcome them by investing in data, advanced technologies and global expertise.
“Our goal in sharing these trends is to guide better data-driven decision-making and inform the design of more impactful supply chain sustainability and risk management programmes. Every responsible business will have its own unique needs, but by placing real-time data and ESG right at the heart of business strategy, leaders can turn the dial from reactive risk management to empowered and data-driven proactivity.”
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