2024 marked a transformative year for ESG practices within global supply chains. From groundbreaking innovations in data and technological solutions to consequential regulatory changes, we witnessed a significant shift in how businesses approach sustainability and responsible sourcing. For the final edition of EiQ Insights for this year, we wanted to reflect on the key learnings of 2024 and preview exciting things to come in 2025.
Here are some of the key takeaways from 2024:
What kept sustainability and supply chain professionals up at night this year? Here are some of the top challenges we have identified in 2024 through our work with brands and retailers from across the globe:
- Supply chain visibility: Businesses still have a limited view of their suppliers. The depth and interconnectedness of supply chain operations creates challenges in visibility over suppliers beyond Tier 1. Businesses are still struggling to gain a complete view of this data, and this can often be where hidden risks are creating increasing vulnerabilities and challenges.
- Traceability: Poor visibility leads to traceability issues. Without clear tracking of product and material sources, companies face incomplete views of their risk exposure.
- System integration: Diverse systems and platforms used by different stakeholders can create data silos and communication gaps. Businesses with hundreds, or in many cases, thousands, of suppliers around the world with various systems create challenges for data consolidation and performance monitoring.
- Effective remediation: Some businesses may have a better view over their supply chain risks- but what's next? Effective remediation requires deeper insights and collaboration with factories. Many organisations face a gap between remediation efforts and actual supplier improvement.
- Ongoing human rights issues: Open any major news outlets or NGO’s websites and the reality is clear: forced labour, child labour and human rights violations are ever-present and putting businesses at risk for reputational implications.
- Regulatory shifts: Supply chain regulations are increasing, becoming more intricate and continuing to evolve in scope. In 2024, governments worldwide introduced new regulations aimed at enhancing ESG compliance. We expect these will continue to develop and spread, with regions in the East expected to follow suit. Businesses must integrate improved processes to set up for compliance.
How to prepare for 2025
Learning from these challenges is the key to optimising your responsible sourcing approach in 2025 – and we can teach you how.
To get ahead and position your responsible sourcing program optimally:
- Stay tuned and subscribe to be notified for registration for our Top Trends Webinar in January: gain exclusive insights and valuable perspectives on the most influential trends shaping businesses and their global supply chains in 2025. Join us for this highly anticipated discussion with expert and LRQA Chief Product Officer Kevin Franklin, who will outline the top trends businesses should anticipate for 2025 and how to improve your responsible sourcing strategy with learnings from the past year. You will receive sign-up details shortly, don't miss out on this opportunity!
- Introduce digital training to your employees, suppliers and vendors to align your entire value chain with ambitions and targets: https://lnkd.in/evSB7XQC
- Get in touch with our experts to get up to speed with due diligence regulations and how you can adjust your program for compliance: Contact LRQA
Key regulatory updates to wrap up the year
As regulations continue to evolve and have greater impact over global businesses and their responsible sourcing approaches, here are some key updates from the last two weeks:
- Canada to introduce mandatory due diligence legislation: The Canadian government announced plans to introduce a mandatory due diligence regulation (similar to the CSDDD) and will add an oversight agency to ensure compliance. The government also announced plans to strengthen its forced labour ban. Read the statement here. (page 157)
- Hong Kong to enforce mandatory sustainability reporting by 2028: The Hong Kong government announced plans to require all publicly accountable entities to adopt sustainability reporting aligned with ISSB standards, with full implementation by 2028. Read more.
- EU Forced Labour Regulation published in the Official Journal: The EU Forced Labour Regulation (EUFLR) has been published in the EU Official Journal and will start to apply as of 14 December 2027. Similar to the EUDR, product imports into and exports out of the EU will be checked by competent authorities to verify that human rights due diligence has been exercised, and products have not been made with forced labour. Read more.
Thank you for following our ESG updates through EiQ Insights this year. If you would like to hear more about specific topics, risks, opportunities, or regulations, drop us a note at eiq@lrqa.com and tell us what you’d like to see!
We wish you and your loved ones a safe and happy holiday season and look forward to continuing our work with you toward a more sustainable future in 2025.
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