What insights does the global risk landscape offer about supply chain vulnerabilities in the year ahead?
LRQA’s 2025 Supply Chain ESG Risk Outlook report reflects the critical risks impacting businesses and the human rights and environmental violations that are hindering brands and retailers from achieving ethical and responsible supply chains.
The latest report, derived from a dataset of more than 25,000 audits per year in LRQA’s supply chain intelligence platform - EiQ - debunks the assumption that Western production markets are inherently lower risk. In fact, this report shows that more than half of sourcing countries assessed by our EiQ supply chain intelligence software are labelled as high or extreme risk.
In today’s complex global landscape and in the era of Assurance 4.0, the new era of risk management, gaining visibility into the often-overlooked risks within supply chains is more crucial than ever. Due diligence expectations have evolved, and businesses developing their responsible sourcing approaches to match or exceed this evolution is overdue.
Key insights from the report
The report uncovers the emerging risk trends that are reshaping the supply chain landscape. Some of the key findings include:
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Labour issues in Australia: Analysis highlights labour challenges in Australia, such as increased vulnerabilities for foreign migrant workers, demonstrating that even developed nations are not immune to supply chain risks.
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The nearshoring paradox: While many companies are considering nearshoring to reduce risks, our findings suggest that relocating operations domestically, particularly for US companies, does not necessarily equate to lower risk.
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The impact of geopolitics: Geopolitical tensions are increasingly influencing the risk landscape for supply chains. Data indicates how these dynamics could impact sourcing decisions and the overall stability of supply chains.
Prioritising data quality for improved transparency
Quality, holistic data supports providing in-depth insights into every aspect of the supply chain, enabling businesses to make informed, strategic decisions. Clear, accurate information allows companies to track compliance with ethical standards and regulations, ensuring that all parties are held responsible for their practices.
LRQA’s Supply Chain ESG Risk Outlook report highlights that risks are everywhere. By understanding where hidden risks lie – whether related to labour practices, environmental impact, or geopolitical factors – companies can take proactive measures to mitigate these risks.
Biannual updates for ongoing insights
To ensure that LRQA’s clients stay ahead of emerging risks, report data is updated biannually. This commitment to providing timely and relevant information empowers businesses to adapt their strategies in response to the ever-evolving risk landscape.
Businesses that invest in robust risk management are better equipped to adapt to unforeseen challenges. The Supply Chain ESG Risk Outlook report is an essential resource for organisations committed to responsible sourcing and sustainable practices. By leveraging the insights from this report, businesses can enhance their understanding of supply chain risks and implement strategies that promote ethical and environmentally sound practices.
Download the report today and equip your organisation with the knowledge needed to navigate the complexities of ESG risks – both present and future.
