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      The 2024 KPMG CEO Outlook survey found that supply chain issues were identified by more than 1,300 global business leaders as the top threat to growth. Notably, supply chain risk has averaged only sixth place over the past decade, underscoring how critical and relevant risk management in supply chain management has become in more recent years.

      Global supply chains are evolving rapidly, and companies must balance cost-effective operations while ensuring responsible sourcing and compliance with ESG frameworks. The COVID-19 pandemic and the current tariff debate exposed critical supply chain vulnerabilities, from disruptions in sourcing and logistics to dependence on single suppliers.

      At the same time, climate change continues to exacerbate these risks through extreme weather events, resource scarcity, and regulatory pressures, making transparency, risk assessment, and sustainable resilience more urgent than ever.

      These disruptions can significantly affect order fulfillment and delivery times, ultimately impacting customer experiences. While reactive fixes may offer relief in the short term, long-term sustainability demands strategic transformation.

      Adrian Stoll
      Adrian Stoll

      Director, Lead ESG Advisory

      KPMG Switzerland

      Joy Jadam
      Joy Jadam

      Senior Manager, ESG Advisory

      KPMG Switzerland

      Supply Chain Due Diligence

      Supply Chain Due Diligence

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      Understanding sustainable supply chains and supply chain management

      Sustainable supply chains integrate environmental, social and governance (ESG) principles to create ethical, efficient and resilient operations. By embedding sustainability across the entire value chain - from raw material sourcing to final distribution - companies can improve transparency, comply with evolving regulations and reduce their environmental footprint.

      Key practices include minimizing waste, lowering emissions and ensuring fair labor conditions. These efforts not only support environmental and social goals but also drive business benefits such as cost savings, operational efficiency and risk reduction.

      Sustainability in supply chain management goes beyond regulatory compliance. As customer demand for responsible products increases and regulatory expectations rise, companies that lead with ESG principles gain a competitive advantage. They strengthen stakeholder trust, enhance brand reputation, and build the resilience needed for long-term success in a rapidly evolving global marketplace.

      Key challenges in sustainable supply chains

      Improving supply chain sustainability is a complex undertaking that involves overcoming several key challenges. Chief among them is the difficulty of mapping large, often fragmented supplier networks and understanding the relationships and interdependencies among different business partners. Many organizations struggle to obtain complete, accurate, and timely data, which hampers their ability to identify and assess priority risks - environmental, social or governance-related - across multiple supply chain levels.

      This lack of transparency and visibility makes it challenging to pinpoint where action is most needed. Companies must often balance limited resources against multiple and evolving risk factors, while aligning supply chain decisions with broader strategic and sustainability goals. As a result, building a robust, data-driven scm management process becomes essential for driving both resilience and long-term sustainability.

      Key challenges and considerations include:

      Key challenges and considerations:

      1. Transparency and traceability

      2. ESG integration into supply chain strategy

      3. Responsible sourcing

      4. Risk management

        • Transparency and traceability

          Achieving end-to-end supply chain visibility is critical to tracking the origin of goods, assessing the conditions under which they were produced and understanding their environmental impact throughout their lifecycle, enabling informed and responsible decision-making.

        • ESG integration into supply chain strategy

          Embedding ESG considerations into procurement, operations, and product lifecycles is essential for long-term value creation. This includes setting clear decarbonization targets, eliminating or reducing waste, and balancing resource constraints with long-term sustainability goals.

        • Responsible sourcing

          Achieving end-to-end supply chain visibility is critical to tracking the origin of goods, assessing the conditions under which they were produced and understanding their environmental impact throughout their lifecycle, enabling informed and responsible decision-making.

        • Risk management

          Proactively identifying and mitigating risks to ecosystems, climate, and communities is essential for maintaining a responsible supply chain that aligns with global environmental and human rights standards. Conducting thorough due diligence, including investigations and ongoing monitoring of supply chain partners ensures compliance with legal and ethical requirements, minimizing reputational and compliance risks for companies.

        The regulatory landscape driving sustainable supply chains

        If the business case for responsible supply chains alone isn't enough, regulatory pressure accelerates the shift toward mandatory supply chain due diligence. Several new and emerging European and Swiss regulations are shaping the future of supply chain responsibility:

        Swiss Code of Obligations (CO) and the related Child Labor and Conflict Minerals Ordinance (DDTrO)

        Requires companies operating in Switzerland to implement risk-based due diligence in their end-to-end supply chains. The requirements include identifying and addressing child labor and conflict minerals risks, publishing annual reports and taking measures to prevent or mitigate harm, thereby promoting compliance with labor and environmental standards.

        EU Corporate Sustainability Due Diligence Directive (CSDDD)


        Ensures companies identify, prevent and mitigate human rights violations and environmental damage throughout their operations and supply chain management. This directive reinforces the legal responsibility to respect people and the planet beyond the immediate business operations. Learn more here.

         

        EU Deforestation Regulation (EUDR)


        Applies to companies that place high-risk commodities (e.g. soy, palm oil, wood) on the EU market. It requires proof that these products are not linked to deforestation, reinforcing the need for traceability and due diligence throughout their supply chain. Learn more here.

         

        Corporate Sustainability Reporting Directive (CSRD)

        expands sustainability reporting requirements, mandating the disclosure of environmental and social impacts, including supply chain information. It aims to enhance transparency and comparability across industries.

        The future of sustainable supply chains

        Building a sustainable supply chain requires companies to proactively integrate ESG supply chain management principles while ensuring compliance with evolving regulations such as the CSDDD. For long-term success, companies must focus on supply chain due diligence, transparency, and innovation.

        Companies can use digital tools, strong supplier partnerships and clear sustainability goals to build resilience, improve efficiency, and stay competitive in the global market.

        Supply Chain Due Diligence

        Supply Chain Due Diligence

        Why companies can’t afford to ignore sustainability in their value chains

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        How KPMG can help you build a sustainable supply chain

        Supply chain resilience and building a more sustainable supply chain requires proactive integration of ESG principles backed by compliance with evolving regulations and the adoption of innovative digital solutions. At KPMG, our sustainable supply chain and ESG team helps you improve your operations by providing cutting-edge thinking on sustainable supply chain management, supported by leading digital solutions and tools. 

          Plan

          • Set your strategy and design your future-fit supply chain

            We work with you to develop a strategic blueprint that aligns your supply chain with both business objectives and sustainability goals. This includes optimizing supply chain processes, governance, organizational structures and technology usage to boost efficiency, adaptability and compliance with market changes and regulatory demands.

             

          Assess

          • Identify and manage human rights and environmental risks

            We help you map and assess human rights and environmental risks throughout your operations and value chain in ESG, from deforestation and biodiversity loss to labor rights and compliance gaps. Our risk assessments enable better monitoring, reporting and mitigation strategies.

          • Boost climate resilience and accelerate decarbonization

            We assess climate-related risks, including both physical and transitional risks, and identify emission hotspots in your supply chain. This enables your company to take targeted, data-driven and effective actions to build long-term resilience to climate change. 

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          Navigate climate risks and seize opportunities for a sustainable & resilient future.

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          Activate

          • Embed circularity in your business model

            We support your shift to adopting the principles of a circular economy, which focus on extending the lifecycle of products and maximizing resource efficiency. By embedding circularity, your company can reduce waste, drive innovation and open new revenue streams while contributing to a more sustainable world.

          • Advance responsible sourcing and transparency

            We help you put responsible sourcing at the heart of o your procurement management and strategy, mitigating legal and reputational risks. Using advanced ESG tech, we map your supply chain and provide real-time data for visibility and actionable insights into your operations, improving compliance and cost efficiency.

          • Empower suppliers and build shared accountability

             

            We help you co-create supplier engagement strategies - setting expectations, providing ESG training and incentivizing sustainable practices. This fosters a supplier network that is aligned with your values and committed to joint progress on sustainability.

             

             

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          Improve the footprint of your products.

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          Accelerate

          • Elevate your ESG performance

            We support you in leveraging ESG ratings such as EcoVadis and CDP to evaluate and improve your supply chain's sustainability performance. This helps you demonstrate commitment, identify improvement areas and enhance stakeholder trust -giving your brand a competitive edge in a purpose-driven market.

          • Track progress and optimize performance over time

            We help you develop robust ESG KPIs and integrate performance tracking into decision-making processes. This ensures you can measure what matters, adjust in real-time and stay on track with your sustainability commitments.

          Start your journey toward a sustainable supply chain

          Companies that prioritize business supply chain management with ESG principles gain long-term benefits, from risk mitigation to enhanced brand value. By adopting circular economy and supply chain strategies, businesses can achieve regulatory compliance while fostering innovation and resilience.

          KPMG's team of ESG and sustainable supply chain experts can guide you through every step of supply chain compliance.

          Meet our experts

          Adrian Stoll
          Adrian Stoll

          Director, Lead ESG Advisory

          KPMG Switzerland

          Joy Jadam
          Joy Jadam

          Senior Manager, ESG Advisory

          KPMG Switzerland

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