Why 2025 Will Test Commitment to Fair Supply Chain Practices

Ethical procurement has been steadily gaining momentum over the past decade, reshaping how businesses engage with their supply chains. From supplier diversity to protecting labour rights, the standards for what is considered ‘fair’ are rising, with stakeholders paying closer attention than ever. 

In fact, the Procurement and Supply Chain profession may be at a tipping point. According to a Stanford Business School study, just over half of surveyed global businesses have already implemented sustainable procurement policies and practices, a figure expected to grow significantly in 2025.

Practicing ethical procurement means choosing suppliers and partnerships that align with universal values like fairness, sustainability and accountability. It’s not just about cost; it’s about building a supply chain that respects people, protects the planet, and fosters trust.

Placing this factor at the forefront of discussions within Procurement over the next year is likely to test organisations’ commitment to fair supply chain practices, especially if these outcomes have an impact on the bottom line. However, with it clear that organisations can no longer afford not to do this, it’s a consideration that is key.

Let’s unpack sustainable procurement’s key tenets —what it means, why it matters, and how businesses can act meaningfully in 2025.

Supplier Diversity as a Strategic Priority

Supplier Diversity is about breaking the mould of traditional sourcing by actively seeking out and partnering with businesses that bring different perspectives to the table – whether they’re minority-owned, women-led, or from underrepresented communities. 

And while there is a strong moral aspect of supplier diversity, there’s a compelling business case for it too. Research shows that companies in the top quartile for gender diversity are 25% more likely to achieve above-average profitability, while those in the top quartile for ethnic and cultural diversity see a 36% higher likelihood of outperforming their peers. 

These findings, drawn from McKinsey & Company research, highlight the tangible benefits of fostering diverse perspectives within an organisation. When extended to vendor ecosystems, the same principle applies. A diverse supplier base not only enriches the supply chain with fresh ideas and innovative approaches but also strengthens resilience and adaptability in a competitive market. 

As we move through 2025, expect increased scrutiny around supplier inclusivity, especially in industries that have been slow to adopt such initiatives. But to truly embrace supplier diversity, businesses must be able to proactively identify and support minority-owned, women-owned, and other underrepresented suppliers.

Technology is making it easier to do so. Supplier discovery platforms and data analytics tools now allow organisations to track diversity metrics. However, while these tools are valuable, meaningful progress requires an organisation-wide commitment to authentic, visible, and measurable action.

Labour Rights are Every Business’ Concern

The global supply chain continues to expose some of the most pressing human rights issues of our time. Labour exploitation, unsafe working conditions, and wage disparities are still rife in many industries. What has changed is the level of transparency now demanded by governments, consumers and investors. 

In 2025, ensuring your own business adheres to labour rights standards won’t be enough. You will need to demonstrate an active role in improving conditions across their supply chain. Legislation like Australia’s Modern Slavery Act and similar mandates globally require companies to report efforts combating forced labour. Again, organisations rely on technology to achieve supply chain visibility, identify risks, and ensure traceability, upholding ethical standards throughout production.

Take isotopic testing, for example, which is a novel use of technology that allows companies to pinpoint where materials really come from. Isotopic testing is being used by companies like Shein and Patagonia, to trace material origins and combat forced labour, particularly for cotton sourced from high-risk regions. This scientific method analyses the atomic makeup of materials by identifying unique chemical signatures or isotope ratios, revealing the geographical origin of crops. Traditionally used to verify food authenticity, isotopic testing now ensures supply chain integrity and addresses human rights violations effectively.

Equally beneficial is the Fair Food Program, recognised for its worker-driven approach to monitoring and enforcing rights in supply chains. Through partnerships between farmers, farmworkers, and retailers, this model ensures fair wages and safe working conditions while giving workers a direct role in shaping and upholding these standards. Businesses adopting similar collaborative approaches will better mitigate risks while leading efforts to build fairer, more sustainable supply chains.

Technology’s Role in Accountability

Technology is also transforming ethical procurement practices, making it easier, faster, and more effective for businesses to ensure accountability. Tools like spend management software, supplier monitoring platforms, and AI-powered risk models allow companies to spot risks, stay compliant, and maintain fair practices across their supply chains. 

Consider how predictive analytics can help forecast and mitigate ethical risks before they become a reputational crisis. Or how automated workflows can streamline audits, reducing the manual burden of compliance while increasing accuracy. 

The Cost of Falling Short

The risks of ignoring fair procurement practices are more visible than ever, as companies like Shein and Boohoo have discovered. Shein has faced global backlash for alleged links to forced labour in its supply chain, and Boohoo’s reputation took a hit after reports of poor working conditions in its UK factories. 

It’s not just retail brands under fire. Tech companies like Apple and Tesla have faced similar scrutiny. Apple has faced criticism for labour abuses at some suppliers, including excessive overtime and unsafe working conditions. Tesla’s cobalt supply chain has raised concerns over child labour in mines in the Democratic Republic of Congo.

Meanwhile, public demand for transparency is only growing louder. Companies that fail to adapt risk not only reputational damage but also losing market share and investor confidence to competitors who view ethical procurement as a strategic advantage and embed it deeply into their operations.

Making 2025 your own Tipping Point

The year ahead is a test of authenticity for organisations worldwide. As fair practices become expected and scrutiny increases, organisations that embed ethical procurement into their DNA will succeed.

Leverage technology, engage proactively with your supply chain, and demonstrate that your commitment to fair practices extends beyond rhetoric.