COOs drive transformation towards sustainable supply chains amid new regulations

In 2025, Chief Operating Officers (COOs) are navigating through an increasingly complex landscape defined by rigorous global regulations and tariffs, most notably the EU Deforestation Regulation (EUDR) and the EU Corporate Sustainability Reporting Directive (CSRD). These regulations require companies to provide transparency and traceability not only for tier-1 suppliers but across the entire value chain, including Scope 3 emissions. As companies strive for compliance, a critical shift in operational strategies is taking place where sustainability is no longer seen as an isolated goal but is being integrated into core business functions. A key challenge that COOs face is gaining visibility over their supply chains, which is becoming vital for targeting emissions hotspots and facilitating effective capital allocation. Identifying areas where emissions can be effectively reduced allows for informed decisions on resource investment and encourages more adaptive and resilient supply chain structures. Richard Howells highlights that this visibility initiative is paramount for COOs aiming to steer their organizations towards sustainability and resilience in a rapidly changing marketplace. Collaborative efforts in sectors like the automotive industry exemplify the new collaborative strategies being adopted by businesses. Initiatives like Catena-X showcase how major industry players are partnering with technology innovators such as SAP to improve traceability and accountability in supply chains. This collaboration ventures beyond compliance by focusing on calculating component-level emissions and minimizing production waste, showcasing innovation through shared capabilities. Furthermore, leveraging technology plays an indispensable role in achieving these priorities. Companies are increasingly investing in solutions such as SAP Sustainability Data Exchange (SDX) and SAP Sustainability Footprint Management (SFM) to enable COOs and supply chain managers to gather, share, and utilize data efficiently. These tools empower businesses to turn insights into actionable strategies, which are critical for making faster and more informed decisions while working towards building more resilient, transparent, and sustainable supply chains for the future. Leaders in this space recognize that the proactive alignment of sustainability with operational goals will ultimately drive competitive advantage in the marketplace.