The green chain reaction

In today’s global business environment, sustainability has become a critical component of supply chain management. New Zealand businesses are exposed to this shift, particularly as international partners scrutinise ethical sourcing and environmental impacts. Our recent Making Sustainability Sustainable in the Consumer Goods, Food and Retail sector report shows how global businesses are adapting to increasing sustainability regulations, especially those in industries reliant on complex supply chains.

For New Zealand exporters, understanding these trends and taking action to address them is essential for maintaining a competitive edge and market access.

Global pressure on supply chains:

1. Shifting supply chain priorities: Companies are seeking more control over their supply chains, with 67% of executives indicating they are locking in sustainable suppliers through exclusivity agreements and 56% looking to acquire ethical raw materials through mergers and acquisitions. Yet, for many businesses, ensuring supply chain transparency is a major challenge – only 15% of companies globally have complete oversight of their direct suppliers, and even fewer have visibility over their indirect suppliers.



Developing fewer, deeper relationships with key suppliers may allow businesses to maximise oversight and reduce risks, particularly around ethical sourcing and sustainability compliance.

For New Zealand exporters, this underscores the importance of understanding their story and having key sustainability data to hand.

2. Balancing cost and sustainability: Many global businesses are concerned about the rising costs of meeting sustainability requirements, with 62% of executives expressing concerns about the impact on input costs and 55% fearing that smaller suppliers may struggle to meet stringent reporting standards.



This is particularly relevant for New Zealand's small and medium-sized enterprises (SMEs), which may find it challenging to absorb the costs of compliance. In sectors such as horticulture, dairy, and fishing, businesses may need to invest in new processes and technologies to meet the increasing demands for sustainability reporting. The ability to adapt will be crucial to maintaining supplier contracts with larger international firms.

3. Modern slavery and worker protections: The report also highlights the growing regulatory focus on modern slavery and the pressures businesses face in managing social impacts across their supply chains. New Zealand businesses must ensure that worker protections are a central part of their sustainability efforts, not only to meet legal obligations but also to maintain ethical standards in increasingly scrutinised markets. Establishing comprehensive due diligence processes and working collaboratively with suppliers to improve transparency will be vital to avoiding supply chain disruptions and ensuring compliance.


4. The growing importance of Sustainability and ESG compliance: As Sustainability and ESG concerns become a central part of business operations, companies are also facing increased litigation risk related to their sustainability claims. The report highlights that 59% of executives are concerned about exposure to competition law risks, particularly when collaborating with competitors on sustainability initiatives. Additionally, the rising scrutiny of greenwashing (making unsubstantiated sustainability claims) means businesses must ensure their sustainability efforts are measurable and backed by concrete actions.



New Zealand businesses should focus on building strong Sustainability and ESG governance frameworks that not only guide their sustainability strategies but also ensure compliance with global regulations. Clear communication of sustainability efforts, backed by verified data, will help mitigate the risk of legal challenges and build trust with both consumers and stakeholders.

Next steps for New Zealand businesses:

As global sustainability trends continue to shape supply chain management, New Zealand businesses are well-positioned to lead by example. However, meeting rising expectations will require a proactive approach that focuses on transparency, compliance, and long-term partnerships. By taking these steps, New Zealand companies can not only mitigate risks but also build a competitive advantage in a rapidly evolving market.