Analyst Insight: Global supply chain management has never faced such intensive demands, but as sourcing professionals struggle to keep pace with conflicts and tariff volatility, stricter regulatory enforcement on sustainability and forced labor is creating new challenges for due diligence.

Within this difficult environment, the good news is that supply chain sustainability budgets are being held, and even increased. Nearly 95% of responsible sourcing professionals report that their sustainability and risk management budgets are either being maintained (39%) or increased (56%) for 2026, according to a survey of 600 global firms by EiQ.

The problem is that many operations are now advancing more quickly than risk controls can adapt. This leaves gaps that expose companies to operational, ethical and reputational vulnerabilities. Despite the investment, more than half of businesses have faced penalties or fines for responsible sourcing violations in the last year.

When trade patterns shift, the earliest breakdowns tend to appear in social and environmental protections. Relocating production to less well trodden sourcing markets raises the risk of forced labor and substandard safety conditions.

So how can sourcing teams restore confidence in their due diligence programs? The answer is a combination of data, AI and a mindset reset. 

How to Remedy Waning Confidence 

Visibility of risk is a core challenge highlighted by the EiQ report. Only 24% of respondents cite being very confident in their program’s ability to detect risks. 

Limitations in monitoring and mitigation tools are fueling this sentiment. Annual audits are no longer enough. They’re a blunt instrument in tracking risk and often miss incidents that can increase risk exposure. 

The most agile businesses now leverage adverse media scanning tools, enabling them to see in real-time what the public is saying about them and respond appropriately. Continuous monitoring systems ensure nothing slips the radar, monitoring new sanctions imposed on suppliers, as well as labor violations, and health and safety incidents. This approach empowers sourcing teams to anticipate vulnerabilities and make more informed supply chain decisions. 

Similarly, supplier training is a powerful tool for supply chain transformation and resilience. 

By viewing suppliers as strategic partners, rather than passive third parties, sourcing teams can distill an ethos of sustainability throughout their supply chains. Educating partners with the knowledge, tools and motivation to make changes. 

Tariff Volatility and Policy Unpredictability

Tariffs sent shockwaves throughout the global economy last year, presenting new pressures on responsible sourcing teams. 

At the same time, the U.S. government has increased trade enforcement. Over the second half of last year, the Customs and Border Protection force issued several “Withhold Release Orders” on manufacturers, including in Taiwan, Mauritius and Serbia. High-profile labor practice investigations were widely reported by national media in Italy, the U.S. and the U.K., illuminating how prevalent human rights violations are throughout sourcing practices.

The U.S. Trade Representative's office announced in March that ‌it had begun unfair trade practice inquiries into 60 economies, including the European Union and Israel, over failures to take action on forced labor.

Faster Decision-Making

Sourcing teams with limited resources must remain agile in overcoming macroeconomic shifts. Supply chain data assisted by AI is now helping responsible sourcing managers make faster, better-informed decisions around the selection of new suppliers and markets. Using these insights can help to remove bottlenecks from decision-making, enabling teams to pivot quickly in the event of adverse policy announcements.

When making a change to supply, sourcing professionals can stave off financial penalties and government intervention by identifying labor risk hotspots for specific regions and implementing due diligence checks. By harnessing such data, businesses can eliminate blind spots and stay one step ahead of regulators. Successful businesses will be those who fully prepare for all scenarios of every new sourcing option.

Quality Over Quantity in Data

To ensure success, quality of data is essential. EiQ’s survey shows that nearly half of businesses cite poor data quality as their biggest obstacle to effective risk management, closely followed by siloed data sources. 

It’s not the volume of data, but the reliability and integration of it that is key. Silos threaten supply chain resilience. The issue is exacerbated by fragmented supply chain systems. Data capture is held back by outdated platforms and manual processes. Subsequently, businesses struggle to identify patterns and effectively deploy resources to the areas that need it most.

By investing in integrated platforms that consolidate supplier information, sourcing teams are able to give themselves a holistic view and analysis of supplier performance. View data not as a compliance checkbox, but as a strategic asset that drives proactive decision‑making.

AI is the Top Investment Priority

Although automated risk management systems promise to alleviate the pain points associated with manual processes, more than a third of survey respondents say they are not leveraging any form of automation. Only 20% report full automation of their systems.

Artificial intelligence promises to transform responsible sourcing and due diligence processes, taking traditional compliance management approaches and transforming them into connected, automated workflows, powered by unique and proprietary risk intelligence. Sourcing professionals recognize this, with more than a third of survey respondents identifying AI‑powered automation as the capability that would most improve their supply chain risk management, with predictive risk modelling cited as the top area for investment in the year ahead.

Yet, when it comes to supply chain intelligence, human oversight is key. The deployment of AI and automation is an opportunity to elevate existing team dynamics, and entwine the technology with the deep, technical, human experience that you have in your organization.

In the current climate, continuity, product integrity and brand reputation are all under pressure. From our survey we’ve seen that, by investing in sustainability, businesses are seeking to overcome heightened scrutiny and increasingly severe financial penalties. 

True resilience, however, demands smarter data, continuous monitoring, empowered partners, and AI-driven insight to build agile, transparent, and accountable supply chains. By leveraging this approach, businesses can ensure the social and environmental impact of their sourcing strategies is felt positively by communities, its workforces and suppliers.