In the 2025 economic landscape, adopting a sustainable supply chain delivers concrete competitive advantages, from reduced operating costs to an enhanced corporate reputation. Moreover, European regulations are becoming increasingly stringent, making it essential to implement sustainable practices across the entire value chain. As a result, companies must be prepared to transform their operations to meet these challenges.
This practical guide explores every fundamental aspect of implementing a sustainable supply chain in 2025: from the operational definition of ESG criteria, to digital traceability tools, to the key metrics for measuring success. We will analyze concrete case studies of companies that have already achieved significant results, offering insights applicable to different Italian business contexts.
In the 2025 business landscape, a sustainable supply chain is a network of suppliers, manufacturers, and distributors that operates with the goal of minimizing environmental, social, and economic impacts throughout a product’s entire life cycle. This modern supply chain fully integrates ethical and environmentally responsible practices into a competitive, successful business model.
ESG criteria (Environmental, Social, Governance) form the basis for analyzing business activities from an environmental, social, and good-governance perspective. In 2025, these criteria have become fundamental in supply-chain management for several reasons:
First, the new European legislative framework has accelerated this process. Italy’s transposition of the CSRD Directive (2022/2464) introduces reporting obligations on the due-diligence process carried out by companies on sustainability matters, while the CS3D Directive (2024/1760) imposes supply-chain due-diligence obligations on certain categories of companies.
Against this backdrop, the United Nations Global Compact has set out 10 principles for measuring supply-chain sustainability, covering areas such as environmental responsibility, working conditions, human rights, and anti-corruption. These principles are based on the awareness that socially responsible practices benefit not only people and the planet but also long-term competitiveness and profitability.
Sustainable supply-chain management is articulated in three fundamental dimensions:
Environmental sustainability: Includes practices that reduce ecological impact, such as optimizing the use of natural resources, reducing carbon emissions, and implementing a circular economy. In a green supply chain, environmental responsibility principles are integrated from product design and material sourcing to production, logistics, and end-of-life management.
Social sustainability: Focuses on ensuring dignified working conditions, respect for human rights, and inclusion throughout the value chain. It encompasses issues such as fair wages, workplace safety, diversity and inclusion, and commitment to local communities. For instance, the “living wage” concept is considered a minimum standard to ensure workers have sufficient resources for basic needs.
Economic sustainability: Concerns the management of financial obligations to economic stakeholders, including customers, suppliers, and other supply-chain partners. It involves negotiating fair agreements, meeting financial commitments, and ensuring business resilience, balancing social and environmental responsibility with profitability.
Scope 3 emissions are a crucial component in assessing supply-chain sustainability. They are indirect greenhouse-gas emissions generated by business operations from sources not directly owned or controlled by the organization.
According to a 2022 Carbon Disclosure Project study, for companies reporting to the CDP, supply-chain emissions are the main contributor to greenhouse-gas emissions, averaging 11.4 times greater than operational emissions. Indeed, for many organizations these emissions can exceed 70% of total greenhouse-gas emissions.
Scope 3 emissions are divided into 15 categories, organized into upstream or downstream emissions along the value chain. Unlike Scope 1 and 2 emissions—which are easier to calculate—Scope 3 emissions are more difficult to measure and manage because of their indirect nature and the complexity of collecting data across the entire value chain.
Despite these challenges, tackling Scope 3 emissions is essential for companies aiming to meaningfully improve sustainability and meet growing regulatory and stakeholder pressures.
Implementing a sustainable supply chain requires a systematic approach and specific tools that allow companies to control the entire value chain. Far from being an additional cost, this process is a strategic opportunity to improve operational efficiency while reducing environmental and social impacts.
The first fundamental step in building a sustainable supply chain is a complete mapping of the supply chain. This process must consider both the upstream and downstream components.
The upstream part includes all activities related to the organization’s suppliers: from supplier selection to raw-material sourcing to inventory management. A well-designed upstream structure ensures a stable, efficient production flow and strong supplier relationships, which are particularly important during periods of fluctuating demand.
The downstream component, by contrast, includes all post-production activities: distribution, order management, and last-mile logistics. This part of the chain focuses on the timely delivery of finished products to the end customer, optimizing delivery times and maximizing the order-fulfillment rate.
Both parts of the supply chain are interconnected through three main flows:
Selecting suppliers that operate sustainably is not only an ethical decision but also a strategic one. A supplier that adopts responsible practices helps the company reduce risks associated with environmental and social issues, improve its brand image, and comply with increasingly stringent sustainability regulations.
Supplier ESG evaluation is generally conducted by analyzing four macro-areas:
This evaluation is carried out mainly through questionnaires that suppliers must complete, attaching certifications and official documents. The data collected can be integrated with audit reports and other publicly available information on the supplier’s sustainability.
Companies can implement this assessment in two ways: by conducting it themselves—gaining greater customization—or by relying on ESG information providers, which deliver a certified assessment without the need to invest in internal systems.
In the digital era, innovative technologies such as blockchain and the Internet of Things (IoT) are revolutionizing sustainable supply-chain management, making traceability and transparency more effective.
Blockchain, a decentralized technology, enables maximum transparency in tracking products and materials throughout their life cycle. Thanks to its immutable nature, it securely and verifiably stores data, creating a permanent record of transactions. This ensures the authenticity of information about product origin, increasing consumer trust and reducing the risk of fraud.
In parallel, IoT offers concrete sustainability solutions through sensors placed along the supply chain. These devices collect real-time data on various parameters, such as temperature, humidity, location, and energy consumption. The information gathered is then transmitted, organized, and “notarized” on the blockchain, where it remains immutable yet shareable.
Integrating these technologies allows companies to create KPI dashboards to monitor sustainability-related business metrics, facilitating informed, timely decisions. In addition, automating audit and monitoring processes reduces errors and improves the quality of the information obtained, enabling rapid interventions in the event of non-compliance.
Measuring the effectiveness of sustainability initiatives requires a well-defined metric system. According to recent studies, systematically monitoring sustainability KPIs allows companies to accurately identify improvement areas and make data-driven decisions.
The carbon footprint has become a universally recognized indicator for measuring greenhouse-gas emissions associated with business activities. In the transport and logistics sector, this aspect is particularly relevant, given that in Italy the sector accounts for about 25% of total emissions (418 Mt CO2e), 92% of which are attributable to road transport.
Other essential environmental indicators include:
Energy efficiency is the first pillar in reducing the carbon footprint, achievable through low-consumption technologies, process optimization, and employee awareness.
Social KPIs assess corporate policies relating to employees, suppliers, and local communities. These indicators examine aspects such as diversity and inclusion, workplace safety, and employee health and well-being.
Effective implementation of Inclusion, Equity & Diversity (IE&D) policies yields significant benefits: 73% of supply-chain managers believe their companies outperform competitors when these values are effectively implemented. In addition, more than three-quarters of HR professionals in companies with strong IE&D practices report low turnover and higher employee satisfaction.
Economic KPIs measure operational efficiency and costs avoided thanks to the adoption of sustainable practices. These include:
Accenture has found that the average operating margins of companies with high ESG-performance ratings are 3.7 times higher than those of companies with lower ESG performance, while shareholders receive total annual returns 2.6 times higher.
Therefore, to implement an effective measurement system, it is necessary to define strategic objectives, choose smart KPI that meet corporate goals, constantly monitor data, and interpret it correctly. This not only improves supply-chain sustainability but also provides a significant competitive advantage in today’s market.
Logistics optimization is a crucial area for emission reduction. In Italy, energy consumption accounts for over 80% of total greenhouse-gas emissions. The transport sector in particular must cut its emissions from today’s 418 to 232 million tons of CO2 equivalent by 2030.
Implementing advanced systems such as Warehouse Management Systems (WMS) and Transportation Management Systems (TMS) yields concrete results. TMS software can generate immediate savings ranging from 15% in annual transport costs to 30% in personnel management. Moreover, order and assortment optimization can prevent thousands of tons of inventory from ending up in landfills.
Companies with high ESG scores enjoy significant competitive advantages. Recent studies indicate that organizations with superior ESG-performance ratings achieve operating margins 3.7 times higher than those with lower performance. At the same time, their shareholders receive annual returns 2.6 times higher.
On the commercial front, 30% of consumers prefer to buy from brands with ethical values, while 28% have completely stopped buying from companies they have ethical concerns about. Therefore, implementing sustainable practices throughout the supply chain is not only an environmental issue but also an essential business strategy.
Despite the many advantages, implementing a sustainable supply chain presents significant challenges that companies must tackle with targeted strategies.
Information fragmentation is one of the main obstacles to sustainable supply-chain management. Many organizations struggle to obtain complete data from their business partners, especially second- and third-tier suppliers. Recent research shows that only 36% of companies effectively track sustainable practices beyond their direct suppliers.
Moreover, the heterogeneity of IT systems along the supply chain further complicates this process. Data are often stored in different formats, making integration and comparative analysis difficult. Companies therefore need standardized platforms for collecting and processing sustainability information.
Many suppliers—especially small and medium-sized enterprises with limited digital literacy—are reluctant to adopt new technologies. This situation is particularly evident in emerging markets, where 62% of suppliers lack the technical skills needed to implement advanced traceability solutions.
Consequently, companies must invest in supplier training and create incentives that make adopting sustainable practices advantageous. Collaborative strategies rather than top-down mandates are more effective in the long term.
Adopting a sustainable supply chain requires significant upfront investments, which can be a considerable barrier. Implementation costs include:
However, the return on investment becomes positive in the medium term—typically within two to three years. Companies that have implemented sustainable supply-chain systems have reported operational savings of 15–25% by the third year, mainly thanks to process optimization and waste reduction.
A sustainable supply chain is undoubtedly one of the most strategic elements for corporate competitiveness in 2025. Throughout this guide, we have shown how integrating ESG principles across the entire supply chain is not simply a regulatory obligation but a concrete opportunity for growth and innovation.
First and foremost, we have seen that responsible supply-chain management can significantly reduce an organization’s overall environmental footprint, considering that up to 80% of corporate emissions come from these activities. Moreover, implementing advanced digital tools such as blockchain and IoT is revolutionizing traceability and transparency, which are essential elements for truly sustainable management.
Despite initial challenges—such as fragmented data collection and implementation costs—the return on investment generally becomes positive within two to three years. The data presented show that companies with high ESG scores achieve operating margins up to 3.7 times higher than their competitors.
To overcome adoption barriers, it is essential to take a gradual, collaborative approach, actively involving all supply-chain stakeholders. Sustainability metrics must therefore be integrated into everyday decision-making processes, using specific KPIs to monitor progress in environmental, social, and economic dimensions.
Ultimately, the transition to a sustainable supply chain is no longer optional; it is a strategic necessity for companies that wish to thrive in the economy of the future. The journey can be complex, to be sure, but the long-term benefits—from reducing environmental impact to boosting competitiveness—make this investment not only ethically sound but also economically advantageous.