Resilient Supply Chains Will Be Low-Carbon Supply Chains

For many companies, the supply chain has become both the biggest decarbonization challenge and the biggest opportunity. While Scope 1 and 2 emissions (direct operations and purchased energy) are important, it is Scope 3 (emissions embedded across the value chain) that typically account for 70 - 90% of a company’s footprint.

And yet, progress is uneven. In the U.S., the political and regulatory landscape has shifted: national climate rules are delayed or under legal challenge, and some businesses are pulling back from formal net-zero pledges. But Scope 3 decarbonization is not a political debate, it is a business decision. While some stall, waiting for clearer mandates, the smartest companies are already moving. They know cutting emissions across the supply chain is not just about climate, it is about control, cost, and competitive edge. Scope 3 is the blind spot where risks concentrate and opportunities emerge. Ignoring it does not make it go away, it just means someone else will capitalize first.

Leading companies that stay committed to Scope 3 goals are not just meeting compliance, they are gaining strategic advantages. By tackling emissions across their supply networks, they uncover inefficiencies, strengthen partnerships, and reduce long-term costs. They are also better positioned to attract investors, win customers, and build credibility in a market that increasingly demands transparency. In short, they stay on top because they are solving problems others are avoiding.

What’s Blocking Progress

Companies face real roadblocks on the path to supply chain decarbonization. These challenges are significant, but they are also surmountable. And the urgency to act is only growing. Market, regulatory, and customer signals all point in the same direction: change is not a question of if but when. Starting now means shaping that future on your terms, rather than scrambling to catch up.

The most common challenges companies face include:

Data complexity
Measuring Scope 3 requires input from hundreds or thousands of suppliers. Many lack the resources to collect reliable data, leaving gaps and inconsistencies that make it difficult to build a full picture of emissions.

Sustainability vs. resilience trade-offs
Efforts to adjust supply chains in response to cost pressures or geopolitical risk do not always deliver the intended benefits. Shifting production may add complexity or even increase emissions, while prioritizing lower-carbon suppliers can mean higher costs or longer lead times. Balancing these trade-offs remains one of the toughest challenges.

Access to low-carbon inputs
Options for low-carbon materials and clean energy are growing, but supply has not yet caught up with demand. Companies that act early to secure renewable power, recycled materials, or low-carbon steel will be better positioned as competition intensifies.

What’s Driving Action

1. Geopolitics, Trade, and Tariffs
Volatility in U.S. trade policy and tariffs is reshaping supply chains. Gartner notes: “According to the 2025 Gartner® U.S. Trade and Immigration Policy Impact on Supply Chain Survey, 98% of supply chain leaders are planning changes to their supply chain strategy as a result of new U.S. tariffs.”

These changes come with both cost and complexity. Gartner also reports: “according to the 2025 Gartner Tariff Volatility Survey, 54% of CSCOs say it would take longer than 12 months to shift 25% of their supply to regional sources. Only 15% of companies are considering moving supply to the U.S. to mitigate the impact of the new tariffs.”

The risk is that short-term cost decisions could overlook carbon intensity and long-term sustainability. The leaders are balancing all three, tariffs, cost, and carbon, together.

2. Regulation
In the EU, the Corporate Sustainability Reporting Directive (CSRD) and Carbon Border Adjustment Mechanism (CBAM) are making supply chain emissions financially material.

In the U.S., the SEC’s climate disclosure rule remains tied up in courts, but California’s Climate Accountability Package (SB 253 and SB 261) is advancing. Large companies doing business in California will need to disclose supply chain emissions and climate risks, even as the laws face legal challenges.

3. Investors and Customers
Capital and market access increasingly hinge on value-chain credibility. Investors are scrutinizing how companies manage supply chain emissions as part of long-term risk. At the same time, enterprise customers are embedding climate criteria into procurement. Verified Scope 3 disclosure is rapidly shifting from “nice to have” to a prerequisite for contracts and trusted relationships.

Why Supply Chain Decarbonization Builds Resilience

Supply chain decarbonization is not just about sustainability, it is about resilience. Carbon-intensive supply chains are increasingly costly, vulnerable, and unattractive to investors and customers. Building low-carbon supply networks strengthens a company’s ability to withstand shocks, adapt to change, and create lasting value.

Carbon costs are rising
As carbon pricing and regulatory pressure increase, emissions-heavy supply chains are becoming expensive liabilities. Companies without supplier visibility risk absorbing hidden costs through inefficient logistics, outdated practices, or carbon-intensive operations. Early movers who map and engage their supply base can identify risks, strengthen supplier relationships, and capture savings that laggards miss.

Physical climate risks
In a world shaped by geopolitical tensions, pandemics, and climate-driven disruption, resilient supply chains must be agile and data-driven. The very practices that make supply chains more adaptive - optimizing logistics, reducing waste, leveraging digital tools, sourcing closer to demand - also lower emissions. A resilient supply chain is inherently a low-carbon supply chain.

Investor and customer scrutiny
Embedding resilience and decarbonization into supply chain strategy is no longer optional. Investors and customers expect transparency, accountability, and credible emissions reductions. Companies that can meet these expectations not only strengthen brand trust but also gain a critical edge in winning deals in a market that values low-carbon innovation.

In short, climate risk is a supply chain risk. Companies that engage suppliers to reduce emissions not only advance toward net-zero, they also build more resilient supply chains capable of withstanding both geopolitical shocks and climate impacts.

Pathways Forward

Design for both carbon and risk
Build supply chain strategies that evaluate suppliers through a dual lens of emissions and broader risk factors, including exposure to climate impacts, resource constraints, cost volatility, and shifting regulations.

Engage suppliers with clear expectations and support
Provide training, tools, and access to renewable or efficiency solutions. Tie procurement policies and contract renewals to decarbonization progress.

Enable progress through data and collaboration
Use technology to collect reliable supplier data. Collaborate with peers and industry alliances to secure access to low-carbon inputs and infrastructure.

Embed decarbonization into procurement
Make sustainability criteria part of sourcing decisions so that cost, carbon, and continuity are considered together.

Closing the Net-Zero Gap

The U.S. policy environment may be uncertain, but tariffs, climate risks, and investor demands are already reshaping supply chains. In Europe, regulation continues to set a high bar.

For companies that want to remain credible and competitive, the direction is clear: resilient supply chains will increasingly be low-carbon supply chains. Those who act early, balancing cost, risk, and emissions, will be best placed to secure resources, partners, and long-term market access in a rapidly changing global economy.

Learn more about how Schneider Electric supports businesses to decarbonize their supply chains.

Gartner, Supply Chain Network Impacts Due to Tariff Volatility: Board Briefing, 13 August 2025

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