Only 14% of Companies Can Prove Supply Chain Safeguards Work

Jan de Vries · 2026-09-18

### The Alarming Reality of Supply Chain Safeguards A recent study dropped a bombshell: only 14 percent of companies can actually show that their responsible sourcing programs are reducing risks or improving outcomes. That means a whopping 86 percent are essentially flying blind when it comes to ensuring their supply chains are ethical and sustainable. If you're running a business that sources materials from overseas, this should make you pause. You might think you're doing the right thing by having a code of conduct or auditing suppliers, but if you can't prove it's working, you're part of the problem. And in today's world, consumers and investors are watching closely. ### Why This Matters for European Startups European startups are often celebrated for their innovative approaches and commitment to sustainability. But this study suggests that even the most well-intentioned companies struggle to demonstrate impact. For startups looking to incorporate in the EU, this is a wake-up call. Investors are increasingly asking tough questions about ESG (Environmental, Social, and Governance) metrics. If you can't show that your supply chain safeguards are effective, you risk losing funding and reputation. ### What's Going Wrong? So why are so many companies failing to prove their programs work? Here are a few common pitfalls: - **Lack of data**: Many companies don't have systems in place to track the outcomes of their sourcing initiatives. They rely on audits that only check compliance, not results. - **Complex supply chains**: With multiple tiers of suppliers, it's hard to see beyond the first level. Most companies don't even know who their sub-suppliers are. - **Focus on process over impact**: Companies often measure activities (like number of audits) rather than actual improvements (like reduced carbon emissions or fair wages). - **No clear benchmarks**: Without baseline data, it's impossible to know if things are getting better or worse. ### How to Turn It Around If you're part of that 86 percent, don't despair. There are practical steps you can take to start demonstrating real impact. First, invest in technology that gives you visibility into your entire supply chain. Blockchain and IoT sensors can help track materials from source to shelf. Second, set clear, measurable goals for your responsible sourcing program. Instead of just saying "we'll improve working conditions," define what that means: "reduce overtime hours by 20 percent in the next year." Third, collaborate with industry peers and NGOs to share data and best practices. No one can solve this alone. Finally, be transparent. Even if you're not perfect, sharing your progress and challenges builds trust. Consumers appreciate honesty more than perfection. ### The Bottom Line The study's findings are a stark reminder that good intentions aren't enough. For European startups aiming to make a mark, proving the effectiveness of supply chain safeguards isn't just a nice-to-have—it's becoming a license to operate. The companies that figure this out will be the ones that thrive in the coming decade. So ask yourself: can you show that your safeguards are working? If not, it's time to start.