How Are Manufacturers Navigating Evolving Sustainability and Trade Regulations? 

The Data

1. 1

   We found that 54% of earnings calls in 2025 so far have featured discussions of tariffs, amid ongoing policy shifts.

2. 2

   Around 88% of all suppliers working with the companies in our data set are based outside the US.

3. 3

   The automotive industry has the highest overall number of suppliers (92%) outside the US compared to other industries.

This week, the European Commission announced its first "Omnibus Simplification Package," proposing significant changes to the Corporate Sustainability Reporting Directive (CSRD). The proposal would exempt 80% of EU-based businesses (primarily those with fewer than 1,000 employees) from mandatory emissions reporting requirements. However, the finality of the proposed changes remains uncertain.

The US is in a similar position, with emissions reporting regulations proving complex and evolving. Though California’s Climate Corporate Data Accountability Act is still due to come into force in 2026, the Trump administration’s industrial agenda is marked by fossil fuel expansion and deregulation.

For large companies operating across the EU and US, navigating compliance with these frameworks as well as geopolitical volatility is critical. The secret to maneuvering both? A laser-sharp focus on visibility.  

Rethinking Sourcing Strategies 

In 2025 so far, 54% of the earning calls mention tariffs, according to our analysis. At a recent conference, Ford CEO Jim Farley said “[tariffs] could be devastating to the industry, and potentially add $60 billion in cost,” emphasizing the need to reconsider supplier strategy. 

To navigate this volatility, leaders need a comprehensive view of who their key suppliers are at every tier, where their materials come from, and how they’re transported, information equally important to mapping carbon footprints. Then, companies can make informed decisions about localization and reshoring efforts for vertical integration.  

Of the suppliers working with the companies in our data set, around 88% are based outside the US. The lack of US suppliers reinforces the need to prioritize supplier visibility and reshoring, since tariffs will inevitably have a big impact.  

This led us to investigate supplier diversity by industry. We found that the automotive industry has the highest number of suppliers overall, with 92% located outside the US, the highest of any other industry. 

Although studies have shown that domestic supply chains can have lower carbon intensity than their international counterparts, companies must assess their entire ecosystem to ensure lockstep growth. Nearshoring/reshoring isn't a silver bullet: the true opportunity lies in identifying emerging regions that offer a lower carbon footprint and deliver on crucial priorities for leaders. 

Vertical Integration In Action  

Under its local-for-local strategy, BMW established battery production in Germany and is on track to reduce emissions from its battery manufacturing processes by up to 60%. This is driven by the use of renewable energy and recycled materials such as cobalt, lithium, and nickel. The company has stated its actions, which are part of a broader plan, are to “safeguard production even in the event of unforeseen political and economic events.” 

Ford is investing in US-based manufacturing with its BlueOval Battery Park, which is set to begin production in 2026. The facility will produce lithium iron phosphate (LFP) batteries for models like the Mustang Mach-E and F-150 Lightning, reducing reliance on imports. Creating a vertically integrated ecosystem in this way, which includes material sourcing, battery production, and recycling, on-site or nearby reduces emissions by consolidating processes into one location and also makes EVs more affordable through reduced battery costs.

Unilever set out to transform the historically ecologically harmful palm oil industry by making its supply chain fully sustainable and deforestation-free. It redefined its sourcing policies, requiring stricter environmental and ethical compliance. To help suppliers meet these new standards, Unilever introduced cutting-edge technology, including satellite monitoring, AI-driven risk detection, and blockchain for traceability, ensuring transparency from plantation to product. Unilever achieved 97.1% deforestation-free palm oil in 2023.  

The Takeaway 

Ultimately, shifting sustainability policies are part of the larger pattern of flux affecting supply chains. Being able to adapt, be proactive, and remain resilient, even as policies change, starts with visibility. 

Map suppliers at all tiers to identify inefficiencies, optimize logistics to avoid tariff-heavy routes, and track emissions reductions. Collaborate with suppliers to collect granular data for precise mapping and actionable insights – this might involve tech partnerships, as PUMA has done with Sphera.  

Use that visibility to reshore or localize key processes, considering tariff implications alongside renewable energy infrastructure and skill availability, too.  The “China Plus One” strategy, widely adopted in the apparel and footwear industries, offers benefits like resilience, while a more domestic supply network can offer, for example, protection from tariff worries. 

To see a different data cut or to dig deeper into this topic, reach out to our Head of Research Analytics, Cody Stack, at Cody.Stack@zero100.com.     

Methodology  

Zero100’s proprietary data and analytics are a combined effort between our data scientists and research analysts. We provide data-first insights matched with our own research-backed points of view and bring this analysis to life via real-world case examples being led by supply chain practitioners today.      

For this study, we analyzed 277 supply chain organizations and their earning calls transcripts. We also investigated 123k+ unique relationships between companies and suppliers across 134 countries.  

Further Reading  

• The Signal: Reciprocal Tariffs Up the Ante for Sourcing Professionals  

• The Zero100 Podcast: Unravelling Supply Chain’s Scope 3 Data Conundrum 

• Research Report: The C-Suite Agenda: How Boardroom Priorities Are Reshaping Operations