The Massachusetts Institute of Technology’s (MIT) Sustainable Supply Chain Lab and the Council of Supply Chain Management Professionals recently released its 2025 “State of Supply Chain Sustainability” report that provides a comprehensive analysis of how global companies are navigating sustainability commitments. The sixth edition surveyed more than 1,200 professionals across 97 countries, providing a global view into Scope 3 emissions challenges, supplier engagement, and freight decarbonization strategies.
Survey results show persistent barriers in Scope 3 emissions reporting, along with emerging interest in cleaner freight transportation options. Notably, more than 70% of respondents report no change in sustainability ambition despite shifting regulatory landscapes, and another 12% have strengthened their commitments. Only 15% report a decline. These results reinforce a key finding: corporate sustainability strategies increasingly operate independently of political cycles, shaped instead by investors, boards, customer expectations, and global market forces.
Regional Sustainability Motivations
- Europe, driven by the Corporate Sustainability Reporting Directive (CSRD), leads in data governance, transparency, and standardized sustainability reporting.
- North America is influenced more by investor expectations and C-suite priorities than by regulation.
Across both markets, public sustainability commitments align strongly with operational integration. More than 57% of companies with public goals embed sustainability into daily decisions, compared with only 13% of companies with internal-only goals, highlighting the power of public accountability.
CSRD remains the most powerful force pushing companies toward standardization, better data governance, and deeper supply chain transparency. In North America, investor expectations and C-suite priorities take precedence over government pressure. Yet in both markets, companies with publicly stated sustainability goals show far higher integration of sustainability into daily decision-making. More than 57% of companies with public pledges embed sustainability into routine operations, compared with only 13% of companies that keep goals internal. According to the report, public accountability is a major factor in execution.
Scope 3 Emissions: The Defining Challenge of 2025
Scope 3 emissions, which are indirect emissions occurring across the supply chain, remain the most difficult and significant aspect of corporate climate action. For many companies, they represent over 75% of total emissions, yet far fewer organizations report progress compared with Scope 1 and 2. Respondents identified three critical barriers in Scope 3 emissions reporting:
- Limited supplier data: Nearly 70% report lacking supplier-level activity data, preventing accurate emissions accounting and year-over-year improvement tracking.
- Lack of standardization: More than 50% of respondents report inconsistent methodologies, complex calculations, and unclear reporting frameworks as major obstacles.
- Internal capacity constraints: Small and medium-sized enterprises (SMEs) especially struggle with limited expertise, resources, and access to affordable digital tools, delaying progress.
Despite the need for more scalable solutions, spreadsheets remain the dominant tool (66%) for emissions measurement, signaling that most companies are still early in their decarbonization maturity. European companies are advancing faster by leveraging life cycle assessment (LCA) tools and custom-built digital platforms, while North American firms rely more on industry averages and financial proxies, which improve comparability but limit visibility into supplier-specific improvements.
Barriers to Scope 3 Reductions
According to 56% of respondents, the biggest barrier is an unclear return on investment (ROI) for Scope 3 reduction initiatives. Companies also struggle with:
- Limited influence over suppliers
- High upfront costs
- Policy and regulatory uncertainty
- Low customer willingness to pay (especially for SMEs—49%)
These findings highlight the urgent need for clear value propositions and shared investment models across supply chains.
Supplier Engagement & Industry Collaboration
The report identifies four main approaches companies use to engage suppliers on emissions reductions:
- Integrating sustainability into sourcing decisions
- Requesting emissions data from suppliers
- Conducting audits or requiring certifications
- Providing training, tools, or capacity-building support
Despite their strategic importance, financial incentives and long-term contracts remain underused. Yet industry collaborations are emerging as powerful accelerators: nearly 50% of companies participate in sector alliances, and 80% of those report meaningful benefits, including:
- Better emissions data quality
- Lower costs
- Stronger supplier alignment
- Improved regulatory readiness
Programs like SteelZero, RE100, and multi-buyer procurement coalitions demonstrate how collective demand can reshape entire industries.
Freight Transportation: Key to Decarbonization
Freight transportation, one of the largest components of Scope 3, received special focus in the 2025 report. Companies are evaluating three core pathways for low-carbon freight:
Near-Term Solutions (1–3 Years)
- Biofuels, viewed as the most immediately scalable and impactful.
- Battery-electric vehicles, especially for urban and regional routes.
Long-Term Solutions (4–10 Years)
- Hydrogen, seen as a promising option for heavy-duty, long-haul transport once cost and infrastructure barriers are reduced.
Barriers Are Significant and Regionally Distinct
Respondents in North America reported limited incentives, industry resistance, and infrastructure gaps while those in Europe note higher expectations but greater friction due to regulatory complexity, cost, and ROI concerns. Across both regions, companies are prioritizing operational efficiency, route optimization, load consolidation, and fuel management as essential, low-cost first steps.
A Clear Signal for 2025 and Beyond
Across every region, sector, and company size, it is clear that sustainability still matters and is increasingly a source of competitive advantage. Companies with clear public commitments, strong governance, and collaborative operating models are consistently the ones that produce measurable outcomes. At the same time, the path to decarbonizing supply chains, especially Scope 3 and freight transportation, demands digital tools, stronger supplier engagement, and cross-industry alignment.
Progress remains uneven, but momentum is accelerating. The companies investing now in scalable systems, transparent reporting, and supplier-enabled decarbonization will define the next era of sustainable supply chain transformation. If your company needs assistance in developing or improving supplier engagement or supply chain sustainability initiatives, please contact Canopy Edge for an initial consultation.
