Paul Marushka, CEO and President, Sphera
Sphera Research Highlights Increased Financial Instability and Escalating Risks from Disasters Disrupting Supply Chains in 2024
Chicago, IL, Jan. 21, 2025 (GLOBE NEWSWIRE) — Sphera, the leading provider of Enterprise Sustainability Management solutions, has unveiled its 2025 Supply Chain Risk Report, offering an in-depth analysis of the most pressing risks and emerging opportunities reshaping global supply chains. As organizations grapple with evolving regulatory landscapes, economic volatility and heightened environmental and social accountability, the report provides procurement, supply chain and sustainability leaders with actionable insights to navigate the complexities ahead.
The report’s findings are drawn from Sphera’s Supply Chain Transparency solution, leveraging its continuous real-time AI monitoring of over 15 billion global data points monthly, combined with the expertise of Sphera’s in-house risk research team.
“As global supply chains grow more interconnected and vulnerable, businesses are increasingly exposed to financial, environmental and operational risks,” said Paul Marushka, CEO and President of Sphera. “The findings from this year’s report highlight the need for real-time insights, predictive analytics and data-driven strategies to ensure resilience. By addressing these risks proactively, companies can transform vulnerabilities into competitive advantages while navigating today’s complex landscape.”
Key findings from the report include:
- Financial strain intensifies: Early warning indicators of supplier financial strain increased by 11%, with bankruptcy declarations surging 48% and force majeure declarations rising 61%. These trends underscore the need for real-time monitoring and proactive risk mitigation strategies to safeguard operations.
- Continued global disruptions: Although delivery-related risks declined by 7%, natural hazards and geopolitical tensions continued to cause widespread disruptions, averaging over 14 incidents per year per organization. Resilience planning and adaptive logistics strategies remain critical.
- Rising quality concerns: Incidents tied to product quality — including recalls and hazardous material risks—increased by 22%, emphasizing the importance of robust quality management frameworks to protect brand trust and operational continuity.
- Compliance pressures mount: Sustainability emerged as a central focus in supply chain management in 2024, fueled by the rising demand for ethical practices, environmental accountability and stricter global regulations. A 29% increase in human rights-related issues highlighted the urgency for transparent operations and stronger supplier partnerships to address compliance risks and meet global expectations.
The challenges facing supply chains in 2025 are vast, interconnected and evolving.
Financial stress intensifies with increased bankruptcies and force majeure declarations
Financial risk indicators rose by 11% over 2023, with bankruptcy declarations surging 48% year-over-year and force majeure declarations jumping 61%.
The financial fragility of supply chain partners poses a significant risk to operational continuity, requiring businesses to monitor supplier health and take pre-emptive action to mitigate disruptions.
Firms still faced recurrent disruptions throughout the year. Strikes escalated to a national scale, with walkouts in ports in Australia and the US negatively impacting supply chains. Flash floods alone rose by 60%, with notable disruption across Europe in summer 2024, exacerbating delays and underscoring the growing impacts of climate change on global logistics and supplier operations.
Regulatory pressure on the rise globally
Sustainability risks became more pronounced in 2024, particularly in Europe, as global regulations tightened and stakeholders demanded greater transparency, with compliance requirements increasingly mandating active supplier engagement. Sustainability-related risk indicators rose 6%, with human rights issues seeing the sharpest increase at 29%. Environmental compliance challenges, particularly linked to more stringent regulations, further complicated risk management efforts.
Quality risks add to the complexity
Maintaining product quality continued to challenge organizations, with quality-related incidents rising by 22% in 2024. Supplier site relocations, driven by cost pressures and market dynamics, led to a 54% increase in hazardous material risks and a 19% rise in product recalls.
Such challenges highlight the importance of robust supplier oversight and proactive quality management to mitigate financial, operational and reputational risks.
The full 2025 Supply Chain Transparency Risk Report can be found here.
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About Sphera
Sphera is the leading provider of Enterprise Sustainability Management (ESM) performance and risk management software, data and consulting services focusing on Environment, Health, Safety & Sustainability (EHS&S), Operational Risk Management (ORM), Product Stewardship and Supply Chain Transparency. For more than 30 years, we have served over 8,400 customers and a million-plus users in 95 countries to help companies keep their people safe, their products sustainable and their operations productive. Learn more about Sphera at www.sphera.com. Follow Sphera on LinkedIn.
Attachments
- Paul Marushka, CEO and President, Sphera
- Sphera Research Highlights Increased Financial Instability and Escalating Risks from Disasters Disrupting Supply Chains in 2024
CONTACT: Andy North Sphera Solutions anorth@sphera.com
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