What are Execs' Top External Risk Factors Across Operations?

Business leaders are increasingly faced with changing tariffs and trade wars, forcing companies to compromise on priorities in other business areas.

An EcoVadis study from part two of the 2025 US Business Sustainability Outlook highlights that 72% of US executives identify these two factors as the leading external supply chain risks.

More than half of respondents, at 56%, anticipate these issues will compel compromises on sustainability or ESG priorities, including 22% expecting major impacts.

Only 23% say they will uphold their ESG strategies and commitments regardless of tariff and trade pressures.

Pierre-François Thaler, Co-Founder and Co-CEO of EcoVadis, says: “Tariffs and trade ware are intensifying the pressure on supply chains and exposing cracks in sustainability commitments."

He adds: “The companies that will come out ahead are those using supplier intelligence to see risks early, diversify their options and avoid letting short-term shocks derail long-term resilience.”

Based on a survey of more than 400 executives at US companies with more than US$1bn in revenue, the report uncovers how escalating trade pressures, climate events, labour issues and cyber threats are colliding with sustainability commitments – often forcing difficult trade-offs.

Executive risk priorities

While executives in the study agree that trade disputes are extremely prominent in the risk landscape, C-suite leaders say there are broader risks that are top concerns, with 41% citing extreme climate events and 40% citing geopolitical conflict.

Directors and Vice Presidents emphasise cyber threats and labour disruptions – both cited by 36% of respondents – plus a third saying ESG regulatory compliance across regions.

In another area of businesses, risk and compliance leaders have a different view. Nearly two-thirds (63%) name cyber threats as their top concern above tariffs and labour disruptions.

Among these execs, 58% said tariffs are their top concern and 42% say it is labour disruptions.

Just over a third of finance leaders flag cyber and just under a third nod to climate. Whereas 44% of supply chain leaders point to ESG regulatory compliance across geographies and 39% geopolitical conflict.

Supply chain disruption

EcoVadis finds that these pressures are adding to the strain of broader supply chain disruptions. Nearly half (44%) of companies endured between four and 10 disruptions last year from third-party failures, trade disputes, labour issues or environmental events.

Leaders are taking action. Responses involve 61% focusing on value chain collaboration and reformulations and 56% on alternative sourcing, specifically for key components.

Other focus points include:

• Supplier ESG engagement (52%)
• Shifting sources away from risky regions (51%)
• Enhanced risk management (36%)
• Continuity insurance (20%)

Sustainability inaction

Among larger companies in the study, with revenues over US$20bn, 30% admit covering up major sustainability risks in their supply base because the affected suppliers were vital to their business. This compares to 16% of all companies.

Despite climate events, including repeated wildfires and hurricanes, 21% of firms report no actions on related supply chain risks, facing potential US$500bn annual liabilities by 2030, according to the study.

EcoVadis predicts that the cost of inaction could reach US$500bn annually by 2030. This is especially significant since a company’s supply chain accounts for 21 times more emissions on average than its direct operations.

However, the first report of the 2025 US Business Sustainability Outlook found that most companies are continuing to invest in sustainability, even amid regulatory rollbacks and greenhushing.