Recent findings indicate that a significant number of UK businesses are striving for greater transparency in their supply chains, driven by mounting regulatory pressures and the need to disclose environmental and social factors. This shift represents a 12 percentage point increase to 55% of businesses seeking deeper insights into their supply chains compared to earlier in the year.
Simultaneously, nearly half of the businesses are actively improving their capabilities to validate materials and processes, a notable rise from just over a third previously. This increased focus on transparency is a response to more stringent expectations from a diverse group of stakeholders including consumers, investors, regulators, and employees.
Recent regulations, such as those focusing on preventing forced labor and mandating corporate supply chain due diligence, have amplified the necessity for companies to maintain comprehensive oversight over their supply chains.
Additionally, the pressure from customers to meet Environmental, Social, and Governance (ESG) standards is intensifying, with almost three-quarters of businesses reporting growing demands to align with ESG criteria.
In response to these pressures, many UK businesses are also observing a trend toward reshoring, with more than a third having already relocated their supply chains closer to home to bolster resilience and mitigate geopolitical risks. This trend is further emphasized by an increasing number of businesses looking to reduce their dependence on distant suppliers, particularly those in China.
The survey highlighted that geopolitical tensions, such as security concerns in critical shipping routes, are influencing supply chain decisions, particularly in sectors like wholesale and retail trade.
Moreover, businesses are navigating other significant challenges such as rising costs, inflation, energy prices, and the availability of skilled workers. However, there is a general sentiment among businesses expecting more favorable market conditions in the near future, despite concerns over modest economic growth.
Confidence among businesses is on the rise, with a noticeable increase in those expressing a strong belief in their potential for growth over the next three years. This optimism is also seen in the growing importance of international trade, with many companies planning to expand their global market presence.
The findings underscore a crucial demand for governmental assistance in easing regulatory burdens to facilitate smoother international trade, reflecting the ongoing bureaucratic challenges faced by businesses.
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