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EU Regulation Spurs Supply Chain Software Funding

Research provider Verdantix has forecast that the EU’s recent establishment of supply chain due diligence rules and social-related disclosures to improve transparency would unlock a US$7 billion market in supply chain sustainability software by 2029. The report highlighted recent rules such as the EU Forced Labour Ban, which prohibits goods made with forced labour, as an impetus for the projected 34% compound annual growth rate in related software spending between now and 2029. Manufacturing and retail are anticipated to be the biggest-spending sectors. “Europe leads the world on sustainability regulations, and this is reflected in its projected spending on supply chain sustainability software,” said Jessie Wilson, ESG and Sustainability Analyst at Verdantix. “However, the extraterritorial reach of regulations such as the Corporate Sustainability Reporting Directive means we expect spending in other regions such as North America to catch up.” Outside of the EU, risk management use cases are expected to accelerate global spending on supply chain sustainability software to US$2.8 billion by 2029, driven by supply chain disruption from geopolitical conflicts, such as the recent Red Sea attacks. “We expect future supply chains to be smart and resilient, leveraging AI to enhance data quality and predictive risk management,” said Wilson. “These advancements will provide deeper insights, helping companies identify and mitigate risks such as forced labour and sourcing from conflict-affected areas or sanctioned regions. Integrating these technologies will transform supply chains, making them efficient, ethical, and sustainable.”

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