Supply Chain Decarbonization Slows but Financial Risk Drivers Create New Momentum

Completed supply chain decarbonization actions on Secaro's platform fell 53% in 2025 compared to 2024 as regulatory drivers weakened and business decision-making shifted to CFOs focused on cost reduction. However, rising insurance losses, carbon taxes, and supply chain climate risks are creating new financial imperatives for action, according to Secaro CEO Toby Newman.

According to Secaro data, 90% of supply chain emissions reduction actions recorded between 2020 and 2025 focused on energy optimization and efficiency, with lighting, compressor systems, and energy management among the most common measures. These actions deliver direct cost savings alongside emissions reductions. The European Investment Bank reported that approximately half of firms in the EU and U.S. invested in energy efficiency in 2024. The International Renewable Energy Agency states that 91% of new renewable projects are now cheaper than fossil fuel alternatives, strengthening the business case for clean energy transitions.

Insurance losses from natural catastrophes reached approximately USD 107 billion in 2025, according to Swiss RE. The UK government has predicted that the EU Carbon Border Adjustment Mechanism could cost UK businesses GBP 800 million per year. A 2025 UK government impact assessment estimated waste management costs at up to GBP 350 million per year for large businesses, presenting further savings opportunities through supply chain waste reduction. Climate disasters are predicted to cause over USD 1 trillion in damages in the US between 2026 and 2030, according to University of Chicago research.

Newman argues that supply chain decarbonization actions are increasingly justified on financial risk mitigation grounds even as environmental motivation weakens. IFRS sustainability reporting standards from the ISSB are being rolled out across major economies, creating a five-year compliance timeline toward 2030 targets. For Indian businesses with EU export exposure, the CBAM creates direct financial pressure to document and reduce carbon intensity in energy-intensive supply chains. Newman recommends starting with the largest suppliers, which can account for up to 80% of supply chain emissions, and focusing on measurable energy and waste efficiency gains.

Key figure — 53% decline in completed supply chain decarbonization actions on Secaro's platform in 2025 vs 2024