Integrated sustainability. As regulatory requirements for environmental sustainability tighten, companies will adopt stricter environmental sustainability practices to ensure compliance. The extension of product life will focus on durability and reuse, while new laws on resource consumption will likely advocate for sustainable production methods. Simultaneously, stricter regulations on social sustainability will encourage companies to improve the well-being of workers and ensure compliance with human rights practices. Achieving regulatory compliance will require transparency, particularly in tracking Scope 3 emissions, which will remain a major challenge. Manufacturers will still lack visibility into deeper supplier tiers, and these suppliers will have little incentive to disclose emissions data, creating a transparency gap. To address this, third-party organizations will be crucial to independently measure and track emissions, ensuring accurate reporting while protecting supplier interests. End-to-end collaboration. End-to-end collaboration depends on promoting cooperation not only within and between supply chains but also between businesses and government entities. Central to this collaboration will be the establishment of data sharing mechanisms that enhance the data-driven aspect of regulatory compliance. An important starting point will be sharing data along value chains, which will be made possible by monitoring the supply chain for regulatory compliance. This monitoring will generate valuable data on how well the supply chain adheres to regulations. Sharing this data will drive continuous knowledge exchange and innovation in regulatory practices, enhancing compliance. Data sharing and knowledge sharing frameworks will serve as the backbone of the compliance effort, enabling the collaborative development of regulations and frameworks. Once these frameworks are in place, their implementation, compliance and enforcement should be closely monitored, with results reflecting the effectiveness of adherence to regulatory standards. This ongoing cycle of monitoring, data sharing, knowledge sharing, collaboration on regulation development and regulation enforcement will ensure supply chain system compliancy. Technology adoption. Technologies will enhance transparency in regulatory compliance through the enablement of data sharing and performance monitoring, guiding the development of regulations tailored to real-time needs. Compliance technologies such as AI will automate compliance tasks, flagging potential issues, generating reports and streamlining document reviews, while big data and advanced analytics technologies will enable the collection and analysis of vast amounts of data to predict regulatory challenges, ensuring continuous compliance and inspiring trust and accountability throughout the supply chain. Monitoring technologies will provide critical data throughout the supply chain and will enable tracking in remote locations. These technologies will enhance transparency, allowing companies to monitor products throughout their journey and ensuring compliance with regulatory requirements.4.2 Regulatory complexity From Shock to Strategy: Building Value Chains for the Next 30 Years 17

From Shock to Strategy 2025