The ESG Stress Test: 72% of Execs Say Trade Wars Will Force Trade-Offs

As reported in Material Handling & Logistics, the 2025 U.S. Business Sustainability Landscape Outlook from EcoVadis revealed that tariffs and trade wars are now the most significant external supply chain risk for 72% of U.S. executives. The pressure is already bending ESG commitments.

Fifty-six percent of respondents said that tariff policies will force them to compromise on sustainability or ESG priorities, and only 23% plan to uphold their strategies regardless of trade tensions. That tension between cost and conscience is playing out differently by role: C-suite leaders see a broader risk picture that includes extreme climate events and geopolitical conflict, while directors and VPs are more focused on operational headaches such as cyber threats, labor disruptions, and ESG compliance across regions.

Risk and compliance leaders said their top concern is cyber threats. Finance, supply chain, procurement, and sourcing leaders still rank tariffs as their chief risk, but diverge on the runners-up, which range from climate events to labor issues to regulatory complexity.

This survey also shows how fragile today’s supply chains are: Nearly half of companies reported experiencing four to 10 disruptions tied to third-party failures, trade disputes, labor issues, or environmental events in the past year, and 22% faced 11 or more. In response, leaders are trying to build resilience by reformulating products and services with value chain partners, developing second- and third-sourcing options, engaging suppliers on ESG, shifting sourcing away from risky regions, bolstering supplier risk management, and, in some cases, buying continuity insurance.

However, big cracks remain. Sixteen percent of companies — and 30% of those with more than $20 billion in revenue — admit to covering up major sustainability risks in their supply base when critical suppliers are involved. And despite repeated wildfires, hurricanes, and potential climate-related supply chain liabilities that could reach $500 billion annually by 2030, 21% of companies have taken no steps to address climate risk.

Executives in any sector should note that supplier intelligence, diversification, and transparent risk management are now central to both ESG credibility and long-term resilience.