As 2024 is coming to an end, I'd like to take advantage of my last newsletter for this year to mention three crucial topics for procurement in 2025. They are not new, but they are of growing importance and will have an influence way into 2025 and beyond.
AI Oversight and Ethical AI
- AI adoption will mature, and procurement will increasingly rely on AI-powered tools for decision-making. However, governance around AI ethics, e.g., bias in supplier selection or sustainability scoring algorithms, will become a critical focus. (You can study our coverage of AI in Procurement from this year.)
- Procurement teams will need expertise in evaluating AI-backed solutions, ensuring transparency in decision-making and embedding ethical AI usage policies.?
- 2025 will continue to witness increasing geopolitical tensions, e.g., US-China decoupling and EU autonomy efforts. Governments will push harder for localized sourcing and supply chain sovereignty, particularly in critical sectors like?semiconductors, EV batteries and healthcare.
- Procurement professionals?will need to?navigate evolving trade regulations?(see our recent coverage on tariffs: parts?1,?2 and 3)?to create compliant, competitive and?antifragile supply chains.?
Circular Procurement as Standard Practice
- 2025 will be a critical milestone for achieving sustainability goals under frameworks like the Paris Agreement.
- Circular economy practices (reuse, recycling and designing for end-of-life)?will need to?go beyond niche initiatives to become mainstream requirements for many industries.
- Procurement teams?will need to?embed further circular principles into their practices, positioning sustainability not just as compliance but as a long-term value driver. Scope 3 emissions will continue to be a?major?concern with the growing need for higher precision in footprint calculations to be?actually?valuable in identifying levers and actions to decarbonize (and not just for compliance purposes).
I wish you a joyful holiday season and the best for 2025, as it will demand an even more dynamic, ethical and strategic approach to procurement.?
— Bertrand Maltaverne, Lead Analyst for Upstream Procurement
