Trend analysis: Supply chain traceability and transparency in 2026

Why It Matters

The global supply chain traceability market reached an estimated $18.7 billion in 2025 and is projected to exceed $42 billion by 2030, growing at a compound annual rate above 17 percent (MarketsandMarkets, 2025). Yet a 2024 survey by McKinsey found that only 6 percent of supply chain leaders reported full visibility beyond their tier-one suppliers. This gap between ambition and capability is closing fast in 2026, driven by regulatory mandates, maturing AI tools and growing consumer demand for product-level transparency. Companies that fail to invest now risk exclusion from key markets, regulatory penalties and reputational damage. Those that move early are discovering that traceability is not merely a compliance cost but a source of competitive advantage, enabling faster recalls, reduced counterfeiting losses and stronger brand trust.

Key Concepts

Supply chain traceability refers to the ability to track a product's origin, composition and journey through every stage of production, processing and distribution. Transparency goes further: it means making that information accessible to regulators, business partners and consumers.

Digital product passports (DPPs) are standardised, machine-readable datasets that travel with a product throughout its lifecycle, typically accessed via a QR code or RFID tag. They capture material composition, environmental footprint, repair instructions and end-of-life options.

Supply chain mapping is the process of identifying and documenting every supplier, sub-supplier and raw material source across all tiers. Traditional mapping relies on surveys and self-reported data; AI-powered approaches use trade data, shipping records, satellite imagery and natural language processing to build and continuously update multi-tier maps.

Interoperability describes the capacity of different traceability systems to exchange data seamlessly. Without it, each actor in a supply chain operates in a silo, and end-to-end visibility remains impossible.

Trend 1: Digital Product Passports Move from Pilot to Mandate

The European Union's Ecodesign for Sustainable Products Regulation (ESPR), adopted in 2024, requires digital product passports for batteries starting in February 2027, with textiles and electronics following by 2028 (European Commission, 2024). The regulation mandates that DPPs contain data on carbon footprint, recycled content, durability and repairability. Companies selling into the EU must comply regardless of where they are headquartered, effectively making DPPs a global standard.

Battery manufacturers are the first movers. CATL, the world's largest battery maker, began piloting DPPs across its European operations in late 2025, embedding QR-linked passports into every cell shipped to Volvo and BMW assembly plants (Reuters, 2025). The passport includes cathode chemistry, cobalt and lithium sourcing data, and a verified carbon footprint calculated according to the EU Battery Regulation methodology. Volvo has committed to making DPP data available to its end customers by mid-2026, positioning transparency as a brand differentiator.

The textile sector is preparing in parallel. The Textile Exchange reported in 2025 that 43 percent of its member brands had begun mapping the data fields needed for textile DPPs, up from 12 percent a year earlier. Inditex, parent company of Zara, announced a partnership with TextileGenesis to tokenise fibre-to-garment journeys for 100 percent of its cotton and polyester lines by the end of 2026 (Textile Exchange, 2025).

Outside Europe, momentum is building. Japan's Ministry of Economy, Trade and Industry launched a DPP pilot for automotive parts in 2025, and Brazil's National Institute of Metrology is developing passport standards for agricultural exports. These parallel efforts create both opportunity and complexity: companies operating in multiple jurisdictions must navigate differing data requirements while maintaining a single data architecture.

The cost of non-compliance is substantial. The ESPR empowers EU member states to impose fines and market bans on products sold without valid passports. For large multinationals, exclusion from the EU single market could mean forfeiting access to 450 million consumers.

Trend 2: AI-Powered Supply Chain Mapping and Risk Detection

Traditional supply chain audits capture a snapshot of known suppliers, but they miss the dynamic, multi-tier networks where most risks originate. AI is transforming this picture. Platforms such as Altana AI, which raised $200 million in Series B funding in 2024, now maintain a continuously updated map of more than 600 million entities across global trade (Altana AI, 2025). The platform ingests customs declarations, shipping manifests, corporate registries and sanctions lists, then applies machine learning to infer relationships between entities that companies may not even know exist in their supply chains.

The practical impact is significant. Unilever deployed Altana's platform across its palm oil supply chain in 2025 and identified 23 previously unknown sub-tier suppliers operating in high-deforestation-risk areas, enabling targeted engagement before regulatory disclosure deadlines under the EU Deforestation Regulation (Unilever, 2025). Procter & Gamble reported using AI mapping tools to reduce supplier onboarding due diligence time by 40 percent across its personal care division.

Satellite imagery combined with machine learning adds a geospatial layer. Orbital Insight and Descartes Labs offer platforms that overlay supplier locations with deforestation alerts, forced labour risk indicators and environmental compliance data. A 2025 study by the World Economic Forum found that companies using AI-enabled supply chain mapping detected compliance risks an average of 4.2 months earlier than those relying solely on manual audits (WEF, 2025).

The democratisation of these tools is equally important. Until recently, AI mapping was accessible only to the largest multinationals. Open-source frameworks like the Open Supply Hub (formerly Open Apparel Registry) now provide free facility-level identification for over 400,000 production sites, enabling mid-market companies to build transparency without enterprise-grade budgets (Open Supply Hub, 2025).

Challenges remain. AI models are only as reliable as their training data, and trade data in some jurisdictions is incomplete or delayed. False positives can overwhelm compliance teams, and there is a risk of algorithmic bias favouring suppliers in data-rich regions while penalising those in the Global South where records are less digitised.

Trend 3: Convergence of Sustainability and Commercial Traceability

For years, sustainability traceability and commercial traceability (anti-counterfeiting, recall management, inventory optimisation) operated as separate workstreams with different budgets and different technology stacks. In 2026, these streams are merging. The business case is straightforward: a single traceability infrastructure that serves both regulatory compliance and operational efficiency delivers a higher return on investment than maintaining two parallel systems.

Walmart's Project Gigaton provides a case in point. Originally launched to reduce supplier emissions, the initiative now uses the same serialisation and data-capture infrastructure to improve recall speed. In 2025, Walmart reported that products tracked through its sustainability traceability platform could be recalled 60 percent faster than those without serialised tracking, reducing average recall costs by an estimated $8 million per event (Walmart, 2025).

The pharmaceutical industry, long a leader in serialisation for anti-counterfeiting under the EU Falsified Medicines Directive and the US Drug Supply Chain Security Act, is extending its infrastructure to capture Scope 3 emissions and packaging circularity data. Novartis announced in late 2025 that it would embed carbon footprint data into the serialised codes already printed on every medicine package, leveraging existing scanning infrastructure at distributors and pharmacies (Novartis, 2025).

Consumer electronics brands see a similar convergence. Apple's supply chain transparency reports, once focused primarily on conflict minerals, now integrate carbon emissions per component, recycled content percentages and labour practice audits into a unified supplier scorecard. Samsung has followed with a comparable system covering its top 200 suppliers.

Market analysts at Gartner predict that by 2028, 60 percent of large enterprises will operate a single, unified traceability platform serving compliance, sustainability and commercial functions, up from fewer than 15 percent in 2024 (Gartner, 2025).

Market Dynamics

Venture capital investment in supply chain traceability startups totalled $2.1 billion in 2024, a 35 percent increase over 2023, with the largest rounds going to AI mapping and DPP enablement platforms (PitchBook, 2025). Corporate venture arms from LVMH, Nestlé and Maersk have made strategic investments in traceability technology, signalling that incumbents view these tools as core infrastructure rather than nice-to-have add-ons.

Regulatory tailwinds are intensifying. Beyond the EU ESPR, the US Uyghur Forced Labor Prevention Act continues to drive demand for Xinjiang-origin tracing in cotton and polysilicon supply chains. Canada's Fighting Against Forced Labour and Child Labour in Supply Chains Act, which took effect in 2024, requires annual reporting from companies with $40 million or more in revenue.

Standards bodies are converging on interoperability. GS1, the global standards organisation, released its EPCIS 2.0 framework in 2024, providing a common language for traceability events across industries. Adoption of EPCIS 2.0 grew 80 percent year-on-year in 2025, driven by DPP preparation in the EU.

Key Players

Established Leaders

• SAP — Enterprise resource planning giant offering Responsible Design and Production modules for DPP compliance and Scope 3 tracking across 440,000+ customers.
• IBM — Sterling Supply Chain Suite and Food Trust blockchain platform used by Walmart, Carrefour and Dole for end-to-end traceability.
• GS1 — Global standards body administering the barcode ecosystem and EPCIS 2.0 event-level traceability framework used in 116 countries.
• SGS — World's largest testing, inspection and certification company, providing physical and digital supply chain verification.

Emerging Startups

• Altana AI — AI-powered global trade map covering 600M+ entities; $200M Series B in 2024.
• TextileGenesis — Blockchain platform tokenising fibre-to-garment traceability; partnerships with Inditex and H&M.
• Circulor — Battery and critical minerals traceability using blockchain; works with Volvo and Polestar.
• Open Supply Hub — Open-source facility identification database with 400,000+ sites mapped globally.

Key Investors/Funders

• Breakthrough Energy Ventures — Bill Gates-backed fund investing in supply chain decarbonisation and traceability technologies.
• HSBC Asset Management — Climate-focused venture investments including supply chain transparency platforms.
• European Innovation Council — EU funding body supporting DPP and traceability startups through Horizon Europe grants.

Sector-Specific KPI Benchmarks

Action Checklist

• Map your supply chain to tier three or deeper. Use AI mapping tools to identify unknown sub-tier suppliers and assess concentration risks.
• Establish a DPP data architecture. Define the data fields required by the EU ESPR and other emerging regulations; begin collecting data from suppliers now.
• Adopt interoperable standards. Implement GS1 EPCIS 2.0 for event-level data exchange to avoid vendor lock-in and enable cross-industry data sharing.
• Integrate sustainability and commercial traceability. Audit existing serialisation and tracking systems for opportunities to embed environmental and social data alongside anti-counterfeiting and recall capabilities.
• Invest in supplier capacity building. Provide training and tools to tier-two and tier-three suppliers, particularly those in data-poor regions, to ensure they can participate in traceability systems.
• Set measurable targets with timelines. Define KPIs for traceability coverage, data quality and response times; report progress annually.

FAQ

What is a digital product passport and when will it be required? A digital product passport is a structured dataset attached to a physical product that records its composition, environmental footprint, origin and end-of-life options. The EU requires DPPs for batteries from February 2027, with textiles and electronics following by 2028. Companies selling into the EU must comply regardless of where they manufacture.

How does AI improve supply chain mapping? AI analyses trade records, customs data, shipping manifests and satellite imagery to identify supplier relationships across multiple tiers. Unlike manual surveys, AI mapping runs continuously and can detect changes such as new sub-suppliers, facility closures or sanction-list matches in near-real time. Altana AI, for example, maps over 600 million entities globally and has helped companies like Unilever uncover previously unknown suppliers in high-risk areas.

Is traceability only relevant for large multinationals? No. Regulatory mandates increasingly apply to mid-sized companies. Canada's forced labour reporting law covers companies with $40 million or more in annual revenue, and the EU ESPR applies to any company placing products on the EU market. Open-source tools like the Open Supply Hub lower the technology barrier for smaller organisations.

What is the business case beyond compliance? Traceability reduces recall costs, accelerates recall speed, fights counterfeiting and provides data for inventory optimisation. Walmart reported that serialised sustainability tracking cut average recall costs by $8 million per event. Companies also find that transparent supply chains improve supplier negotiations, reduce insurance premiums and strengthen brand loyalty among sustainability-conscious consumers.

How do companies handle data privacy across jurisdictions? Data privacy is managed through tiered access controls. Raw supplier data is shared only with direct contractual partners, while aggregated, anonymised data feeds public-facing passports and regulatory disclosures. Companies must comply with GDPR in Europe, state-level privacy laws in the US and equivalent frameworks in Asia. Interoperable standards like EPCIS 2.0 include privacy-by-design features that limit data exposure to authorised parties.

Sources

• MarketsandMarkets. (2025). Supply Chain Traceability Market: Global Forecast to 2030. MarketsandMarkets.
• McKinsey & Company. (2024). Supply Chain Visibility Survey: Beyond Tier One. McKinsey & Company.
• European Commission. (2024). Ecodesign for Sustainable Products Regulation (ESPR): Digital Product Passport Requirements. European Commission.
• Reuters. (2025). CATL Pilots Digital Battery Passports for European Automotive Customers. Reuters.
• Textile Exchange. (2025). Digital Product Passport Readiness Survey: Member Brand Progress Report. Textile Exchange.
• Altana AI. (2025). Global Trade Map: 600 Million Entities and AI-Powered Supply Chain Visibility. Altana AI.
• Unilever. (2025). Palm Oil Supply Chain: AI Mapping Identifies Sub-Tier Deforestation Risks. Unilever Sustainable Living Report.
• World Economic Forum. (2025). AI-Enabled Supply Chain Mapping: Early Detection of Compliance Risks. WEF White Paper.
• Open Supply Hub. (2025). Facility Identification Database: 400,000+ Production Sites Mapped. Open Supply Hub Annual Report.
• Walmart. (2025). Project Gigaton Update: Traceability Infrastructure and Recall Performance. Walmart ESG Report.
• Novartis. (2025). Embedding Carbon Data in Serialised Pharmaceutical Packaging. Novartis Annual Review.
• Gartner. (2025). Unified Traceability Platforms: Market Penetration Forecast 2024–2028. Gartner Research.
• PitchBook. (2025). Supply Chain Traceability Venture Capital Trends 2024. PitchBook Data.
• GS1. (2024). EPCIS 2.0: A Common Language for Supply Chain Traceability Events. GS1 Global.