Procurement teams operate in an environment of constant change, and the challenges only intensify when regulatory shifts come into play. The need for agility in procurement processes is critical, especially as businesses face increasing pressure to adapt to new compliance requirements. Global enterprises are achieving hyper agility in response to constant change using ORO, a no-code orchestration platform that allows procurement professionals to make process changes with ease, and that creates intuitive experiences that eliminate the need for traditional and labor-intensive 'change management.'

In this article, we’re going to cover key regulations that organizations should be aware of for 2025 along with suggested actions for procurement as they prepare.

European Union

Corporate Sustainability Reporting Directive (CSRD)

Starting January 2024 ¹, the CSRD imposed new rules to enhance transparency on governance, environmental, and social factors. The first round of companies impacted by this regulation will report in 2025. Other large companies, including large non-EU listed companies ² will also need to comply from 2025 ³. 

Suggested Actions for Procurement:

• Track and report on environmental, social, and governance (ESG) factors.
• Collect and validate supplier ESG data for compliance.
• Invest in enhanced supplier management systems and data integration tools.

Example: In 2023, Ørsted, a Danish renewable energy company, integrated its sustainability reporting into its annual report to comply with the CSRD. This approach included a double materiality assessment, aligning with the directive’s requirements ⁴.

EU Emissions Trading System (EU ETS) 

The EU ETS, a cap-and-trade system ⁵ regulating greenhouse gas emissions since 2005, expanded in 2024 to include maritime transport. Shipping companies are required to surrender allowances for 40% of their verified emissions reported in 2024 ⁶. As part of the EU ETS legislation phase-in, shipping companies will need to surrender allowances for 70% of their emissions reported in 2025, up from 40% in 2024. This step-by-step approach underscores the EU’s commitment to reducing emissions across sectors. 

Suggested Actions for Procurement:

• Account for increased costs from emission allowances in procurement budgets.
• Negotiate contracts with sustainability clauses.
• Collaborate with suppliers to adopt greener practices and low-carbon technologies.

Fuel EU Maritime Regulation

Taking effect on January 1, 2025, this regulation⁷ is part of the EU’s strategy to cut greenhouse gas emissions in the shipping sector. It mandates ships over 5,000 gross tons visiting EU ports to progressively lower the greenhouse gas intensity of their energy use. The reduction begins with a 2% cut in 2025, scaling up to an 80% cut by 2050, encouraging the adoption of cleaner fuels and technologies.

Suggested Actions for Procurement:

• Partner with shipping providers using cleaner fuels or energy-efficient technologies.
• Renegotiate long-term contracts to comply with GHG intensity reduction mandates.
• Prioritize suppliers with green certifications or emissions reduction programs.

EU Deforestation Regulation (EUDR)

The EUDR targets commodities ⁸ like cattle, cocoa, coffee, palm oil, rubber, soya, and timber, ensuring they are not sourced from land deforested after December 31, 2020. Products must also comply with relevant local laws. Initially set to apply from December 30, 2024, there’s a proposal to delay enforcement ⁹ to December 30, 2025, for large companies, and to June 30, 2026, for smaller enterprises. 

Suggested Actions for Procurement:

• Conduct rigorous supplier audits to verify deforestation-free sourcing.
• Implement monitoring systems to track commodity origins.
• Mitigate risks of shipment delays, penalties, and reputational damage.

Example: Nestlé has implemented satellite monitoring to ensure its palm oil supply chain is free from deforestation, aligning with regulations like the EUDR ¹⁰.

Digital Operational Resilience Act (DORA)

DORA is designed to bolster financial entities’ resilience to digital disruptions ¹¹. Although it officially came into effect in January 2023, organizations must be fully compliant by January 17, 2025. This framework will strengthen operational security in the EU’s financial sector.

Suggested Actions for Procurement:

• Conduct due diligence on third-party providers to ensure digital resilience.
• Revise vendor contracts to include resilience clauses and contingency plans.
• Evaluate vendor capabilities for operational security compliance.

Anti-Money Laundering Authority (AMLA) Regulation

The AMLA Regulation ¹² represents a major step in unifying anti-money laundering efforts across the EU. A centralized authority with supervisory powers will ensure a harmonized approach. Financial institutions must adjust policies to meet these new standards ahead of the July 1, 2025, deadline ¹².

Suggested Actions for Procurement:

• Reassess relationships with high-risk suppliers.
• Strengthen transactional transparency in vendor agreements.
• Ensure onboarding processes align with anti-money laundering standards.

Payment Services Directive 3 (PSD3)

Expected to roll out in 2025, PSD3 will refine the EU’s payment services framework, addressing emerging digital payment challenges while enhancing security, competition, and consumer protection ¹³. Stakeholders, including banks and fintechs, are advised to begin preparing now to adapt to the updated regulations.

Suggested Actions for Procurement:

• Renegotiate terms with payment processors to meet enhanced security standards.
• Prepare for new compliance audits and data-sharing requirements.
• Adjust contracts to align with PSD3 regulations.

Example: PayPal updated its security protocols and customer authentication processes to comply with the Payment Services Directive 2 (PSD2), enhancing consumer protection ¹⁴. 

Potential Consolidation of ESG Reporting Frameworks

The European Commission ¹⁵ is proposing a 25% reduction in reporting obligations by mid-2025 to streamline the overlapping requirements of CSRD, the EU Taxonomy Regulation, and CS3D. If implemented, this could significantly ease the compliance burden for businesses ¹⁶.

Suggested Actions for Procurement:

• Simplify internal reporting processes to align with streamlined ESG requirements.
• Remain agile to quickly adapt to changes in reporting standards.
• Reduce redundancy in supplier data collection and management.

United Kingdom

Critical Third Party (CTP) Regime

Set to launch in January 2025, the CTP regime focuses on enhancing the resilience of the UK financial system by overseeing third-party service providers that are deemed critical to its stability ¹⁷. Businesses designated as CTPs must prepare to meet new regulatory standards under the Financial Services and Markets Act 2023.

Suggested Actions for Procurement:

• Enhance vendor performance monitoring for critical service providers.
• Develop contingency plans for potential vendor disruptions.
• Align contracts with resilience expectations under the new regime.

Procurement Act

On 24 February 2025, a new public procurement regime will be brought into effect by the Procurement Act 2023. Once in place, the Act will mark a radical change in procurement regulations for England, Wales, and Northern Ireland – simplifying processes for both public sector organizations and their suppliers, opening new opportunities for businesses that adapt strategically ¹⁸.

Suggested Actions for Procurement:

• Adapt tendering processes to comply with updated public procurement rules.
• Align proposals with the new framework to remain competitive for public contracts.
• Streamline supplier collaboration to meet compliance expectations.

United States

Outbound Investment Regulations

From January 2, 2025, there will be new compliance requirements on U.S. businesses regarding investments in certain key technology areas (quantum technologies, semiconductors, and AI) that involve Chinese interests. Companies must conduct due diligence to avoid severe penalties for non-compliance ^{19, 20}.

Suggested Actions for Procurement: 

• Conduct due diligence on vendor relationships involving restricted technology areas.
• Reassess procurement processes for compliance with outbound investment restrictions.
• Avoid penalties by ensuring supplier practices meet regulatory standards.

Federal Communications Commission (FCC) Lead Generation Regulations

Set to launch on January 27, 2025, these regulations require telemarketers to obtain prior express written consent from consumers for each individual seller before making calls or sending texts ²¹. The consent must be specific and cannot be generalized across multiple sellers. Additionally, all communications must be logically and topically related to the context in which consent was granted. Sellers are responsible for ensuring compliance and must maintain records of consent, which adds to their accountability.

Suggested Actions for Procurement: 

• Evaluate vendors for compliance with specific consent documentation requirements.
• Maintain detailed records of consumer consent for telemarketing activities.
• Ensure contracts include clauses addressing FCC compliance obligations.

Revised Capital Requirements for Banks (Basel III)

Expected in 2025, the Federal Reserve is proposing changes to capital requirements for large banks, which will affect how they manage their capital structures and risk profiles ^{22, 23}. These changes aim to enhance the resilience of the banking system by increasing the amount of capital that banks must hold against their risk-weighted assets.

Suggested Actions for Procurement: 

• Monitor shifts in lending policies affecting procurement financing.
• Adapt sourcing strategies to mitigate risks from changing bank capital structures.
• Partner with financially resilient suppliers to ensure long-term stability.

Regulatory frameworks evolve and procurement teams need more than just awareness. Without efficient systems in place, navigating these changes can lead to delays, inefficiencies, and operational risks. By leveraging ORO, a no-code orchestration platform designed for procurement, organizations can:

• Quickly adapt workflows to align with new regulations.
• Streamline supplier management for better compliance and transparency.
• Maintain resilience in the face of uncertainty.

Preparing now and preparing for an unexpected future will not only ensure compliance but also position procurement teams as strategic enablers of operational efficiency and sustainability.

Disclaimer:

This article is not intended to be an exhaustive discussion of every single regulation. It is intended to be informative and does not constitute specific legal advice for any organization. The regulations mentioned in this article are subject to change with the evolving nature of the regulatory landscape.