The PACE Perspective | Navigating Global Volatility: What It Means for Your Due Diligence Program

Global trade volatility is reshaping how supply chains operate and putting new pressure on due diligence programs. In this episode of The PACE Perspective Podcast, we explore what’s really happening on the ground, where programs start to break down, and how organizations can adapt through smarter, more targeted, and more engaged approaches to due diligence.

Follow us on- Intertek's Assurance In Action ||  Twitter || LinkedIn.

Transcript

Welcome to The PACE Perspective Podcast, where we bring practical insights from real-world supply chain challenges and what that means for responsible sourcing and due diligence programs. I’m Stacy Gibbs, leading Intertek’s Program Advisory and Collaborative Engagement practice (also known as PACE). 

So, today, we’re digging into something that’s top of mind for almost every client we’re working with and that’s global trade volatility.  

I’m joined by Kevin Fromme, Director of PACE, who is instrumental in supporting our client programs. Kevin, thanks for being here with me. 

Kevin: 

Thanks for inviting me, Stacy. This is definitely an important topic we’re seeing that’s affecting almost every client right now.  

Stacy: 

Well let’s start with what’s actually happening. There’s a lot in the headlines around tariffs and logistics disruptions. But when we talk to our clients, the impact they’re seeing is a bit more nuanced. 

So, what are you seeing on the ground? 

Kevin: 

It’s really a combination of pressures happening all at once. We’re seeing longer and less predictable lead times, suppliers are dealing with unexpected cost increases, and in some cases, shifting production locations just to manage risk. 

All these factors are starting to impact how suppliers respond to due diligence activities. 

Stacy: 

Right. And that’s the key point. This isn’t just a logistics issue. It’s also a program performance issue. Due diligence doesn’t just stop… but it does become harder to execute effectively in times like this. 

So where do programs start to feel that strain and what are the first signs they’re not adapting? 

Stacy: 

So where do programs start to feel that strain and what are the first signs they’re not adapting? 

Kevin: 

The biggest one is missed timelines. We are seeing delays in audit scheduling, slower corrective action plan submission and closure, and generally, less responsiveness from suppliers.  

And it’s not necessarily a lack of commitment. In many cases, suppliers are just trying to deal with operational disruption. 

Stacy: 

That’s an important distinction. Supplier non-responsiveness is often interpreted as disengagement, when it might actually be related to these challenges we’re covering today. And sometimes it’s even a capacity issue where they just don’t know what to do... 

Kevin: 

Exactly. A sign that a program is not adapting is when their risk priority doesn’t evolve.  

Some programs may still be treating suppliers the same way they did a few years or a few months ago, even though the risk landscape has dramatically changed. 

Stacy: 

And that’s where programs lose effectiveness. If everything is a priority... well, then nothing is truly prioritized.  

And in a volatile environment, that becomes a real issue. 

Stacy: 

So let’s shift into what companies should be doing differently. At PACE, we’ve been helping clients adjust their programs without losing integrity or control. 

What are the most impactful changes you’re seeing? 

Kevin: 

The first is revalidating supplier risk. Most clients already have a model, but it’s not actually reflecting the current reality today. A supplier that was moderate risk before may be critical now. 

Stacy: 

Yes, and this is where we guide our clients to step back and reassess what really matters right now, where the dependencies are, and where more active oversight is necessary. 

Kevin: 

The second is adjusting timelines. We’re seeing the need for more flexibility in audit scheduling, CAP closure, and overall program timelines in general. 

Stacy: 

And this is really important. This isn’t about lowering standards. It’s about making execution realistic.  

If timelines aren’t achievable, they don’t strengthen your program. They just create a lot of noise around “past due” vs actual risks. 

Kevin: 

Another key shift is being more proactive in engagement with suppliers. Instead of reacting to delays, clients are adjusting program activity timelines and trying to understand potential constraints upfront. 

Stacy: 

This is one of the biggest mindset shifts. Due diligence isn’t just monitoring. It’s engagement.  

And in this environment, engagement is what keeps these programs moving. 

Kevin: 

We’re also seeing more focus on cost pressure and commercial dynamics. Suppliers are taking on additional costs, which could lead to potential Human Rights issues or could impact their ability to invest in things like sustainable remediation. 

Stacy: 

And this is where responsible sourcing due diligence and commercial strategy intersect. If we ignore that reality, we risk designing programs that won’t actually work in practice. 

So, stepping back, do you see this as being temporary or something more structural. 

Stacy: 

So, stepping back, do you see this as being temporary or something more structural. 

Kevin: 

I really think it’s structural. Programs that succeed and drive the required outcomes are the programs that are risk-based but flexible. This allows them to adapt quickly where a static program model is becoming less realistic every day. 

Stacy: 

I agree. We’re seeing a shift from compliance-driven models to resilience-driven programs and that aligns closely with OECD expectations around continuous risk identification and improvement. 

Stacy: 

So, if I had to leave with one takeaway: Volatility doesn’t reduce the need for due diligence. It increases the need for smarter, more targeted, and more engaged due diligence. 

And that’s where PACE supports our clients in helping them adapt their programs in a way that’s both practical and aligned with expectations. 

Kevin, thanks again for joining me. I appreciate you being here. 

Kevin: 

Thanks, Stacy. 

Stacy: 

And to our listeners, we’ll continue to bring you perspectives from what we’re seeing across global programs and until next time, thanks for listening to The PACE Perspective Podcast.