Retailers have always juggled a complex supply chain. But in 2025, it is no longer just about cost and efficiency. With new ESG reporting rules like the EU’s CSRD, strengthened modern slavery regulations demanding detailed due diligence, and increasingly vocal consumer expectations for transparent and ethical sourcing, the pressure on retail legal teams has intensified.

This piece looks at how in-house lawyers in the retail sector can get ahead of these risks without becoming the bottleneck.

1. The regulatory squeeze is tightening

‍In the past year, UK businesses have faced:

• Stricter obligations under the Modern Slavery Act, including the expectation of detailed due diligence and public statements.
• The rise of ESG disclosure regimes like the EU’s Corporate Sustainability Reporting Directive (CSRD), which has implications for UK retailers with EU operations or suppliers.
• Increased enforcement and reputational risk around greenwashing claims.

Keeping up with these obligations is tough when the supply chain spans multiple countries and tiers.

2. Why this is more than a compliance exercise

‍Legal leaders know it is not just about ticking boxes. Failures in supply chain governance can mean:

• Delays and disruption when suppliers fall foul of local laws.
• Brand damage if labour abuses or environmental breaches hit the headlines.
• Financial penalties or exclusion from key markets.

A joined-up approach can actually become a commercial advantage - by building trust with customers, regulators, and investors.

3. Where legal teams can focus their efforts

• Risk mapping: Start by identifying your most critical suppliers and the regions that pose the biggest risks for modern slavery, corruption, or environmental harm.
• Contractual controls: Update supplier agreements to include robust ESG obligations, audit rights, and termination provisions.
• Training the business: Arm procurement and operations colleagues with practical guidance on spotting red flags early.
• Reporting readiness: Work with finance and sustainability teams to prepare for ESG disclosure requirements.
• Technology: Consider supply chain mapping and contract management tools that make tracking obligations less of an admin burden.

4. How to stay credible and pragmatic

‍It is easy to get stuck in the weeds of drafting perfect clauses or reviewing every supplier. Instead, GCs in retail are taking a risk-based, business-minded approach:

• Focus resources where the impact is greatest.
• Be transparent about limitations and how risks are being managed.
• Push for cross-functional ownership so Legal is not carrying the load alone.

Final thought

‍Retail supply chains are only getting more complex. But by embedding a pragmatic risk-based approach now, in-house legal teams can help their businesses stay ahead of the ESG curve - and avoid nasty surprises. In doing so, Legal can step into the role of a true business enabler rather than being seen only as a risk mitigator.