ASIA is a critical source of global commodities such as rubber, palm oil, cocoa, and timber, playing a pivotal role in shaping international trade and business across various sectors, including manufacturing, consumer goods, automotive, and construction. The nominal value of the commodities market in Asia is currently projected to reach some US$32.17 trillion, reflecting a robust growth trajectory with a projected annual growth rate of 2 per cent from 2025 to 2029.
Yet, despite its economic and environmental significance, the commodities industry has lagged in keeping up with evolving ESG (environmental, social, and governance) expectations and sustainability trends. Why? The commodity industry has a much more complex ecosystem with more stakeholders – from smallholder farmers whose livelihoods depend on their trade, to large commodity giants and multinational corporations. The opaque nature of these supply chains, combined with cost efficiency being prioritised over sustainability historically, has made meaningful change challenging to implement. But, with mounting regulatory pressures, heightened consumer awareness, and increased investor scrutiny, businesses must act now to integrate sustainability into their operations.
This transformation is long overdue. Rather than focusing solely on short-term profits, companies in the commodities industry have begun to shift towards a model that integrates ecological restoration, community development, and economic stability. Fostering more resilient supply chains can help create a global economy that is better equipped to withstand market fluctuations, supply chain disruptions, and environmental challenges such as climate change. Enabled by technology that enhances transparency, supports ethical sourcing, and promotes regenerative practices, this shift empowers organisations to achieve long-term sustainability and profitability, and remain future-ready.
Impact of commodities on global trade and the rise of ESG
Extractive industries contribute significantly to environmental degradation, including deforestation, carbon emissions, and habitat destruction. Historically, lax regulations, limited consumer awareness, and prioritising cost efficiency over sustainability have allowed industries to sideline ESG concerns.
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However, this is changing. A combination of stricter regulations such as the European Union Deforestation Regulation, rising consumer demand for accountability, and increased visibility of supply chain practices through digital tools has created an unprecedented urgency for change. Companies that fail to address ESG risks now face significant threats to their reputation, market access, and financial performance.
Technology as a catalyst for supply chain transformation
Beyond accountability, ESG and traceability principles offer tangible business benefits. By leveraging advanced technologies and sustainable practices, companies can reduce waste, improve resource allocation, and streamline logistics. This strengthens the bottom line while embedding sustainability into core business strategies.
The longstanding problem of fragmentation in supply chains can be addressed by modernisation through innovative technologies that enhance efficiency, transparency, and data-driven decision-making, revolutionising how businesses operate. Companies are increasingly integrating advanced digital tools like artificial intelligence (AI) and machine learning to gather and analyse vast amounts of real-time data, optimising every facet of the supply chain.
Traceability technologies provide businesses with the ability to track products and materials through every stage of production, processing, and delivery. By leveraging real-time data and blockchain technology, industries handling commodities such as rubber, palm oil, and cocoa can improve transparency, reduce fraud, and enhance supply chain accountability – essential for meeting growing regulatory and compliance demands and creating a more resilient and responsible industry model.
For example, the rubber industry has undergone significant transformation in recent years, with a growing focus on transparency and sustainability. Its progress offers a valuable blueprint for other commodity sectors navigating similar ESG and regulatory challenges. The adoption of digital traceability and compliance platforms has enabled greater accountability, operational efficiency, and smallholder inclusion. This shift illustrates how once-impossible transparency in commodities is now becoming a reality through regulation-driven digitalisation, with technology helping stakeholders align with evolving regulatory expectations and ethical sourcing standards.
Crucially, the issues facing rubber – fragmented supply chains, rising compliance demands, and the need for transparent sourcing – are mirrored across other commodity sectors such as palm oil, cocoa, and coffee, and these industries are following suit. In the palm oil sector, platforms such as the Roundtable on Sustainable Palm Oil’s digital systems are being used to verify sustainable sourcing. In cocoa, initiatives such as the World Cocoa Foundation’s Cocoa and Forests Initiative and digital traceability systems are helping companies monitor deforestation risks and trace beans back to specific farms. Fragmented supply chains, regulatory pressure, and the need for transparency are not unique to one sector but rather a fundamental issue across the board, and businesses must turn to digital solutions that can adapt across multiple commodity sectors, ensuring compliance with evolving regulations while driving transparency and efficiency.
The key to overcoming these hurdles lies in sector-wide digital transformation, where traceability and compliance platforms help ensure sustainability across different commodities. By fostering collaboration, digital transformation, and promoting regenerative practices as the new standard rather than an exception, companies can pave the way for an industry where everyone is committed to building a future for the next generation.
Empowering smallholder farmers through digital inclusion
Technology’s role in ensuring supply chain transparency extends beyond corporate compliance – it also creates pathways for smallholder farmers, which form the backbone of the agri-commodity supply chain, to integrate into global markets. For too long, smallholders have historically been excluded from decision-making processes due to systemic challenges such as market volatility, limited financial access, and outdated agricultural practices. Today, digital tools are helping to bridge this gap by providing education, market insights, and financial resources to ensure more inclusive and equitable participation.
By integrating smallholder farmers into global digital networks via access to digital trade platforms, financial tools, and sustainability certifications, commodity industries can create systems that connect regenerative farms with buyers, ensuring that sustainable products are valued and rewarded in the marketplace. This approach secures a sustainable future for production and ensures a stable supply for companies, which is crucial in a world where commodity scarcity is a growing concern, especially amid perennial challenges such as climate change.
Charting the path forward – from sustainability to regeneration
Ultimately, the goal is not just sustainable production but a regenerative approach, where commodity industries actively contribute to ecological restoration, community development, and the stability of the global economy. This vision requires a fundamental shift in supply chains, where technology drives transparency, empowers smallholders, and supports regenerative practices. Digital platforms and advanced traceability technologies can transform commodity trading from extractive models to collaborative, value-driven networks that safeguard human and environmental interests.
What’s next? Businesses must start by assessing their commodity supply chain and how they source raw materials, and identifying opportunities to integrate traceability technologies. They should invest in platforms that can grow with evolving regulations and collaborate with partners across the supply chain to ensure shared accountability. Policymakers and industry bodies also have a critical role to play – through grants, regulatory clarity, and capacity-building initiatives – to ensure smallholders and enterprises alike can participate meaningfully in this transformation.
By integrating advanced technologies, robust governance, and a commitment to continual improvement, these industries can become catalysts for positive change, proving that economic success and environmental responsibility are interconnected, not mutually exclusive.
The writer is chief executive officer of Agridence