For decades, the U.S. dollar has been the backbone of global commerce—used in the majority of trade contracts, commodity pricing, and financial systems. But recent geopolitical, macroeconomic, and technological shifts suggest that the world may be entering a long-term structural decline in dollar dominance. While this change may unfold gradually, its implications for procurement—particularly global sourcing and sustainable supply chains—are profound. This article explores the risks, adjustments, and strategic opportunities procurement leaders should prepare for. The Dollar’s Waning Influence: What’s Driving the Shift Three reinforcing forces are eroding the dollar’s dominance: Global De-dollarization : Countries such as China, India, Russia, and others are increasingly settling trade in local currencies or Central Bank Digital Currencies (CBDCs). BRICS+ and bilateral trade alliances are reducing their reliance on USD. U.S. Fiscal Overhang : Persistent deficits, rising debt, and high real interest rates are leading investors to question the long-term value of holding dollar-denominated assets. Neo-Mercantilist Trade Blocs and Sanctions : The global rise in tariffs, commodity nationalism, and cross-border capital controls is incentivizing the formation of alternative payment systems and local-currency trade deals. Together, these trends are quietly shifting the foundation of how global commerce is priced, hedged, and structured. Why Procurement Should Care: Practical Risks and Realignments Procurement teams will feel the impact of this shift across five core dimensions: 1. Contracts and Currency Clauses Procurement contracts historically priced in USD will become riskier. As the dollar weakens, price stability will erode, especially for long-term capital equipment or multi-year sourcing deals. Action : Build dual-currency clauses or pricing linked to a currency basket (e.g. USD/EUR/CNY) to hedge volatility. Introduce escalation mechanisms based on FX corridors or commodity-linked indices rather than pure CPI. 2. Volatile Purchasing Power A weaker USD could increase the cost of imports for U.S. and EU companies, particularly in categories like energy, minerals, and manufactured goods sourced from Asia or Africa. Action : Conduct scenario analysis on FX-linked inflation for top categories. Consider reshoring or nearshoring not just for resilience, but for cost certainty. 3. Hedging and Treasury Strategy Currency hedging becomes more expensive and less accessible as forward points widen for emerging market currencies. This complicates price predictability in supply agreements. Action : Partner closely with treasury to assess natural hedging (matching local payables and receivables) and work with local banks to expand access to non-dollar liquidity. 4. Tariffs, Carbon Pricing, and Geo-Economic Complexity The interplay between FX rates and tariffs becomes more volatile. A falling dollar could offset the impact of some tariffs for exporters, while amplifying costs for importers. Action : Simulate scenarios that model how currency movements interact with: EU CBAM or other carbon tariffs Localization incentives (e.g. IRA credits) Future BRICS-backed carbon border fees or regional green tariffs 5. Data, Audit, and Financial Reporting Shifts Scope 3 emissions reporting often relies on spend data expressed in USD. A devalued USD can distort emission intensity ratios and audit readiness. Action : Ensure dual-currency tracking for all Scope 3 data. Build currency-adjusted baselines to enable accurate year-on-year comparison. Sustainable Procurement: More Exposed, But Also More Strategic Procurement functions pursuing decarbonization will face unique challenges and opportunities as the dollar declines: Pricing Green Inputs : Many sustainable materials—solar panels, electrolyzers, recycled polymers—are priced in USD or RMB. Volatility complicates cost projections and ROI models for low-carbon tech. Carbon Markets and FX : Most voluntary carbon credits (VCMs) are denominated in USD. As more countries launch their own carbon tax schemes, FX risk will become embedded in carbon pricing comparisons. Sustainable Finance : ESG-linked supply chain finance is largely anchored in dollar-based liquidity pools. Currency shifts may prompt the emergence of new regional ESG financing markets in EUR, CNY, or AED. Opportunity : Localization strategies now offer a dual dividend—reduced Scope 3 emissions and FX risk. Procurement teams can rebalance portfolios toward nearshore, lower-carbon, and lower-volatility sourcing. Strategic Moves for CPOs in a Post-Dollar World To navigate the dollar drift effectively, CPOs should take a five-part approach: Re-architect contracts Move from fixed USD terms to indexed pricing with FX guardrails Include carbon clauses tied to international pricing benchmarks (e.g. EU ETS, China ETS) Refresh risk dashboards Incorporate FX-tariff interaction modeling Track dual exposure to FX and carbon intensity in key supply chains Deepen supplier diversification Add redundancy not just by geography, but by currency exposure Prioritize suppliers with emissions data in their native currency Link procurement with treasury and sustainability Establish a joint working group across finance, procurement, and ESG Co-create reporting formats that satisfy both audit and decarbonization goals Embrace scenario planning Prepare for abrupt accelerations in de-dollarization—such as a BRICS CBDC launch, oil contracts settled in RMB, or FX sanctions escalation Conclusion: From Vulnerability to Value Creation A structural decline in the U.S. dollar is no longer a fringe scenario. For global procurement leaders, this presents not only a risk to manage—but a catalyst to redesign supply chains that are more localized, circular, and low-carbon. The future of sustainable procurement is multi-currency, digitally transparent, and carbon-accountable. The organizations that adapt first will be those that treat this monetary transition as a strategic opportunity—not just an economic shock.

How U.S. Tariffs Could Trigger a Hidden Win for the Climate

Unlocking Investment for Green Growth

How a New Zealand Sustainable Finance Taxonomy can drive Investment into Natural Capital.

As of February 2025, the procurement landscape is undergoing significant transformation, driven by technological advancements and a heightened focus on sustainability. These changes are reshaping traditional practices, particularly in procurement technology and category management. Advancements in Procurement Technology The integration of Artificial Intelligence (AI) and automation has become a cornerstone of modern procurement strategies. AI-driven tools are automating repetitive tasks, enhancing decision-making processes, and providing predictive analytics to foresee market trends and supply chain disruptions. This shift towards digital procurement is not only improving efficiency but also fostering innovation in supplier relationships. Notably, e-sourcing platform spending is projected to grow at a compound annual growth rate of 14% by 2025, underscoring the increasing reliance on digital tools in procurement strategies. Moreover, the adoption of cloud-based solutions offers flexibility and scalability, enabling procurement teams to access real-time data and collaborate seamlessly across geographies. This transition to digital platforms is eliminating bottlenecks associated with manual processes, thereby enhancing operational efficiency. Evolution of Category Management Category management is evolving from a traditional focus on cost savings to a more strategic role emphasizing value creation and innovation. The infusion of AI and data analytics allows category managers to gain deeper insights into consumer behavior, optimize product assortments, and anticipate market shifts. This data-driven approach facilitates more informed decision-making and strategic planning. Additionally, the role of category managers is expanding to include thought leadership and value chain analysis. By engaging in collaborative initiatives such as hackathons, category managers can foster innovation and co-create solutions with suppliers and other stakeholders. This collaborative approach not only drives product and service improvements but also strengthens supplier relationships. Sustainability and Circular Procurement Sustainability has become a pivotal aspect of procurement strategies. Organizations are increasingly adopting circular procurement practices, focusing on creating closed-loop systems that minimize waste and promote the continual use of resources. This approach not only addresses environmental concerns but also enhances supply chain resilience and efficiency. Furthermore, there is a growing emphasis on Environmental, Social, and Governance (ESG) considerations in supplier selection. Companies are prioritizing partners who demonstrate sustainable practices, such as reducing waste, utilizing renewable energy, and upholding ethical labor standards. This alignment with ESG principles ensures that procurement decisions resonate with stakeholders' expectations and regulatory requirements. Conclusion The convergence of advanced technologies and a commitment to sustainability is redefining procurement and category management practices. By embracing AI, automation, and circular procurement principles, organizations can enhance efficiency, foster innovation, and contribute to a more sustainable economy. Category managers, empowered by these technological advancements, are poised to take on more strategic roles, driving value and leading transformative initiatives within their organizations. 

With supply chains responsible for around 75% of corporate emissions, reducing Scope 3 emissions has become essential, driven by regulatory demands, investor scrutiny, and customer expectations. This guide is a hands-on resource for reducing supply chain emissions. It covers strategies, frameworks, and real-life examples to help you tackle the challenges of managing Scope 3 emissions across the entire value chain. You’ll find insights into building strong supplier partnerships, creating tailored frameworks, and using incentives to align emissions goals with broader business priorities. Case studies from CBRE, Accor, and Siemens show how effective supplier engagement can make a difference.  Read to learn more on: Understanding and overcoming Scope 3 challenges Breaking down supplier barriers to decarbonisation Collaborating with suppliers for a shared decarbonisation journey Harnessing data transparency and technology Defining and tracking key metrics for success