Key takeaways:

• ESG requirements are continually evolving around the world, creating a regulatory headache as global organisations try to track various reporting requirements.
• Demand for supply chain sustainability software is steadily on the rise, with it expected to become a US$6.8 billion industry by 2028.
• Meeting ESG and sustainability goals requires organisations to gain greater visibility into their supply chains.
• Supply chain sustainability software has to meet a wide range of needs, including data collection and reporting, supply chain ESG risk management and supplier engagement.
• Avetta was named a leader in the Verdantix Green Quadrant: Supply Chain Sustainability Software 2024 thanks to exceptional capabilities and strong momentum metrics.

The growing demand for supply chain sustainability software

Independent research firm Verdantix recently released its report “Green Quadrant: Supply Chain Sustainability Software 2024”, naming Avetta a leader. The report compares 15 of the most prominent supply chain sustainability software vendors and provides scores based on their capabilities and momentum. The report aims to help corporate decision-makers in sustainability, procurement, supply chain, risk and operations to understand the state of the market for supply chain sustainability software and make informed purchasing decisions.

Around the world, environmental, social and governance (ESG) factors are putting pressure on organisations to report on their supply chains. Sustainability goals are no longer just for future-thinking, green organisations, but are increasingly becoming the norm worldwide. Reporting on sustainability in the supply chain is complicated and not standardised, so it requires a solution that improves the visibility of both the supplier network and the hidden risks it brings.

The benefits of a sustainable supply chain are not limited to tax credits or avoiding regulatory fines, but also include building a more resilient supplier network and loyal consumer base. With so many seeing the benefits of addressing risk and improving organisational visibility, it’s no wonder that Verdantix sees the supply chain sustainability software market growing from US$1.7 billion in 2023 to US$6.8 billion by 2028.

Addressing supply chain sustainability challenges

In its report, Verdantix broke down the challenges that teams face and how supply chain sustainability software helps them to overcome them. While it’s easy to turn to greenhouse gases and emissions, the right software can help address much more than sustainability initiatives. Here are a few areas that the software platforms were evaluated on:

• Identifying and mitigating risk: Around the world, teams may face different regulatory requirements. Keeping track of these, especially for a global organisation, is a significant pain point. Add in geopolitical events, labour disputes and extreme weather, and your risk team can be overwhelmed on their own. With the right solution, it not only becomes easy to gain visibility into these risks, but it allows you to mitigate them and strengthen your supply chain.
• Easier data collection and reporting: By ditching spreadsheets and Word documents for powerful, integrated software, teams gain greater visibility into both data collection and reporting. Having a central repository for key ESG data ensures that teams are working with the most up-to-date information and can share that information across departments with ease, helping to break data silos.
• Improved supplier engagement: Organisations depend on suppliers to gather ESG and sustainability data, but inconsistent information requests and various third-party assessments create "supplier fatigue", making it harder to enhance supply chain sustainability. The right software addresses this by offering scalable systems and engagement programs that ensure data accuracy and boost supplier awareness of ESG reporting responsibilities.
• Monitoring ESG performance: With so many ESG regulations being created globally, it can be hard to understand how your organisation is performing. The right software not only tracks ESG performance against internal sustainability goals, but can also help provide industry benchmarks and allow you to understand how you stack up in your industry.

Innovating for the future of supply chain sustainability

Supply chain sustainability software is a field ripe with innovation. Some providers offer advanced capabilities that are making it easier every day to manage and mitigate risks, including real-time monitoring of supplier compliance, climate risk assessments and scenario analysis, helping to forecast risk and give greater visibility into operations.

As AI continues to dominate headlines, it has found a foothold in supply chain sustainability software. Providers are leaning into AI-powered data analysis and machine learning to improve supply chain visibility and decision-making. Automating processes is also helping to eliminate human error and providing employees with more time to focus on more value-adding activities for their organisations.

Another way in which sustainability vendors are innovating is by forming partnership ecosystems to enable comprehensive ESG management. Partnerships such as the one between Avetta and Workiva Carbon allow us to support suppliers’ management and reporting of carbon emissions. Our alliance with Cloverly helps our network of 130,000 in their quests to become carbon neutral.

Key considerations for selecting a supply chain sustainability solution

With so many solutions on the market, finding the right one is both challenging and time consuming. A solution should be able to meet you wherever you are on your ESG journey and help you achieve your sustainability goals.

A large piece of the supply chain puzzle is supplier engagement. Organisations are relying on their suppliers to gather and report accurate ESG and sustainability data. When a supplier is inundated by these requests, along with additional third-party assessments, they can begin to feel overwhelmed, and supplier fatigue can set in. The right supply chain sustainability software mitigates these challenges by offering structured engagement programs that streamline data collection, improve data accuracy and standardise reporting processes.

Other important factors to consider are scalability and user adoption. The ability to implement one solution across a global organisation, including addressing risks outside sustainability, such as cybersecurity, provides the best chance for success. Doing so allows for greater collaboration and visibility into mitigating risks. Combining this with a user-friendly platform is key to strong adoption and long-term success when evaluating supply chain sustainability solutions.

The Verdantix Green Quadrant methodology

Verdantix Green Quadrant: Supply Chain Sustainability Software 2024 provides a structured assessment that helps compare supply chain sustainability software providers. To conduct its assessment, Verdantix uses clearly defined criteria that are based on research, surveys and interviews with buyers to ensure a buyer-focused approach. The transparency and integrity that Verdantix emphasises provides an objective evaluation of the marketplace.

To score software providers, Verdantix uses two dimensions and a wide array of sub-criteria, including:

• Capabilities
  • Data acquisition and architecture
  • Risk identification and mitigation
  • Supplier engagement, training and management
• Momentum
  • Vision and strategy
  • Partnerships
  • User adoption

Each sub-criteria is given a score on a scale of 0 to 3, with a 3 indicating market-leading functionality. Those scores are combined to form overall ratings for Capabilities and Momentum. Based on a vendor’s Capabilities and Momentum scores, they are placed on a grid indicating that they are either a Challenger, Innovator, Specialist or Leader.

Avetta named a leader in supply chain sustainability software

In its November 2024 report, Verdantix named Avetta a leader in supply chain sustainability software. This honour is thanks to Avetta’s world-class capabilities and continued momentum in helping ESG leaders around the world reach their goals.

According to the report, “Avetta scored 3.0/3.0 for third-party risk management, thanks to its ability to offer customers granular insights into suppliers' ESG risk and validate performance using AI and sustainability audits. For example, Avetta’s ESG mapping patent combines ML (machine learning) and human expertise to enhance visibility across the supply chain and adapt suppliers’ assessments to fit their risk profiles. This reduces supplier fatigue and enables customers to prioritise relevant questions based on the buyer and on the supplier’s unique attributes relating to industry, location and ESG maturity.”

On top of providing insights into suppliers’ sustainability performance and risk exposure, the report found Avetta to have evidence of market-leading functionality in:

• Third-party risk management
• Supplier engagement, training and management
• Supplier size
• Customer success
• Supplier success
• User adoption

In addition to making it easier to monitor supplier sustainability performance, Avetta offers a suite of supply chain risk management solutions that encompass safety, business and cyber risk. Learn more about how Avetta can support your sustainability reporting efforts and ensure the resilience of your supply chain.