As we bring in the new year, 2030 emissions reduction targets are transitioning from long or mid-term to near-term. This increasing urgency to fulfil public commitments is increasing pressure to calculate, disclose, and reduce emissions. The complexity of Scope 3 emissions data that encompasses the entire value chain, continues to challenge organisations – many of which still rely on broad estimates to measure their carbon footprint. These inaccuracies hinder effective decision-making and limit the impact of sustainability initiatives. Given these challenges, procurement emerges as a pivotal starting point for reducing carbon emissions and achieving sustainability targets. 

By fostering partnerships with sustainable suppliers and prioritising accurate Scope 3 emissions data, companies can embed environmental accountability throughout their value chains, paving the way for more precise carbon tracking and impactful emissions reductions.

Tackling Transparency in Supply Chains

Supply chain complexity and inconsistent data practices make achieving emissions transparency particularly challenging. Traditional methods often inflate carbon footprints, complicating efforts to make informed sustainability decisions. According to recent research, one-third of procurement leaders cite data accuracy as a significant obstacle to measuring Scope 3 emissions.

Four methodologies are commonly used for calculating Scope 3 emissions:

1. Spend-based: Relies on procurement spending data but risks overestimating emissions as expenditures rise, even when actual emissions remain unchanged.
2. Average data: Bases calculations on the volume of goods or services consumed, offering better accuracy than spend-based methods but lacking the specificity required to capture supply chain intricacies.
3. Supplier-specific data: Utilises primary data from suppliers for more precise calculations but demands significant engagement and collaboration.
4. Hybrid methods: Combines primary and secondary data, striking a balance between accuracy and feasibility by leveraging supplier-specific data where possible and supplementing it with industry averages.

To enhance data accuracy, businesses should prioritise incorporating primary supplier data into their reporting processes. Though labour-intensive and requiring specialised skills, this approach delivers a clearer picture of supply chain emissions, bolstering decision-making and resilience.

Building Stronger Supplier Partnerships for Sustainability

Effective Scope 3 emissions management begins with embedding sustainability into procurement processes. From supplier selection to contract negotiation, prioritising partners committed to environmental responsibility and accurate data reporting can reduce overall emissions and foster collaborative relationships.

Segmenting suppliers by their data maturity and emissions capabilities allows businesses to allocate resources more effectively:

• High-maturity suppliers: Capable of providing verified data across Scopes 1, 2, and 3, along with product carbon footprints (PCF).
• Medium-maturity suppliers: May require support to meet emerging data standards.
• Low-maturity suppliers: Benefit from training, educational resources, and incremental steps toward emissions tracking and reporting.

This targeted approach ensures advanced data requests are directed at capable suppliers while supporting others in their journey towards greater transparency.

Harnessing Collaborative Industry Initiatives

Sector-wide and cross-industry collaborations play a crucial role in standardising Scope 3 data practices. Initiatives like the Partnership for Carbon Transparency (PACT) provide shared reporting methodologies, simplifying the process for suppliers and procurement teams.

Sector-specific alliances, such as Together for Sustainability in the chemicals industry, help align Scope 3 standards, reducing discrepancies and enabling consistent supplier comparisons. These initiatives streamline reporting processes, enhance data quality, and drive systemic change aligned with global sustainability goals.

Decoding the Regulatory Landscape for Scope 3 Emissions

Global regulatory shifts demand precise, verifiable carbon emissions data, with Scope 3 emissions increasingly coming under scrutiny. The EU Corporate Sustainability Reporting Directive (CSRD), for instance, obligates large EU firms and their value chains to disclose detailed carbon data, including Scope 3 emissions. Non-EU companies are also feeling the ripple effects, as stakeholders worldwide demand heightened sustainability transparency.

This evolving regulatory environment leaves no room for estimated or incomplete data, making the need for precise Scope 3 reporting a critical factor for maintaining global market competitiveness.

The Strategic Value of Sustainable Procurement

Embedding Scope 3 data practices within procurement not only positions organisations to meet their near-term public commitments but also strengthens supplier relationships, mitigates climate risks, and bolsters organisational resilience in unstable economic conditions.

As primary data becomes central to achieving emissions reduction targets, procurement emerges as a strategic lever for driving the low-carbon transition, delivering environmental and long-term business benefits.

By making procurement a core tool for carbon management, businesses can foster accountability across supply chains, build robust partnerships, and ensure their sustainability efforts are both measurable and impactful.

In the pursuit of a sustainable future, procurement stands as the critical link between ambitious goals and actionable outcomes.

Today’s Chief Procurement Officers (CPOs) are under unprecedented pressure to ensure their organisations meet increasingly stringent environmental, social, and governance (ESG) reporting requirements. 

As global regulations tighten and stakeholders demand greater transparency, the quality and integrity of ESG data have become critical. However, many CPOs grapple with a significant obstacle: fragmented data scattered across disparate systems. 

This data disarray threatens the accuracy of ESG reporting and poses substantial risks to compliance and reputation. To rise to the challenge, CPOs must take decisive action. They need to find ways to unify and streamline their data management processes, transforming fragmented ESG data into a trusted, strategic asset that drives sustainable business practices and builds stakeholder trust.

The stakes are high. Failure to do so could lead to serious repercussions including potential fines and reputational risk in the marketplace.

The urgency of ESG compliance for CPOs

CPOs are acutely aware of the growing impact of ESG regulations on their operations. The rapid increase of regulatory frameworks, especially for businesses that source supplies and operate internationally, has reached a critical point. The EU’s Corporate Sustainability Reporting Directive (CSRD), which became law in early 2023, exemplifies this trend. It mandates that all major and listed companies—including EU subsidiaries of non-EU enterprises—must disclose detailed information about their ESG impacts. The clock is ticking: CSRD will apply to reports published in 2025 for the 2024 fiscal year. This new reality intensifies the need for full transparency into supply chains. Achieving this means ensuring robust data management to support the accurate ESG assessment of suppliers.

The challenge of fragmented data in supplier and procurement systems

The problem, however, lies within the vast troves of enterprise data. Siloed, fragmented and generally untrustworthy, the information that CPOs need to generate ESG reports is in disarray.

Fragmented data across supplier and procurement systems is a pervasive challenge that hampers enterprise operations’ efficiency, accuracy, and effectiveness. As organisations increasingly prioritise ESG reporting, the consequences of fragmented data have become more pronounced. It is not just a luxury anymore; having trusted data is crucial to meeting the needs of the growing complexity of regulatory risk. The average enterprise uses 446 applications that are largely disconnected from one another, resulting in data silos and multiple versions of the truth, according to Gartner. 

One of the most immediate consequences of fragmented data is the lack of comprehensive visibility into the supply chain. Limited visibility into supplier performance is a major challenge, primarily due to data being dispersed across multiple, unconnected systems. The lack of visibility hinders decision-making as procurement teams struggle to access reliable, up-to-date information on supplier compliance, risks, and performance metrics.

Navigating the complexities of ESG reporting

As CPOs refine their procurement processes, they must tackle supply chain data management simultaneously. ESG regulations demand new types of data about suppliers maintained to a higher standard of accuracy and completeness. 

Unfortunately, too much supplier data is currently siloed, inaccurate, or incomplete, which jeopardises the ability to measure ESG compliance effectively. The ultimate goal of advancing sustainability and good governance within procurement processes is admirable, but the workload is immense. 

CPOs and their teams must identify which suppliers have advanced CSRD practices while assisting others in improving their processes. This cannot be a mere checkbox exercise; it requires ongoing collaboration, guidance, and assessments to embed CSRD principles into contracts and continuously evaluate the risks within the supply chain—whether related to child labour, environmental damage, or other critical issues.

The urgent need for modern data unification

The case for data unification and management across supplier and procurement systems is clear. By consolidating data into a single, coherent system—such as through Master Data Management (MDM) solutions or with targeted data products—organisations can achieve a unified view of their supply chains. 

This improves visibility and decision-making and ensures that ESG reporting is accurate and comprehensive, reducing the risk of non-compliance.

Given the need for agility and effectiveness in CSRD reporting, the choice of data management and unification solutions is critical. Modern, cloud-based solutions offer distinct advantages. These include open application programming interfaces (APIs) that simplify and accelerate the integration of internal and external systems. CPOs should also seek MDM platforms that leverage AI and machine learning to automate data quality checks. Doing so will further streamline the process.

To get a 360-degree view of the supply chain, supplier data must be enriched with ESG and compliance data from third-party sources such as Dun & Bradstreet, OneTrust, Bloomberg, and others. 

That is why CPOs should seek out cutting-edge 360 solutions that offer out-of-the-box integrations to third-party data providers and pre-packaged, industry-specific data models and configurations that are highly tailored to supplier data with the goal of quickly getting results. 

These solutions can dramatically reduce implementation time and accelerate time-to-value for organisations. CPOs should also look for data unification platforms that offer easy low-code integrations with upstream systems, such as supplier onboarding portals and downstream systems for payment and risk management, to have a fully integrated solution to manage their supply chain.

The benefits (beyond ESG reporting)

The benefits of having a single source of data truth extend beyond ESG reporting. Accurate and consistent data in supplier and procurement systems can streamline new supplier onboarding and enhance product pricing and production planning. 

Whether driven by ESG requirements or not, unifying supply chain data will provide CPOs with the clarity needed to make their supply chains more efficient, cost-effective, and resilient.

Supplier data is the lifeblood of procurement and leaders rely on the strategic insights they get from data analysis to make decisions that reduce risk, boost cost savings and drive performance. 

Even so, if the data is faulty, the insights will also be faulty, and a surprising 81% of companies say they are not completely confident in their supplier data. There are a variety of reasons for this:   

• Suppliers may not always keep their data fully updated in self-service portals.
• Information isn’t enriched with independently verified data to the level procurement teams need, to include diversity status, proof of compliance, data protection policies and more.
• Researching, assessing and auditing suppliers can be tedious and time-consuming. This means organizations make decisions on incomplete or unreliable data or skip the process altogether.

These challenges have long plagued the procurement function. The issue has come to the forefront of procurement discussions over the past 18 months for many reasons, but most notably because organizations have had to make rapid decisions in response to the COVID-19 pandemic, have increased concerns about business integrity, and face calls from government and civil society for greater diversity and equality of opportunity. 

Supplier financial health also remains a top concern. According to riskmethods’ new report, the biggest supplier risks aren’t directly related to COVID. In fact, several key indicators of supplier financial instability increased over the last half of 2020, including ownership structure, field issues such as product safety risks and force majeure warnings. Reliable supplier data is instrumental in meeting these challenges and building supply chain resiliency, agility and diversity. 

WATCH NOW: Why reliable supplier data matters

Here are three ways reliable supplier data supercharges procurement:

Drives agility with deeper visibility.  

One of the most important lessons we’ve learned from COVID is the criticality of supplier diversification. When production slowdowns, closed borders and fluctuations in customer demand caused global supply shortages, organizations had to adapt quickly and find alternatives. Outdated or incorrect supplier data prevents procurement from confidently deciding on the fly which supplier is the next best to tap. 

Total visibility and a deep understanding of the supplier base – capabilities, current orders, past performance, financial risk indicators, whether they’re third-party risk certified, have been audited for cybersecurity vulnerabilities and more – are critical for being able to respond and bounce back from unexpected supplier events. Without this 360-degree view, how do you know if your backup supplier can deliver? What if they can deliver, but are out of compliance or close to bankruptcy, which opens you up to new risk?

Disruptions are inevitable. Reliable data puts procurement in a position to effectively navigate change, reduce risk and take advantage of new opportunities.

Boosts supplier diversity with detailed insights.

Increasing spend with diverse suppliers is the right thing to do because it contributes to social and economic value by helping traditionally underrepresented groups that typically encounter barriers to growth. Diversity is also good for business. According to a study by The Hackett Group, nearly all diverse suppliers meet or exceed buyers’ expectations. Companies that also allocate 20% or more of their spend to diverse suppliers attribute 10-15% of their annual sales to supplier diversity programs. A diverse supply base supports marginalized groups and advances innovation, opens more channels for goods and services, drives prices down and ultimately contributes to bottom line success. 

Poor data quality is often a roadblock to reaping these benefits. Organizations don’t always have clear insight into supplier diversity status and which companies are considered historically underutilized vendors — minority, women, veteran, LGBT-owned or Small Business Administration-defined small business vendors. This makes it incredibly difficult to understand the inclusivity of the supplier network and where to boost representation and spend. Reliable supplier data equips organizations to confidently identify and fill gaps and invest in the suppliers that directly support company values and initiatives, whether that’s diversity and inclusion, corporate social responsibility, sustainability or another important cause. 

Strengthens supplier relationships with one source of truth.

If data is the lifeblood of the function, supplier relationships are the heart. Strong, collaborative partnerships drive product quality, risk reduction, competitive advantage, growth and more. Cultivating that type of relationship with strategic suppliers requires intentionally managed insights. 

Reliable and centralized data helps procurement get an intimate and complete understanding of suppliers – procurement history, supply categories, financial stability, purchasing and contract records and any other signs of the supplier’s relationship to the organization. This insight enables teams to segment out business critical partners, identify any risky partnerships and move forward mutually beneficial opportunities that establish trust and unlock new value. The better you know, communicate and work with your suppliers, the more likely these partners are to help you address your own needs.

The bottom line

Not having reliable data to guide procurement decisions is like driving to an unfamiliar destination without a map or GPS. You might eventually get there, but you’ll likely have taken a wrong turn or two, and spent more time and gas money than needed, in the process. In fact, Gartner research found that poor data quality can cost businesses, anywhere between $9.7 and $14.2 million a year. 

With access to stronger and more reliable supplier data, procurement organizations can broaden their supplier network in a meaningful way that supercharges strategy, maximizes effectiveness and speeds the path to achieving critical objectives. 

About the author

Jim Bureau is CEO of JAGGAER, which celebrated 25 years in business last year. Jim is responsible for the company’s overall vision to transcend customer experience by providing intuitive and intelligent spend management solutions that allow clients to transform their supply chain. 

This week saw the start of a new partnership, as JAGGAER and Tealbook joined forces in order to provide enriched supplier data for JAGGAER customers through access to Tealbook’s Supplier Intelligence Platform.

The collaboration enables JAGGAER’s customers to find new suppliers and access accurate and comprehensive supplier information, including diversity status, compliance, certifications and more, providing JAGGAER with a competitive advantage over other portal-based supplier information, community insights and networks that come with traditional S2Ps.

Access to accurate supplier data is a huge challenge for most enterprises, hindering decision-making, innovation and resilience. Through this unique partnership, JAGGAER customers will have access to autonomously enriched supplier data tagged with diversity status, compliance and certifications linked to suppliers’ profiles within Tealbook’s Supplier Intelligence Platform. This collaboration will also enable JAGGAER customers to automate supplier profiles, removing the dependency on suppliers to update their information. Suppliers will have their profiles self-maintained in Tealbook as a complement to the JAGGAER portal.

“Access to Tealbook data, which is updated continuously and autonomously through machine learning technology, will allow JAGGAER customers across multiple vertical industries to make better decisions about suppliers faster and more easily than ever,” commented Jim Bureau, CEO, JAGGAER.

“Many of our customers are currently exploring options to diversify their mix of suppliers for a number of reasons, including the need to reduce risk, especially in response to the pandemic, and the pursuit of environmental, social, and corporate governance (ESG) objectives. Partnership with Tealbook will give customers the confidence to respond quickly to changes and opportunities by moving reliable supplier data to upstream decision-making processes. More broadly, these capabilities are yet another step forward in our march toward fully autonomous procurement, relieving both buying organizations and suppliers of the onerous burden of manual data updates,” Bureau added.

Longer term, JAGGAER and Tealbook will set out a roadmap for full integration of their respective software platforms.

Tealbook’s supplier data foundation offers an innovative and easy-to-implement approach to autonomously gathering and validating supplier information from over 400 million websites and 600 data sources. The platform helps organizations avoid supply disruptions in times of crisis, support strategic objectives like increasing spend with diverse suppliers and improve the quality and savings from strategic sourcing, especially in new categories where there is less knowledge of the market.

“Even with millions of dollars of investments in cloud S2P solutions, 93%* of supply chain and procurement executives are experiencing negative impacts to their business on a regular basis due to misinformation and poor supplier data,” commented Stephany Lapierre, CEO of Tealbook. “This includes financial loss, delayed timelines and projects, unhappy internal and external customers, termination of supplier relationships and more. The solution is Tealbook, a trusted data foundation that can be leveraged by eProcurement solutions to ensure these investments are successful.”

“We are thrilled to partner with JAGGAER to enhance JAGGAER ONE’s Spend Management Platform with the power of AI generated supplier data and our advanced supplier network,” Lapierre added. “This collaboration will allow JAGGAER customers to enhance supplier data and gain access to their entire supplier base, reducing the need for data enrichment services and dependency on suppliers to enrich and maintain portals. This partnership will enable JAGGAER customers to better utilize the spend management platform to create real-time access to their entire supplier base while expanding their vendor data to quickly identify suppliers that meet their requirements, gaining intelligence, speed and agility.”

Ivalua, a leading global spend management cloud provider, and Consus, a leading global supply chain solutions provider, today announced that Jollibee Foods Corporation (JFC) has successfully deployed Ivalua’s platform to empower its procurement digital transformation, with Consus leading implementation. The comprehensive project spanned Supplier Information, Risk, & Performance Management, eSourcing, Contract Management, Catalog management, Spend Analysis, Savings Tracking, Category Management & overall change management.

Jollibee Foods Corporation (JFC) is a chain of fast food restaurants with a worldwide store network of more than 5,000 stores. It operates the largest food service network in the Philippines with 3,316 stores in the country and 2,655 stores abroad as of December 2019. JFC leverages only best-in-class processes and technologies, with its full operational procurement system used over the years to support its rapidly growing store network in the Philippines. As it continues to grow and expand internationally, there was a need for an integrated global procurement platform for its upstream or strategic processes that would perform amid presence of risks and complexities, and would improve cross-functional collaboration between internal stakeholders, procurement, and suppliers.

JFC selected Ivalua’s platform due to its ability to support every stage of its planned transformation, including quick deployment, flexibility to meet evolving requirements, analyst-recognised best-of-breed capabilities and complete, unified suite. Consus was selected as implementation partner for its deep source-to-pay expertise. Additionally, JFC was looking for a trusted partner aligned with their “customer experience first” vision to jointly disrupt current processes and adopt best practices globally.

The deployment of Ivalua’s platform has been tightly integrated with JFC’s backend SAP ERP systems to ensure seamless flow of information and maximum automation. The platform will deliver a range of benefits to JFC, including improved governance and auditability, more efficient procurement processes, more informed analysis and decision-making, proactive risk management, improved supplier qualification and collaboration and better compliance with contracts and policies.

“This represents a significant milestone in our procurement transformation, which will allow us to deliver more value to the organisation, employees, customers and suppliers,” explains Susan Tanmantiong, Chief Procurement Officer of JFC. “This project was successfully implemented by Consus and Ivalua through the commitment and support of their executive leadership.  Ivalua’s platform empowers us with the leading technology needed to deliver on our vision.”

“My heartiest congratulations to JFC and the entire Project Ruby Team,” explains Shantanu Bhowmick, Chairman & CEO at Consus Global. “I believe that the combined team of Ivalua, Consus and JFC have delivered a long-term and sustainable solution to digitise the enterprise wide Source-to-Receipt Process at JFC. With procurement transformations of this nature and magnitude, there are both short term and long-term benefits. The integrated Ivalua solution deployed will not only bring increased spend under management on one platform but also allow Jollibee to collaborate both internally and externally to create sustainable value, improve supplier performance and manage supply chain risks.”

“This project is a great example of how ambitious transformations can be successfully launched in record time when innovative procurement teams work with the right partner and leading technology,” explains Dan Amzallag, CEO at Ivalua Inc. “Consus has been a long-term partner of Ivalua, whose experience translates to significant value for our customers. And the JFC team’s customer-centric approach, vision and energy was key to the rapid deployment.”

Research from Ivalua, a leading provider of spend management cloud solutions, has shown that six-in-ten (60%) UK businesses have decreased their investment in sustainability initiatives due to the COVID-19 pandemic. According to the study, almost all (95%) UK businesses have plans in place to address environmental concerns in the supply chain over the next 12 months; however, given the impact of COVID-19 on business operations and budgets, many of these could be impacted.

The research, conducted by Vanson Bourne on behalf of Ivalua, surveyed 200 UK-based procurement, supply chain and finance professionals about managing sustainability initiatives and environmental concerns in the supply chain. The results show businesses face several hurdles when implementing sustainability initiatives, with 93% claiming it is challenging to gain visibility into suppliers to track the environmental impact of their supply chain. When it comes to working with suppliers, quality (38%) and cost (31%) are the most important factors businesses consider, with sustainability far behind (15%). Despite few placing sustainability as a top priority when working with suppliers, 87% of UK businesses believe making their supply chain greener can be a key competitive advantage.

“COVID-19 has forced many companies to change their priorities to focus on ‘business as usual’ and ensuring their survival, creating further barriers when it comes to implementing sustainability initiatives,” explains Alex Saric, smart procurement expert at Ivalua. “However, in the coming months and years, businesses must return their focus to improving sustainability and contributing to global efforts to reduce our impact on the environment. Whilst it is a barrier today, COVID-19 is also pushing leaders to rethink their approach to supply chains. In this respect, COVID-19 could be a tipping point for a sustainability revolution, and businesses that don’t take action to tackle environmental concerns could risk losing market share to greener competitors.”

Lack of visibility slowing plans to tackle environmental concerns

The report found that a lack of digital maturity is an issue when gaining visibility into the supply chain, with three-in-ten (30%) UK businesses reporting a lack of visibility into supplier risk. A further 28% said they had a lack of visibility into tier 2/3 suppliers, while 20% struggle to gain visibility into tier 1 suppliers. Businesses also face challenges identifying and mitigating against environmental concerns in the supply chain, where the biggest barriers are poor data quality (39%), prioritisation of cost (38%) and difficulty collaborating with suppliers (38%).

As a result of this lack of visibility, most UK businesses are unprepared to address environmental concerns, with 81% claiming they do not have comprehensive and fully developed plans to overcome air pollution, and almost three-quarters (74%) claiming the same for carbon emissions. Less than a quarter of UK businesses (24%) had no plans at all to address water pollution.

“Businesses need to address supplier visibility issues and make sure they are putting the right tools in place to drive environmental change internally and beyond, empowering suppliers to do the same”, concluded Saric. “This means taking a smarter approach to procurement that gives UK businesses a 360-degree view of their suppliers, including information on sustainability practices. This will make sure businesses can see exactly who their suppliers work with, assess environmental impact and identify opportunities to collaborate on sustainability projects in real time, ensuring sustainability remains a top priority in a post-COVID-19 world.”

Why not listen to our EXCLUSIVE discussion with Alex Saric on The Digital Insight podcast: