Can Sustainability Partnerships Power Supply Chain Change?

Sustainability partnerships are an increasingly vital force for the transformation of global supply chains. They serve as a catalyst for innovation, resilience and ethical progress. The large-scale challenges organisations face today cannot be tackled alone. Instead, the likes of climate change and labour transparency require collective problem-solving. 

Through this collaboration, companies, NGOs and governments can combine their expertise and resources to drive more systemic change than organisations could achieve in isolation - creating a route to real, tangible progress. 

Such collaborative efforts have successfully resulted in the adoption of advanced technologies and shared regulatory standards, improving visibility into sourcing, manufacturing and distribution. This goes a long way to mitigating risk and reassuring consumers and stakeholders alike that their supply chain operates responsibly. 

Deloitte found 94% of companies see supply chain sustainability as a strategic differentiator - so, in an era where governments increasingly demand evidence of sustainable practices, partnerships help CSCOs and CSOs alike to stay ahead of evolving regulation.

It seems Central and Eastern European companies are setting the benchmark, with 71% of companies actively addressing supply chain sustainability and 77% responding to rising customer expectations by adapting operations accordingly. Meanwhile, Deloitte’s own WorldClimate strategy targets two-thirds of suppliers to set science-based emission reduction goals, driven by the reality that purchased goods and services account for more than two-thirds of their emissions.

The business imperative for supply chain sustainability has never been greater, though recent events in the US may be beginning to bring that into question for that corner of the globe. Still, no industry is being left behind - including the fintechs.

Driving sustainable partnerships

Salah Said, Head of Sustainability at Klarna has experienced the transformative power of partnerships and innovation in sustainability. With more than a decade of experience, he emphasises the need to change business from within.

“I’ve been in sustainability for a little more than 12 years now,” Salah explains. “Before that, I worked in a lot of non-profits, social innovation, social businesses and entrepreneurship - I felt it was always so hard to get corporates to do more.” 

“I realised there was a need to change things from within, so sustainability was a great opportunity for me to go and do a little bit of entrepreneurship and help companies do better.”

He also points to trends such as the use of AI to accelerate ESG reporting and help consumers make more sustainable choices - an area Klarna actively explores.

“I think a lot of companies have embraced collaborations with non-profits and social businesses,” he continues “seeing them as an opportunity to drive innovation within the business and not only as a vehicle to support more social and environmental impact outside of the business.”

“Obviously sustainability isn't prioritised by every business in the world, otherwise we wouldn't be here. So that collaboration, I think, is really, really exciting.” 

Klarna itself integrates sustainability deeply into its operations, imposing an internal carbon tax to encourage reductions and promoting sustainable shopping by highlighting retail partners with circular and resale options. It is the perfect example of how sustainability partnerships can transform supply chains - proving responsibility doesn’t have to be a trade off with business growth and innovation.

Data-driven sustainability

Adding to this momentum Sophia Mendelsohn, Chief Sustainability and Commercial Officer at SAP, explains SAP’s goal to reach net zero by 2030 is deeply tied to stakeholder expectations: “Really good sustainability goals are always based on what your stakeholders want to see from the business.

“In our case, we know customers, investors and our communities are looking to SAP to explain and reduce their carbon emissions,” she adds. 

This requires a human-centric approach, Sophia adds: “The main challenges in reducing carbon emissions are not necessarily the emissions themselves – it is the people. They're the change management around the emissions reduction that has to line up with your business incentives and needs.” 

This is then amplified by embedding environmental stewardship, human rights and AI ethics across SAP’s operations and supply chain.

“Fundamentally, sustainability is a data play that supports and enhances generative AI,” she says. “We all know AI is only as good as the data it can ingest and no dataset is good and complete without considering sustainability attributes. That’s because every business, every product, every service depends on natural resource inputs and a stable climate.” 

To operationalise these commitments, SAP tracks sustainability, emissions and AI through three pillars: “The first is reducing emissions at the root cause. That’s the energy that the data centre runs off and the size and fit of the large language model being used.

“We have a wonderful customer, Chobani,” Sophia adds “they make ethically sourced and produced yoghurt – and they've used SAP business AI to reduce their time spent on expenses by 75%. Every time I hear them say that, I think that's 75% of their time back to their core sustainability mission.”

Finally, she highlights the importance of leadership alignment: “The CSO, the Chief Sustainability Officer, should be up first and foremost for the application of AI for their needs and goals.”

Standardising environmental impact

Cross-industry change is an increasingly popular approach, stretching across finance sectors like the one Klarna operates within, SAP’s software space and now beauty too - one of the fastest growing industries in the world. Whilst partnerships within the cosmetics industry usually take the shape of marketing collaborations, EcoBeautyScore is pioneering a different kind.

The EcoBeautyScore Association has launched the first global, science-based environmental scoring system tailored specifically for beauty and personal care products. This system addresses a critical need for a standardised, transparent way to measure and communicate environmental impact across the industry.

Jean-Baptiste Massignon, Managing Director of the EcoBeautyScore Association, explains that while “sustainability has become a major focus in the beauty industry,” the lack of a “standardised, science-based system for measuring and communicating environmental impact remains a key challenge.” 

The current landscape is crowded with various eco-labels and claims that are often inconsistent or incomparable, creating confusion for consumers and opening the door for greenwashing.

EcoBeautyScore aims to change this by providing “a harmonised, transparent and science-backed methodology” for assessing the environmental footprint of beauty products. Jean-Baptiste emphasises the system is “designed to be inclusive, encouraging participation from across the industry to drive collective improvement.” 

Collaborations with more than 70 leading cosmetics brands and associations, including L’Oréal, Beiersdorf, Henkel and Kenvue, are crucial to EcoBeautyScore’s approach - driving “a credible foundation for both brands and consumers,” which fosters transparency and collective action in sustainability. 

As regulation becomes increasingly complex it's not just that companies want to collaborate with one another, in fact many are direct competitors, but that they actually need to.

Sophia explains how SAP’s sustainability tools help alleviate these burdens: “The number one thing customers are using SAP sustainability solutions for right now is to remove that friction of regulatory compliance and reporting.”

She explains that companies seek to be “rewarded for their investments in sustainability” by sharing “fair and transparent information to their own customers, employees and shareholders.” To facilitate this, SAP’s solutions “semi-automate the regulatory reporting process,” easing the data collection, generation and aggregation that typically consume significant time and resources behind every sustainability report.

The competitive nature of corporate sustainability is not lost on Salah: “Collaboration is key and I feel sustainability is a pretty competitive space for a lot of companies, especially in a time where sustainability and ESG become commodities.” 

Shaping sustainable futures

That said, Salah sees this as an opportunity in the field, noting that “companies can come and work together and drive change more meaningfully” through partnership.  Looking forward, he anticipates significant shifts in corporate sustainability.

“Policies are increasing and expectations from stakeholders, especially investors, are increasing,” he explains. “But at the same time, a lot of companies embrace the opportunity within sustainability.” He points out that when businesses, like Klarna, recognise “there is a lot of business value within ESG and embrace it,” they unlock new opportunities for creating value propositions that resonate with customers.

Jean-Baptiste brings the perspective of a successful collaborative sustainability initiative. He observes: “One key lesson is that collaboration across competitors is possible, and powerful, when driven by a shared goal.” The EcoBeautyScore’s success owes much to the openness and engagement of its members across the beauty industry. 

Sophia closes with a grounded perspective that reinforces the practical value of integrating sustainability across business functions: “What we see here in hundreds, if not thousands of conversations is that sustainability remains a fundamental attribute of how our customers want to run their operations.” 

Her key recommendation reiterates a simple but critical step: “The number one thing you can do is ask how sustainability fits into the business processes that you run every day.”

It is clear then, that the future of sustainability lies not only in innovative technologies and frameworks but also in shared commitment, transparent communication and the courage to embed sustainability into everyday business operations.