EcoVadis: Exploring the Supply Chain Digitalisation Gap

Companies have spent the past decade establishing net zero targets and working toward compliance with regulations. The primary obstacle now is scaling these commitments into operational reality.

A widening technology gap presents the most pressing challenge. Tier One multinational buyers have adopted AI at speed, but their Tier Two and Three partners lag in digital capability.

Digital adoption splits supply networks

Procurement functions have integrated AI to manage complex global supply chains. According to EcoVadis' latest annual Sustainable Procurement Barometer, which surveys business leaders, the gap between buyers and sellers continues to expand.

The survey found that 68% of buying organisations currently use AI for analytics, data checking and risk screening. This digital transformation is not advancing uniformly across supply networks.

EcoVadis found that 36% of suppliers do not plan to use AI tools, creating a digital divide that puts global ESG data at risk. Organisations report progress where they exercise direct control, with almost half claiming visibility into 75% or more of their Tier One suppliers.

Transparency diminishes rapidly beyond the first tier. According to the survey, only 12% of organisations can see into more than half of their Tier Two suppliers, and for 85%, Tier Three suppliers remain largely hidden.

"The companies performing best right now are using sustainability to protect revenue, manage supplier risk and make faster decisions," says Pierre-François Thaler, Co-Founder and Co-CEO of EcoVadis.

"You cannot build a resilient supply chain if you don't know where your carbon exposure is, where labour risks exist, or which suppliers could disrupt your business tomorrow.

"More than US$2.5tn in global spend now runs through this lens. That tells us sustainability has moved from the sidelines to the centre of how companies operate."

Risks hidden in lower tiers

The absence of AI and digital maturity in deeper supply chain tiers creates tangible business risks. Disruptions, human rights violations and carbon hotspots often originate from remote parts of supply networks.

Without AI tools to match supplier data and flag issues, procurement teams operate reactively rather than preventatively. When suppliers lack digital infrastructure, the time required to gather decision-making information extends considerably.

Buyers require detailed, product-level carbon data to satisfy regulations such as the EU's Corporate Sustainability Reporting Directive. Almost 30% of suppliers still do not provide any primary emissions data.

This data shortfall prevents buyers from accurately measuring their Scope 3 exposure or calculating the true return on sustainability investments.

From compliance checks to collaboration

Businesses are redirecting resources toward supplier capability building and treating them as strategic partners. According to EcoVadis' research, leaders are 3.6 times more likely than others to work closely with their suppliers, shifting from one-time surveys to ongoing, structured engagement.

Closing the AI and data gap requires top companies to set explicit expectations and provide tangible support. This includes helping small and medium-sized businesses adopt digital tools and reporting systems.

Integrating intelligence into sourcing, contracts and product development could transform sustainability from a reporting obligation into an innovation driver.

"Putting sustainability into practice at scale exposes a new challenge: the growing complexity of global supply chains is stretching traditional governance models beyond their limits," says Matias Pollmann-Larsen, Global Risk, Resilience and Sustainable Value Chain Lead at EcoVadis.

Technology closes visibility gaps

Supply chain disruptions continue to cost the global economy billions in lost revenue and reduced capacity.

Organisations using advanced AI-driven processes see approximately 2.5 times more revenue growth and productivity than others.

"AI is becoming a core lever of this shift, enabling procurement teams to move from reactive oversight toward proactive, intelligence-led decision-making," Matias adds.

By 2029, 40% of organisations are expected to achieve substantially better visibility into their Tier Three networks, driven by new regulations and technology.