SAP: How Sustainable Supply Chains are Powered by Data & AI

Technology and data are powerful catalysts for transforming global supply chains.

As organisations face challenges like climate change and labour transparency, collaborative partnerships between companies, NGOs and governments are essential.

These alliances pool resources and expertise to bring about systemic change.

Software providers are crucial in supplying the tools for tangible progress.

Adopting advanced technologies and shared standards improves visibility into sourcing, manufacturing and distribution.

This helps mitigate risk and reassures stakeholders that operations are responsible.

A Deloitte report found 94% of companies see supply chain sustainability as a strategic differentiator, highlighting its importance in an era of evolving regulation.

Data-driven sustainability and AI

Data is the foundation of modern sustainability. Sophia Mendelsohn, Chief Sustainability and Commercial Officer at SAP, notes that SAP's net zero by 2030 goal is tied to what stakeholders, including customers and investors, expect.

She explains that achieving these goals requires a human-centric approach to change management. The main challenges are not the emissions themselves but the people and processes involved.

This is amplified by embedding environmental stewardship and AI ethics across SAP’s operations.

“Fundamentally, sustainability is a data play that supports and enhances generative AI,” Sophia 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.”

To operationalise these commitments, SAP tracks sustainability through three pillars, starting with reducing emissions at their source, such as energy consumed by data centres.

Integrating technology for internal change

Companies also use technology to bring about internal change.

Salah Said, Head of Sustainability at Klarna, emphasises the need to change business from within.

Salah points to trends like using AI to accelerate ESG reporting and help consumers make more sustainable choices, an area Klarna is actively exploring.

He has seen a change in how corporations view partnerships with non-profits, now seeing them as an opportunity "to foster innovation within the business".

Klarna integrates sustainability by imposing an internal carbon tax to encourage reductions, a process reliant on accurate data tracking. This shows how tech platforms help embed sustainability into financial and operational frameworks.

Salah acknowledges the competitive nature of the field but sees it as an opportunity, noting that through partnerships, companies can “work together and bring about change more meaningfully”.

Standardising impact with technology platforms

Growing regulatory complexity increases the need for standardised, tech-driven solutions. The EcoBeautyScore Association, for example, launched a global environmental scoring system for beauty products.

The platform provides a consistent method to measure environmental impact, tackling consumer confusion and greenwashing.

Jean-Baptiste Massignon, its Managing Director, notes the key challenge was the lack of a "standardised, science-based system".

EcoBeautyScore provides a “harmonised, transparent and science-backed methodology” to assess a product's footprint. This collaboration between more than 70 brands, including L’Oréal and Henkel, builds credibility and collective action.

This aligns with providers like SAP, whose tools help with regulatory burdens.

Sophia says customers use them “to remove that friction of regulatory compliance and reporting”.

Software that semi-automates reporting eases data collection, freeing up resources.

Sophia adds that customers want rewards for their sustainability investments.

For example, Chobani “used SAP business AI to reduce their time spent on expenses by 75%,” giving them more time for their core mission.

Her key recommendation is to “ask how sustainability fits into the business processes that you run every day”.