With the introduction of stringent environmental, social and governance (ESG) disclosure requirements such as the Corporate Sustainability Reporting Directive (CSRD) and the Task Force on Nature-related Financial Disclosures (TNFD), there is a heightened focus on transparency and accountability in environmental, social, and governance practices for corporates as well as small and medium-sized enterprises (SMEs). Consumers are also increasingly seeking products and services that align with ethical and sustainable principles.
Despite this growing demand, the market has lacked robust solutions for quantifying and certifying ESG impacts throughout the supply chain. The technology proposed herein addresses this gap by providing a comprehensive, quantifiable evaluation of natural capital and social impacts using the inclusive wealth index (a metric for measuring the total wealth of a country, including natural, human, social, and produced capital) and life cycle assessment (LCA) methodologies assigning quantitative values to natural resources, particularly in terms of their flows and stocks. This capability not only meets sustainability disclosure requirements but also supports companies in enhancing their ESG credentials.
The assessment framework is developed as an AI-powered software tool for the user to visualise a product’s supply chain map. It could trace back not only direct suppliers but also secondary, tertiary and upstream suppliers to identify hot spots or high-risk areas for ESG indicators, allowing the user to prioritise and plan for the remediation actions to restore natural capital, through a review of supply chains and input goods.
The startup team is seeking to partner SMEs that are part of large corporate supply chain, corporations or municipalities that requires comprehensive ESG assessment and natural capital evaluation in reducing supply chain risk for a broader range of ESG indicators beyond carbon emissions.
Dashboard enables the users to benchmark their level of achievement in ESG impact relative to the industry average, identify their company's strengths and areas of improvements.
The supply chain ESG analysis could be applied in various sectors that are becoming essential in major global markets. Quantitative evaluation of the economic value of natural capital in both flows and stocks could be applied in not just corporations and SMEs but for countries and municipalities. Applicable use cases include:
Given the current regulatory landscape and consumer trends, the potential market size for the proposed technology is substantial. Companies across various sectors, including manufacturing, retail, and finance, can leverage on this solution to improve their ESG performance, gain competitive advantage, and meet the rising expectations of stakeholders.
The proposed technology offers a unique value proposition by enabling precise, data-driven ESG assessments, making it an attractive and essential tool in the journey towards sustainability.