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The State of Sustainability in Supply Chains
Digitizing documents delivers business gains while advancing ESG initiatives.

In just a few years, environmental, sustainability,and governance (ESG) initiatives have advanced froma nice-to-have to a must-have element of businessstrategy. ESG is now an integral part of business andtechnology strategies for companies across a broad
swath of industries worldwide. In a new Foundry
MarketPulse survey of 453 IT leaders in multiple
industries and global regions, 61% of the respondents
reported that they currently have an ESG initiative and90% either have an ESG program or are planning to
implement one. Government regulations are the top
driver for ESG programs, according to the study.
The survey focuses on supply chain sustainability,
defined as companies’ efforts to consider theenvironmental and human impact of their products’
journey from raw materials to production, storage,
and delivery, including transportation links. The
goal of these efforts is to minimize environmental
harm from factors such as energy usage, water

consumption, and waste production while having a
positive impact on the people and communities in andaround their operations. Companies typically measure
the effectiveness of their ESG programs acrossoffices, factories, and supply chains by using carbon
accounting, cloud-based analytics, and data fromsensors.
As IT leaders search for areas in whichtransformational gains can be achieved, many arefinding that digitizing the documents required for
procurement and supply chain processes has asignificant impact. A majority, 55%, said that digitization
has a strong impact: 17% said it’s transformational, and38% said its impact is major (see Figure 1).

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MarketPulse

THE STATE OF S U S TA INA B ILIT Y IN S U PPLY C H AI N S

Fig. 1 Impact of digitizing procurement
and supply chain documents on driving
sustainability outcomes

7% Insignificant
9% Minorthat document digitization delivers many corollarygains. In addition to reducing paper usage, it reduces
overall errors (51%), reduces manual efforts (49%), andimproves forecasting (48%). Additional benefits include
optimizing transportation and improving order-tosettlement processes (see Figure 2).

29% Moderate
38% Major
17% Transformational
Source: Foundry

In addition to furthering sustainability, digitizing
documents delivers many mainstream businessbenefits such as cutting wasteful paper usage andincreasing the efficiency of workflows. Typically, a large
enterprise can realize cost savings of up to $15 million
over seven years; a midsize company can see savingsof $9.5 million. Although many companies are well on
their way to putting supply chain documents in digitalformat, even leading firms have digitized only 50% ofthem, leaving much still to do and many sustainabilityand business benefits yet to be realized.
ESG mandates such as the German Supply Chain
Act, which took effect on January 1, 2023, are also
spurring organizations to automate processes that
add momentum to the reduction in paper forms
among supply chain partners. Nearly three-quartersof the survey respondents (73%) said ESG is playing
a role in driving automation, and 31% said ESG is theprimary driver. Among the many sustainability benefits
that result from automation, 40% of the surveyed
companies said, savings from eliminating paper area key benefit. Like document digitization, automation
is a work in progress. Although many processes havebeen automated to some degree, most are not yet fully
automated, according to the survey.
Benefits transcend compliance
Although digitizing documents and automatingprocesses further the cause of sustainability andenable businesses to comply with government
mandates, two-thirds of the sustainability benefits
sought from automation actually have nothing to dowith compliance/government oversight but instead
benefit the business generally. The survey reveals

Monitoring tracks sustainability
Monitoring enables a company to track its
sustainability activities, an important capability whenit comes to verifying and reporting them, especially for
regulatory purposes. Most of the survey respondents
have implemented (42%) or plan to implement (45%)
monitoring technologies. And significantly, a solid
majority of the companies want their suppliers tohave sustainability monitoring programs in place, anindication that IT leaders recognize that sustainability
practices are a shared responsibility and that theefforts of one diligent company can be negated bycareless practices by partners. Fully 81% said that it isvery important or crucial for suppliers to have deployed
monitoring programs across their own supply chains.
Fig. 2 Benefits from digitizing procurement andsupply chain documents

51%
Reduce overall errors

50%
Reduce paper usage

49%
Reduce manual efforts

48%
Improve forecasting46%
Optimize transportation resources

45%
Improve order-to-settlement

35%
Reduce overages in shipment

31%
Reduce expediting

30%
Reduce the need for safety stock

Source: Foundry3MarketPulse

THE STATE OF S U S TA INA B ILIT Y IN S U PPLY C H AI N S

Fig. 3 Status of environmental, social, and governance (ESG) programs by region

60%
North AmericaEuropeAPAC

56%

4%
5%
2%

8%
11%
8%
Not on our radar

On our radar,
but no plan

13%

15%

65%

16%

13%
9%

16%

Actively planningfor next 6 months

Actively planning forlater than 6 months

Currently in place
Source: Foundry

A global imperative
Sustainability is important to the Earth as a whole,and consequently, sustainability is a priority among
companies in each of the geographic regions coveredby the survey: North America, Europe, and Asia-Pacific(APAC). Government regulations are a driving force
behind ESG in all three regions, and all three reportstatistically similar implementation progress, although
North America, at 65%, leads among those that have
ESG programs in place (see Figure 3).
In another survey finding, all three regions reported
major or transformational gains from digitizing
their procurement and supply chain documents,
demonstrating that digitization benefits are universal
and not limited to any single geographic area (seeFigure 4].
The U.S. SEC mandate
Although government regulations are stimulating
ESG implementation in all regions, looming on thehorizon for the U.S.-based survey respondents isthe proposed Security and Exchange Commission(SEC) rule that requires companies to report their ESG
practices. The pending SEC regulation follows on theheels of ESG investment mandates on the part of major
brokerage firms such as BlackRock. Most U.S. firms
feel confident that they could comply with the SEC

requirement within six months, and those that havealready digitally transformed documents are in a better
position to report than those that have not, according
to the survey (see Figure 5).
Sustainability in vertical industries
Businesses across all industries are moving toward
the same goal of sustainability, but they are finding thatdifferent technologies deliver different sustainability
benefits, respectively. Consequently, some industries
are farther along than others in implementing
eco-friendly practices. For example, manufacturing/
automotive, retail, and consumer packaged goods(CPG) companies all scored well with regard todigitizing supply chain documents.
Fig. 4 Impact of digitizing procurement andsupply chain documents on driving
sustainability outcomes (by region)
North America
39%

41%

Europe36%
14%

MajorAPAC

16%

20%

Transformational
Source: Foundry4MarketPulse

THE STATE OF S U S TA INA B ILIT Y IN S U PPLY C H AI N S

Fig. 5 Readiness to report if the proposed SEC
rule was to be adopted within six months

Q13 Mod to Low

Q13 Major +

64%
50%

64%

44%

37%

34%

Material risks
and strategic
implications

Greenhousegas emissions

Targets andtransition plans
Source: Foundry

Thanks to its ability to eliminate paper forms,
electronic document interchange (EDI) can be akey contributor to ESG initiatives. But whereas 71%of the high-tech companies and 69% of the CPG
companies saw EDI delivering a positive outcome on
the sustainability front, only 43% of the pharmaceuticalcompanies saw a similar benefit. For pharmaceuticalfirms, therefore, EDI could be an avenue to explore toreap sustainability gains (see Figure 6).

Fig. 6 Different technologies delivertransformational results indifferent verticals
EDI / B2B INTEGRATION:

54%
Manufacturing/Automotive

50%
Retail71%
High Tech

43%
Pharma69%
CPG
Source: Foundry

Not a destination but a journey
As eco-friendly practices become more mature andeffective, it’s important to remember that sustainability
is a journey rather than a destination. Although it isalready a central business goal, sustainability will
become more important in the future, due to theanticipated enactment of regulations such as the SEC
mandate and ongoing financial sector pressure.
As the survey reveals, complying with government
rules is just one benefit of implementing sustainability
practices such as digitizing paper, automatingprocesses, implementing EDI, and deploying
monitoring technologies. Each of these initiatives
delivers many business benefits, including streamlinedbusiness processes, greater profitability, and improved
investor relations. These gains will only increase ascompanies up their ESG game in the years ahead.

Visit here to better understand how
OpenText can help digitize your supply
chain documents to achieve boost yourESG initiatives.
1“Understanding the Total Cost of Ownership of Enterprise
Integration Solutions,” Hobson & Company, 2016.