Small But Fast-Growing Supply Chain Stewardship Market Attracts Diverse Vendors

Corporate supply chain EH&S and sustainability issues often feature at the forefront of media as firms grapple to manage brand reputations, NGO advocacy concerns and improve operational processes. Just last week, for example, Oxfam (an international non-profit focused on poverty, hunger, and social injustice) published its annual ‘Behind The Brands’ scorecard on food industry supply chain stewardship performance. They scored and ranked firms such as Coca-Cola, PepsiCo and Nestle across issues ranging from supporting local farmer livelihoods to managing water use in resource-stressed regions. Similarly, the Corporate Human Rights Benchmark was published in early-April by a group of over 400 contributors representing firms including Aviva Investors, Calvert Investments and Vigeo EIRIS.

While these announcements bring supply chain EH&S and sustainability issues into the forefront, the global market spend by corporates on related software and services currently remains nascent with rapidly shifting needs. European firms, for example, typically have a more mature approach to supply chain stewardship due to stronger regulatory drivers such as the UK Modern Slavery Act, France’s Private Bill 501 and the EU Non-Financial Accounting Directive. Voluntary B2B pressures are also impacting businesses globally with ‘circular economy’ business models reinvigorating resource conservation efforts. Apple recently revealed that their take-back initiatives recovered 2,204 pounds of Gold over the past year - equivalent to around $43.6 million in value.

To better understand the current supply chain stewardship market size and potential growth, Verdantix examined corporate budgets and priorities, revenue and client growth data from 61 suppliers active in the supply chain stewardship market as well as strength of anticipated market drivers. For clarity, Verdantix defines ‘supply chain stewardship’ as: “Spend on software, data management services, consulting and assurance that enable firms to collect, aggregate, monitor and report EH&S and sustainability metrics from their suppliers to fulfil compliance requirements, augment EH&S and sustainability performance, conduct voluntary disclosures, and improve sourcing decisions.”

Our research found that, in the software segment, there are five distinct types of provider backgrounds: 1. EH&S and GRC software firms, 2. Product stewardship firms, 3. Supply chain information and management providers, 4. Specialist supply chain sustainability software firms, and 5. Supply chain collaborative platforms. With an anticipated five-year CAGR of 20% between 2016 to 2021, spend on software and data services will continue to grow as firms mature and outgrow the capabilities of in-house approaches, with low upfront costs, such as self-managed Excel spreadsheets.

To learn more about our research and the supply chain stewardship market size and forecast, download our webinar - Supply Chain Stewardship: Regulations, New Solutions, and Market Growth and attend our EH&S Summit.

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