EcoVadis: Procurement Teams Face Supplier AI Gap Tier 2 & 3

Organisations have spent the past decade establishing net zero targets and building compliance frameworks. The challenge now centres on implementation at scale across extended supply networks.

A technology capability gap has emerged between buyers and suppliers. Multinational procurement teams at Tier One have adopted AI systems, but their counterparts further down the supply chain lack comparable digital infrastructure.

Procurement AI adoption outpaces suppliers

Procurement functions have integrated AI into supply chain management operations. According to EcoVadis's annual Sustainable Procurement Barometer, which surveys business leaders, the performance gap between buying organisations and their suppliers is widening.

The research found that 68% of buying organisations currently use AI for analytics, data verification and risk screening. However, digital transformation is not progressing uniformly across supply networks.

According to EcoVadis, 36% of suppliers have no plans to adopt AI tools. This creates a digital capability divide that could compromise global ESG data quality.

Procurement teams report progress in areas under their direct control. Almost half of the organisations surveyed said they have visibility into 75% or more of their Tier One suppliers.

Transparency decreases at lower tiers. Only 12% of organisations can monitor more than half of their Tier Two suppliers, and 85% have limited insight into Tier Three suppliers, the survey found.

"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.

Business risks from supplier technology gaps

"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," Pierre-François adds.

According to EcoVadis, more than US$2.5tn in global spend now incorporates sustainability criteria. This suggests sustainability has moved from peripheral concerns to core operational considerations.

The absence of AI and digital maturity among deeper-tier suppliers creates operational risks for procurement teams. Supply chain disruptions, human rights violations and carbon concentration points often originate from lower-tier suppliers.

Without AI systems to cross-reference supplier information and flag issues, procurement departments can only respond to problems after they occur rather than implementing preventive measures. When suppliers lack digital capabilities, the time required to gather decision-making information increases.

Procurement teams need granular, product-level carbon data to comply with regulations such as the EU's Corporate Sustainability Reporting Directive. However, almost 30% of suppliers still provide no primary emissions data, according to the research.

This information deficit prevents buyers from accurately calculating Scope 3 exposure or evaluating the return on sustainability investments.

Strategic supplier partnership approaches

Procurement departments are repositioning suppliers as strategic partners and investing in capability development programmes. According to EcoVadis's research, leading organisations are 3.6 times more likely than others to collaborate closely with suppliers, transitioning from periodic audits to continuous, structured engagement.

Closing the AI and data capability gap requires procurement teams to establish clear requirements and provide practical support. This includes helping small and medium-sized enterprises implement digital tools and reporting infrastructure.

Embedding intelligence into sourcing decisions, contract terms and product development processes could transform sustainability from a compliance exercise 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.

Procurement technology investment outlook

Supply chain disruptions continue to cost the global economy billions in lost revenue and reduced capacity. According to the research, organisations using advanced AI-driven procurement processes are experiencing approximately 2.5 times more revenue growth and productivity gains than those without.

"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 expect to achieve substantially improved visibility into their Tier Three networks, driven by regulatory requirements and technology adoption. Building resilient, value-oriented supply chains will require procurement teams to establish digital connectivity across the entire supplier network.

EcoVadis helps companies manage ESG risk and compliance, meet corporate sustainability goals and implement programmes at scale.