Ivalua: Will Consumers Pay for Supply Chain Transparency?

In today's eco-conscious marketplace, supply chain transparency has become a business imperative rather than just a buzzword.

Consumers are increasingly interested in the provenance of the products they purchase, which means that companies are feeling the pressure when it comes to the environmental and ethical impacts hidden within their global supply networks.

But transparency isn't merely about regulatory compliance; it's quickly becoming a competitive advantage for companies.

Research shows that, these days, consumers are willing to pay premiums of 2-10% for products that come from transparent companies.

For businesses navigating this new landscape, the question isn't whether to embrace transparency, but how quickly they can adapt.

Stephen Carter, Director of Product at Ivalua, spoke with Sustainability Magazine to share his company's take on supply chain sustainability.

Why is transparency within the supply chain important to consumers and partners?

Supply chain transparency helps to build trust with consumers and stakeholders. Consumers, especially those who are environmentally conscious, increasingly want to know where their products come from and how they are made.

Research from MIT Sloan School of Management revealed that consumers are willing to pay 2-10% more for products from companies that provide supply chain transparency.

By providing detailed information about a product's lifecycle, from production to disposal through DPPs, businesses can show their commitment to sustainability and ethical practices, building long-term loyalty.

Regulatory compliance is also a key factor driving the need for supply chain transparency. As industries face stricter regulations regarding sustainability and safety, maintaining transparency helps businesses stay compliant with laws.

An example is the EU’s Corporate Sustainability Due Diligence Directive (CSDDD), which will be transposed into national law by 26th July 2026.

This directive requires organisations to identify and address environmental impacts within their operations, including within their value chain.

Supply chain visibility is essential in promoting a circular economy, where the focus is on reducing waste, reusing resources and minimising resource consumption.

This contributes to a more sustainable model of production and consumption, which appeals to both regulators and environmentally conscious consumers.

A sustainable supply chain not only allows businesses to optimise processes and reduce inefficiencies, but also enables them to build resilience to mitigate external risks such as resource scarcity, regulatory changes and external disruptions. 

What is a digital product passport?

A digital product passport (DPP) is a digital record that provides comprehensive information about a product and its entire value chain.

This includes data that is collected throughout the life cycle of a product, including the origin, materials used, environmental impact and disposal recommendations. 

What challenges do companies face in building digital product passports?

To successfully build digital product passports, businesses need a complete picture of all their suppliers. This includes mapping all the components that comprise a product to these suppliers.

However, for many organisations, the sheer size and complexity of their supply chains – spanning numerous tiers, countries and involving multiple moving parts – make it incredibly hard to gather all the information they need to achieve transparency.

Unfortunately, a lack of digitisation is also slowing progress, with many organisations stuck in the past when it comes to gathering supplier data, relying on manual processes and Excel spreadsheets.

To achieve full oversight across complex supply chains and gather the data needed to build DPPs, organisations must equip their procurement teams with the right tools.

Unified Source-to-Pay (S2P) platforms offer tremendous strategic value by bringing together supplier and spend data into a single source of truth so firms can more accurately report on their products’ make-up and environmental impact.

Only with this level of supply chain visibility can businesses use data carrier solutions to share data like the origins of the product, composition, repair possibilities, disassembly options, recyclability attributes and more with consumers. 

Why and how is the EU bringing DPPs in from 2027? 

More consumers are demanding transparency on where and how products are made, with 54% saying they would boycott a company if it makes misleading sustainability claims.

In response, the EU is introducing digital product passports from 2027. The first product to be subject to mandatory DPPs will be batteries, with all textile products following suit. In fact, some companies have already introduced DPPs, for example Tesco’s F&F clothing range.  

The key to jumpstarting and creating a scalable process is the application of robust and reliable procurement processes with enabling technology.

Procurement can act as the bridge between the business and suppliers, but it must be empowered with the right technology to reliably look deep into the supply chains.

By doing so, organisations can then collect data on materials, components, locations, risk scores, ESG scores, spend and more.

Only with this data can UK businesses ensure that they establish a reliable, transparent and compliant supply chain that can support these initiatives and improve consumer trust.

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