Circular Economy Innovation Boosts Procurement Returns

Sustainability innovation is emerging as the primary driver of return on investment (ROI) for procurement leaders, as businesses shift from compliance-focused approaches to value-creation strategies centred on circular economy principles, carbon management and ESG performance.

EcoVadis and Accenture have released a collaborative report entitled The 2026 Sustainable Procurement Barometer, exploring how sustainability innovation is reshaping procurement and supply chain success. The research reveals that organisations prioritising circular products, supplier-driven innovation and integrated carbon strategies are outperforming peers who view sustainability purely through a regulatory lens.

The role of procurement has evolved from a cost-management function to a strategic driver of sustainability transformation. In today's landscape, ESG compliance alone is insufficient – businesses must embed circular economy thinking and carbon reduction into core procurement strategies to deliver meaningful environmental impact and business growth.

Circular innovation outperforms compliance

EcoVadis is dedicated to embedding sustainability intelligence into global business decisions, helping organisations unlock value with due diligence and transparency. EcoVadis' detailed insights offer global and actionable ratings to help businesses comply with ESG regulations, manage GHG emissions and improve the sustainability performance of global value chains.

In collaboration with Accenture, a technology consulting company which provides strategy and operations services to clients around the world, aiding in the implementation of AI, cloud computing and digital transformation, EcoVadis has published its 2026 Sustainable Procurement Barometer. This examines how businesses are implementing circular economy principles and carbon management strategies to drive ROI growth.

According to the research, leading organisations are seeing greater returns from sustainability innovation across the supply chain, rather than compliance activities.

Out of the top 10% of leaders, 80% state that innovation is the primary driver of return on investment within their sustainable procurement programmes. This surpasses compliance and is higher than the 54% reported by other companies.

In the UK, the top three most cited benefits from sustainable procurement programmes include regulatory preparedness (70%), risk reduction (65%) and innovation outcomes (62%).

Procurement leaders are prioritising circular products now more than ever, with increased focus on supplier-driven sustainability innovation.

Recent research shows that only 9% of companies ran innovation initiatives across from 26% to 75% of supplier spends – this figure now stands at 58% in 2025, demonstrating how circular economy thinking has become central to procurement strategy.

This dramatic shift reflects a fundamental transformation in how organisations approach value creation through their supply chains. Companies are increasingly recognising that circular economy principles deliver tangible business benefits beyond environmental compliance, including cost savings through resource efficiency, enhanced brand reputation and access to new markets where sustainability credentials are becoming essential purchasing criteria.

Carbon management meets resilience

As the geopolitical landscape becomes more complex and less predictable, procurement leaders face mounting pressure to manage risk whilst advancing carbon-reduction targets. The role now encompasses managing cost, risk and disruption, all while driving decarbonisation and circular economy initiatives. The companies achieving the greatest success are transforming sustainability goals into growth, efficiency and resilience outcomes.

Accenture has found that disruptions are costing organisations more than US$1.6tn in lost annual revenue growth.

However, companies embedding sustainability and carbon management into their risk strategies have demonstrated greater resilience when facing these challenges.

As such, they have gained a 3.6% higher revenue growth than their peers.

There is a growing gap in digital application between suppliers and buyers, with procurement teams increasingly leveraging AI for carbon data management.

To manage rising sustainability demands, procurement leaders are relying on this technology for predictive analytics (72%), risk screening (64%) and data validation (62%).

However, suppliers have not matched this level of adoption.

The UK has the lowest proportion of suppliers using AI, automation, real-time data and predictive analytics to support sustainability management and reporting (23.9%), however, they ranked as being the most likely to adopt this technology in the upcoming two years.

At the other end of this spectrum, UK buyers are actively enhancing sustainable procurement with AI – 75% of respondents use it for carbon data validation, 67% for supplier risk screening and 65% for predictive analytics.

This difference in adoption is creating limited visibility across supply networks, with 80% of global buyers having visibility into more than half of their Tier 1 suppliers, but increasingly limited transparency across Tier 2 and Tier 3.

"The question is no longer whether to invest in sustainable procurement. It is how to make it deliver measurable business results," says Pierre-François Thaler, Co-Founder and Co-CEO of EcoVadis.

"The leaders are using sustainability data to make everyday sourcing decisions, applying AI to manage risk and performance at scale and holding suppliers accountable for improvement. That is what turns sustainability into cost control, resilience and growth."

Global convergence on sustainability priorities

There is increasing global convergence around three sustainability-focused topics, though differing regulatory and market trajectories create regional variations.

• Carbon management as a constant - 54% of global respondents cite advancing net zero progress as a top-three programme focus area. This is expected to remain consistent over the next three years
• Supplier labour practices are key - increasing due diligence requirements are driving higher labour standards as a baseline ESG expectation. There is mounting pressure to increase visibility into workforce conditions throughout the supply chain
• Value-driven priorities are rising - organisations are prioritising value-creation opportunities like circularity and responsible AI, with growing focus on data ethics and digital traceability.

These three key focus areas are shaping sustainable procurement strategies across regions. The alignment on carbon management reflects the universal urgency of climate action, with businesses recognising that supply chain emissions often represent the largest portion of their total carbon footprint. Addressing Scope 3 emissions through procurement has become non-negotiable for organisations committed to science-based targets.

Meanwhile, the emphasis on supplier labour practices is being driven by both regulatory developments and stakeholder expectations. Modern slavery legislation, due diligence directives and consumer activism are compelling organisations to look beyond their direct operations and take responsibility for working conditions throughout their supply networks. This shift is transforming procurement from a transactional function into a force for social impact.

The rise of value-driven priorities demonstrates that leading organisations are moving beyond risk mitigation towards opportunity capture. Circular economy business models, responsible AI deployment and enhanced data transparency are creating new revenue streams, improving operational efficiency and strengthening competitive positioning in markets where sustainability credentials increasingly influence purchasing decisions.

"Many companies now consider sustainable procurement a core driver of business performance," adds Matias Pollmann-Larsen, Global Risk, Resilience and Sustainable Value Chain Lead at Accenture.

"Organisations that combine sustainability data with AI are making faster, more informed decisions across their supply chains. That is improving resilience, reducing disruption and driving measurable growth."

The research demonstrates that companies actively embedding circular economy principles, carbon management and ESG innovation into procurement are seeing measurable benefits and increasing ROI. As sustainability scrutiny intensifies, businesses moving beyond compliance are gaining a competitive advantage through enhanced supply chain resilience and accelerated progress towards net zero targets.