ESG Oversight in Supply Chains: Sphera Lays Out Best Practices

Most large companies have thousands of suppliers spread across dozens of countries. Until recently, meaningful oversight rarely extended beyond the first tier. What happened further down the chain was, for all practical purposes, invisible. That is no longer tenable. A wave of new regulation, from the EU’s corporate sustainability due diligence directive to tightening disclosure rules in the US, has turned ESG oversight in supply chains from a voluntary ambition into a compliance imperative. Sphera, a Blackstone-backed software and data group based in Chicago, believes it has the platform to help companies close that gap.

Why Supply Chain Visibility Gaps Threaten ESG Compliance

The numbers tell a stark story. According to Sphera’s 2026 Scope 3 Report, which surveyed more than 1,000 sustainability leaders across 15 industries in EMEA, APAC and the Americas, 45% of respondents lack full confidence in the accuracy of their Scope 3 data. Meanwhile, 27% operate with sustainability teams of 10 or fewer employees, and only 14% report into a dedicated Chief Sustainability Officer.

These resource constraints collide with a visibility crisis. Sphera’s N-Tier transparency research, conducted in February 2025 with 500 senior decision-makers, found that 85% of supply chain risks originate beyond Tier 1 suppliers. Yet for most procurement teams, meaningful cooperation within their supply network ends precisely at that first tier. The study revealed that 70% of organisations struggle with data accuracy from Tier 2 to Tier 4 suppliers, leaving dangerous blind spots in their risk management.

Paul Marushka, CEO and President of Sphera, frames the stakes clearly. When disruptions hit, businesses need options, he notes. Firms with limited visibility into their supply chain face risks and exposures from sub-tier suppliers vulnerable to disruptions.

How New ESG Regulations Are Reshaping Supply Chain Management

The acceleration in ESG oversight in supply chains reflects mounting regulatory pressure from multiple jurisdictions. The EU Corporate Sustainability Due Diligence Directive requires companies with more than 5,000 employees and revenues exceeding 1.5 billion euros to comply by July 2028. The German Supply Chain Due Diligence Act has been in force since 2023. Additional frameworks including the Carbon Border Adjustment Mechanism and the EU Deforestation Regulation create overlapping obligations demanding sophisticated monitoring capabilities.

Sphera’s 2026 report found that 80% of respondents say regulatory changes have accelerated their sustainability reporting efforts. The company’s June 2025 geopolitical risk survey reinforced these findings, with 91% of Chief Procurement Officers and 88.5% of Chief Supply Chain Officers identifying regulatory uncertainty as a significant concern.

The message is clear: the transition to compliance will be unforgiving for organisations that have not built the right data infrastructure and supplier relationships.

Best Practices for Strengthening ESG Oversight in Supply Chains

So how can companies move from struggling with compliance to achieving genuine sustainability performance? Sphera’s research points toward several critical practices for strengthening ESG oversight in supply chains.

The first involves continuous monitoring rather than periodic assessments. Supply chains face unprecedented volatility, from geopolitical instability to climate-related events. Sphera’s Supply Chain Risk Report 2025 documented a 62% growth in cyber-related incidents within supplier networks and a 12% increase in possible human rights violations. Static annual audits cannot keep pace.

Multi-tier mapping represents another essential capability. Sphera’s N-Tier Transparency solution enables procurement leaders to map upstream suppliers, revealing dependencies invisible when analysis stops at direct suppliers. The company claims 99.8% risk monitoring accuracy across multi-tier networks, achieved by scanning more than 15 billion data points monthly.

Data quality improvement stands as perhaps the most pressing priority for effective supply chain sustainability programmes. Sphera’s 2025 Scope 3 Report found companies increasingly moving away from spend-based estimations, with only 15% now relying solely on such methods compared to 30% in 2024. Use of hybrid data models jumped 17 percentage points, with 65% of companies now combining spend-based, activity-based and supplier-specific data to improve accuracy and meet evolving disclosure requirements.

Supplier engagement forms the fourth pillar. Sphera’s research showed 54% of companies requesting emissions data directly from suppliers, while 29% are asking suppliers to set their own reduction targets. This signals a strategic shift toward deeper collaboration and shared climate accountability across value chains.

What Is Sphera and Why Does Its Research Matter

Understanding these best practices requires examining Sphera’s position in the market. The company was founded in 2016 when private equity firm Genstar Capital acquired the Operational Excellence and Risk Management business from IHS. Under CEO Paul Marushka, Sphera executed an aggressive acquisition strategy, adding Rivo Software, Petrotechnics, SiteHawk, thinkstep, SupplyShift and riskmethods to build a comprehensive sustainability platform.

In September 2021, Blackstone completed a $1.4 billion acquisition of Sphera, providing capital to accelerate product development and global expansion. The company now serves more than 8,500 customers and over one million users across 100 countries. Its SpheraCloud platform provides integrated sustainability and operational risk management capabilities, while its database of more than 20,000 annually updated, third-party verified datasets feeds emissions calculations for organisations globally.

Sphera was named a Representative Vendor in the July 2024 Gartner Market Guide for Sustainable Procurement Applications and achieved leader status in the 2025 Verdantix Green Quadrant for ESG and Sustainability Software. The company won a 2025 Chicago Innovation Award for its Supplier 360 Intelligence, an AI-powered solution delivering risk summaries in under 60 seconds.

How AI and Technology Are Transforming Supply Chain ESG Monitoring

The 2026 Scope 3 Report highlights technology adoption as the critical differentiator between organisations struggling with compliance and those achieving genuine performance. More than half of surveyed companies are in early stages of AI adoption to improve data quality and reporting confidence.

This technological shift is reshaping how companies approach ESG oversight in supply chains. Rather than relying on manual assessments, which 26% of organisations still use according to Sphera’s N-Tier research, leading companies deploy automated tools providing real-time alerts and predictive analytics. Sphera’s partnership with risk intelligence firm Verisk Maplecroft extends these capabilities, providing access to political, human rights and environmental risk indices.

The company’s Supply Chain Transparency platform, launched in October 2024, integrates Supply Chain Sustainability and Supply Chain Risk Management into a single solution combining standardised assessments, multi-tier data collection and audit-ready supplier data. This unified approach helps companies build more responsible supply chains while meeting increasingly complex compliance requirements.

The Business Case for Investing in Supply Chain ESG Programmes

Perhaps the most significant finding from Sphera’s research is the extent to which companies now view ESG oversight in supply chains as a source of competitive advantage. The 2026 report found that 73% of organisations voluntarily disclose emissions data, while 59% report increased sustainability budgets and 89% plan to expand Scope 3 reporting.

Nearly half of organisations surveyed in Sphera’s N-Tier study indicated their interest in deeper visibility stems from priorities beyond regulatory compliance, citing risk mitigation, operational continuity and reputation protection. This suggests many companies now view supply chain transparency as business-critical rather than just a regulatory mandate.

With 88% of supply chain leaders expressing concern about supplier financial health in Sphera’s geopolitical survey, the intersection of ESG factors and business continuity has never been clearer. Companies that close the compliance gap today through robust ESG oversight in supply chains will be better positioned to navigate whatever disruptions tomorrow brings.