Dive Brief:

• Sphera, a tech consulting firm that provides companies with ESG performance and risk management software, announced Tuesday it had acquired SupplyShift, a supply chain sustainability software company.
• The merger aims to provide businesses with supply chain transparency, enabling them to better track and report scope 3 emissions and improve their overall ESG performance. SupplyShift’s cloud-based platform helps businesses expand supplier mapping and measure their supply chain impact through its suite of tools and services.
• The acquisition comes at a time when companies across the globe are facing increased scrutiny and regulatory pressure to report on their scope 3 emissions and carbon footprint.

Dive Insight:

SupplyShift’s network comprises over 100,000 suppliers the company says “engage and share information quickly” to manage risk and assist in supplier regulatory compliance. The merger intends to build on this network and provide companies with improved supply chain monitoring capabilities, in conjunction with Sphera’s own customer base.

The company looks forward to “helping [its] combined customer base accurately track and report their scope 3 emissions and be compliant,” Sphera CEO and President Paul Marushka said in a press release.

“As more regulations are passed that demand transparency, the SupplyShift solution will become indispensable in meeting global regulatory requirements and stakeholder expectations,” he added.

Sphera, which has been backed by asset investment company BlackStone since 2021, has over 3,000 customers across 80 countries and combines its SaaS software with consulting services, supported by proprietary data, to help businesses manage and mitigate their ESG risk.

“This planned acquisition supports our commitment to Sphera's accelerated growth and will bolster the company's supply chain capabilities for its customers moving forward,” BlackStone’s Senior Managing Director Eli Nagler and Managing Director Kelly Wannop said in the release.

Sphera’s acquisition of SupplyShift isn’t its latest foray into supply chain solutions: the tech and consulting firm bought supply chain risk management and software company riskmethods in 2022. The company’s software relies on artificial intelligence, big data and machine learning to help businesses identify and mitigate supply chain risk.

Sustainability reporting frameworks such as the International Sustainability Standards Board and the European Union’s Corporate Sustainability Reporting Directive require companies to disclose scope 3 emissions, which include emissions in the supply chain and comprise the majority of emissions for most industries. California’s SB253 also requires companies to report scope 3 emissions starting 2027, with similar reporting requirements expected from the Securities and Exchange Commission’s upcoming climate disclosure rule. 

However the rule, which is expected in April, has received pushback from companies on its scope 3 disclosure requirements, leading the agency to delay its release as it reviews feedback and public comments. Though the agency has said it aims to avoid exceeding its authority on the climate disclosure rule, SEC Chair Gary Gensler cautioned last month that American businesses would be at the behest of the EU’s climate disclosures if the agency did not publish a final disclosure rule or the rule was overturned by the courts.