New York start-up Altana Technologies has raised $100 million to make global supply chains more transparent, resilient and sustainable.
- Altana’s technology provides real-time supply chain mapping, management and reporting capabilities.
- Improved transparency is a top priority for the supply chain, but companies are struggling with transformation.
- Increasing pressure from regulators, investors and consumers alike is fuelling demand for technologies enhancing supply chain transparency.
Altana will use the funds raised in its series B round, led by Activate Capital, to continue the development of its product and platform, before expanding its reach across both the public and private sectors.
According to co-founder and chief executive Evan Smith: “This investment reflects the importance of our mission in this era of dislocation. We are proud and grateful for these new partnerships as we build toward our vision of Globalization 2.0 – a new era of globalization defined by trusted networks [secured data networks], which span and connect governments, businesses, and civil society to shape a more resilient, secure, inclusive, and sustainable world.”
What does Altana’s technology do?
Altana’s Atlas platform connects to, and learns from, both public and private datasets to provide companies with real-time, geolocated visualisations of their supply chains. Data is centralised under a single representation, allowing users to trace the journey of goods and materials from their Tier 1 direct suppliers right back to the sources of raw materials.
These supply chain maps are continuously updated, and layered with third party risk analytics and ESG data, including Scope 3 emissions. Supply concentrations, interdependencies, points of failure and potential disruptions are highlighted, enabling users to proactively manage risks by anticipating future problems.
The technology also includes automated due diligence capabilities, which rely on artificial intelligence to scan supply chain models for potential illegal activity or involvement of restricted parties.
Collaboration is the key to transparency
The platform’s collaborative features allow users to gather and verify supply chain data from their upstream network, before sharing tailored supply chain ‘workspaces’ with both internal and external stakeholders.
Due diligence, ESG and admissibility reports can be generated to demonstrate credibility, progress or compliance, with the platform being updated in real-time to reflect changes in trade enforcement, tariff policies, restricted party lists and other regulatory requirements.
Case studies conducted by Altana have already demonstrated Atlas’ use in mapping the trade of goods produced through forced labour in China’s Xinjiang Uyghir Autonomous Region and in identifying and mitigating potential risks to the supply of critical vaccines.
Businesses are under pressure to improve supply chain visibility
The increasing complexity of global supply chains exposes many companies to the risk of negative environmental impact, the use of exploitative labour practices and vulnerability to transnational organised crime.
As the social, environmental and economic costs of supply chain globalisation have come to light, stakeholders are expecting businesses to demonstrate increased transparency of their supply chains and address potential risks.
Legislation banning the import or financing of goods associated with forced labour, for example, is already under development or enforcement by several governing bodies including those in the US, the UK, Australia and the EU.
Climate-related financial disclosures have been made mandatory in the UK, with the US expected to follow under the Securities and Exchange Commission’s proposed rule. The EU, meanwhile, has introduced the Sustainable Finance Disclosure Regulations.
Such rulings go beyond placing regulatory requirements on companies that actively participate in global supply chains to include the institutions that finance them, such as pension funds or asset managers, meaning that opportunities for future investment are increasingly reliant on a company’s ability to provide transparent supply chain data.
Consumers are also demanding greater supply chain visibility, leading several consumer protection bodies to crack-down on their efforts to penalise unsubstantiated claims of environmental or ethical credentials.
A 2022 global consumer survey by the Institute for Business Value revealed that 49% of respondents had, within the past year, paid a premium of up to 59% for products branded as sustainable or socially responsible, so accusations of greenwashing can come with a hefty cost.
Company intentions do not yet match actions
According to a 2022 report by Ernst & Young (EY), supply chain visibility has now become the top priority of supply chain executives, driven largely by the need to comply with regulation and the opportunity to save costs.
Only 10% of the companies it studied, however, provided evidence of a highly visible and transparent approach to supply chain sustainability. A 2021 survey by McKinsey came to similar conclusions, with less than half of its participating supply chain executives claiming to understand the location and associated risks of their Tier 1 suppliers. For Tier 3 suppliers and beyond, the figure dropped to a mere 2%, which is particularly concerning given that over 50% of supply chain risks occur in Tier 2 or beyond.
The impacts of poor supply chain visibility are wide-reaching, as demonstrated by the destruction of carbon rich peatlands associated with consumer goods retailers and manufacturers that have pledged their commitment to ending commodity-driven deforestation, or by the connection of globally recognised brands to beef that had originated from illegally occupied indigenous lands.
Increasing demand for supply chain technologies
The adoption of supply chain technologies can help businesses pass audits, establish codes of conduct, and report their progress on improving the sustainability of their supply chains.
EY’s report concludes that the best performing firms were those that used technology to automate their supply chain management, improve communication and share data, while analysis by Gartner reveals that businesses using supply chain technologies were almost twice as likely to mitigate risks.
As businesses face increasing pressure from all sides to improve the visibility, sustainability and resilience of their supply chains, demand for platforms such as Altana’s is sure to rise.
