JAGGAER’s 2025 ESG Report: Sustainable Procurement and Ethical AI Progress

JAGGAER reports 42% emissions cut and gains first AI governance certification in procurement sector

JAGGAER has published its 2025 ESG report with a notable claim: total emissions have fallen 42% since 2021. The company has also secured ISO/IEC 42001 certification for its artificial intelligence management system, becoming the first Source-to-Pay software provider to do so. For UK businesses evaluating procurement platforms or facing supplier ESG questions, these developments matter. They signal how software providers are responding to the same sustainability pressures their customers face.

The headline figures tell part of the story. However, the detail behind them reveals shifts in cloud infrastructure, measurement methodology and reporting maturity. Meanwhile, the AI certification introduces a governance layer that reflects where procurement technology is heading. Businesses that rely on digital procurement systems need to understand what these changes mean for their own compliance, reporting obligations and tender responses.

This article examines JAGGAER’s latest disclosures, what the emissions data shows, and why the AI governance milestone deserves attention from UK SMEs working through net zero commitments or public sector supply chains.

Emissions data shows Scope 3 dominance and ongoing reduction trajectory

JAGGAER’s 2024 ESG report states the company measured 8,278 tonnes CO2e in total greenhouse gas emissions during 2024. Scope 3 emissions accounted for 92% of that total. The company reports a 25% reduction in Scope 1 and 2 emissions compared with its 2021 baseline. Scope 3 emissions fell 43% over the same period.

Those figures align with the 42% total emissions reduction headline. Scope 3 consistently represents the largest share of JAGGAER’s carbon footprint. Consequently, the company has focused reduction efforts on indirect emissions rather than direct operational sources. Most software businesses face similar profiles. Energy use in offices and travel typically contribute less than supply chain, purchased goods and cloud services.

JAGGAER attributes part of the reduction to migration toward cloud-based hosting infrastructure. The latest report also credits a refined measurement approach developed with Watershed, a sustainability platform. This suggests improvements in both actual emissions performance and data quality. Better measurement often reveals higher initial baselines, so a reported reduction alongside methodology refinement indicates genuine progress rather than accounting adjustments.

The company states its carbon reduction targets have been verified by the Science Based Targets initiative. SBTi validation means targets align with climate science and limit global warming to 1.5°C above pre-industrial levels. JAGGAER has committed to cut absolute Scope 1, 2 and 3 emissions by 42% by 2030 and 90% by 2040, using 2021 as the base year. The company aims to reach net zero by 2040.

For businesses evaluating software providers, SBTi-validated targets carry weight. They indicate a supplier has submitted plans to an independent body and agreed to transparent reporting. That becomes relevant when buyers face pressure to assess supply chain emissions or demonstrate responsible procurement in tenders.

Double materiality assessment reflects European reporting standards

JAGGAER’s 2025 report introduces a double materiality assessment conducted with reference to the European Sustainability Reporting Standards. Double materiality considers two perspectives: how ESG issues affect the company financially, and how the company’s activities affect society and the environment. This approach differs from traditional materiality, which focuses only on financial risk to the business.

European regulations increasingly require double materiality assessments. The Corporate Sustainability Reporting Directive mandates this approach for in-scope companies. Although JAGGAER is a US-headquartered business, adopting ESRS-aligned processes suggests the company is preparing for clients subject to European disclosure rules or voluntarily raising reporting standards.

This matters because supply chain reporting obligations are expanding. Large companies required to report under CSRD will need sustainability data from their suppliers. Software providers that handle procurement data may face questions about their own ESG performance and reporting capability. A double materiality assessment signals more mature disclosure practices than basic carbon accounting alone.

For UK businesses, this trend is already visible. Public sector buyers routinely ask for supplier emissions data through PPN 06/21 questionnaires. Private sector clients increasingly include sustainability clauses in RFPs. A software provider with structured ESG reporting reduces friction in the bid process and provides data customers can use in their own disclosures.

ISO 42001 certification introduces formal AI governance framework

JAGGAER states it is the first business in the Source-to-Pay industry to obtain ISO/IEC 42001 certification for its artificial intelligence management system. ISO 42001 is an international standard for AI management systems. It provides a framework for developing, deploying and monitoring AI responsibly. The standard covers risk assessment, stakeholder engagement, transparency and accountability.

AI governance is becoming a commercial requirement, not just a technical consideration. The EU AI Act introduces legal obligations for high-risk AI systems. UK regulators are consulting on AI regulation frameworks. Businesses using AI-enabled procurement software need assurance that systems are governed, auditable and compliant with emerging rules. ISO 42001 certification provides that assurance through a third-party verified management system.

Procurement platforms increasingly use AI for spend analysis, supplier risk scoring and contract intelligence. These functions process sensitive commercial data and influence purchasing decisions. Consequently, businesses need to understand how AI is managed within the tools they use. Certification offers a clear signal that governance processes exist and meet international standards.

For SMEs, this becomes relevant when larger clients or public sector buyers ask about AI use in business operations. A procurement system with certified AI governance reduces risk and provides documentation for due diligence responses. It also positions the software provider ahead of competitors as AI regulation tightens.

Procurement technology embeds sustainability features beyond internal reporting

JAGGAER describes its Source-to-Pay platform as embedding sustainability across procurement workflows. The company states it helps customers manage risk and support responsible sourcing through its software. Earlier ESG reports show sustainability and diversity questions were built into new supplier RFPs from January 2022 onward.

This reflects a broader shift in procurement software. Platforms are moving beyond transaction processing to include ESG data collection, supplier assessments and carbon tracking. For buyers, that means procurement systems can support compliance and reporting rather than existing as separate processes. Supplier sustainability questionnaires, carbon footprint calculations and diversity metrics can be managed within the same environment as purchase orders and invoices.

UK businesses face growing pressure to measure supply chain emissions, particularly Scope 3. These emissions often represent the largest portion of a company’s carbon footprint. However, collecting data from suppliers is time-consuming and inconsistent. Procurement platforms that integrate sustainability data collection reduce administrative burden and improve data quality. They also create audit trails for certification bodies and reporting frameworks.

Public sector suppliers encounter this directly. PPN 06/21 requires bidders to publish a carbon reduction plan and report emissions annually. Businesses without robust data collection struggle to respond. Procurement software that captures sustainability information during routine supplier interactions makes compliance less burdensome. It also positions companies to respond quickly when clients ask for supply chain emissions breakdowns or ethical sourcing evidence.

JAGGAER’s ESG progress in context: five key facts

• JAGGAER measured 8,278 tonnes CO2e in total emissions during 2024, with Scope 3 accounting for 92% of the total.
• The company has reduced Scope 1 and 2 emissions by 25% and Scope 3 emissions by 43% compared with its 2021 baseline.
• JAGGAER’s carbon reduction targets are verified by the Science Based Targets initiative, with a commitment to reach net zero by 2040.
• The company completed a double materiality assessment aligned with European Sustainability Reporting Standards, indicating reporting maturity beyond basic carbon accounting.
• JAGGAER became the first Source-to-Pay software provider to achieve ISO/IEC 42001 certification for its artificial intelligence management system.

What UK businesses should consider when evaluating procurement software providers

Software providers are facing the same sustainability and governance pressures as their customers. JAGGAER’s disclosures illustrate how enterprise platforms are responding. For UK SMEs, this creates both opportunity and due diligence requirements. Businesses should assess whether procurement systems support their own reporting obligations or add complexity.

First, consider whether your procurement platform captures sustainability data as part of normal workflows. Separate systems for procurement and ESG reporting create duplication and increase error risk. Integrated platforms reduce administrative overhead and improve data consistency. If your business needs to report Scope 3 emissions or respond to supplier sustainability questions, the tools you use should make that easier, not harder.

Second, ask about AI governance if your procurement software includes automated features. This matters for risk management and client due diligence. Certification such as ISO 42001 provides evidence of structured governance. It also signals a provider is prepared for tightening AI regulation. Businesses using uncertified AI systems may face questions from clients or regulators that are difficult to answer without documentation from the software provider.

Third, evaluate the sustainability performance of the software provider itself. Clients increasingly expect suppliers to demonstrate credible climate commitments. SBTi-validated targets and transparent emissions reporting indicate a provider takes sustainability seriously. That becomes important when responding to tender questions or satisfying client ESG requirements. A supplier with weak or absent climate credentials can undermine your own sustainability positioning.

Fourth, consider reporting standards and transparency. Providers publishing detailed ESG reports aligned with recognized frameworks offer more assurance than vague sustainability claims. Double materiality assessments and third-party verification indicate reporting maturity. These details matter when clients or auditors scrutinize your supply chain. A provider with robust disclosures simplifies your own due diligence and reporting processes.

Our net zero program helps businesses understand supply chain emissions and develop supplier engagement strategies. Many companies struggle with Scope 3 data collection because procurement systems and sustainability processes operate separately. Platforms that integrate ESG data from suppliers into procurement workflows address that gap directly.

Where to find additional information on ESG reporting and AI governance standards

JAGGAER’s full ESG report and sustainability materials are available on the company’s website. The Science Based Targets initiative publishes guidance on target-setting and validation processes at sciencebasedtargets.org. The International Organization for Standardization provides details on ISO/IEC 42001 for artificial intelligence management systems at iso.org.

UK businesses can find guidance on carbon reduction plans and public sector procurement requirements through the government’s Procurement Policy Notes, particularly PPN 06/21, available at gov.uk. The European Sustainability Reporting Standards are published by the European Financial Reporting Advisory Group at efrag.org.

The UK government’s guidance on measuring and reporting greenhouse gas emissions is available at gov.uk. This resource provides conversion factors and methodology for emissions calculations. Businesses developing their own carbon reduction plans or responding to client sustainability questions will find these resources essential for credible reporting and compliance with emerging standards.