Project Symbiosis: AI and big data technologies for supply chain sustainability disclosure

The BIS Innovation Hub Hong Kong Centre is starting a new project that will apply cutting-edge technologies, such as artificial intelligence (AI) and big data, to improve tracking and disclosure of the environmental impact of corporations and their many suppliers. Project Symbiosis aims to encourage more sustainable practices (and funding for them) by providing better insights into the sustainability performance of a company's supply chain.    

Data limitations 

Limited data is often a challenge for the financial industry when calculating the environmental impact or carbon emissions of the companies that they invest in or lend to –  known as "financed emissions" or Scope 3 emissions.

This data limitation makes it difficult for financial institutions to measure, track and manage their environmental risks. It also limits their ability to direct financing to reduce emissions and facilitate transition to lower carbon emissions, in line with the Paris Agreement target to limit the global temperature increase to 1.5 degrees Celsius.

The lack of comprehensive data from small and medium-sized enterprises (SMEs) that are part of larger supply chains is particularly acute. Through these Scope 3 emissions, small companies contribute significantly to the total emissions of multinational corporations (referred to as anchor buyers). These multinational corporations are typically funded by financial institutions through a diverse range of financial instruments. Addressing this data gap is crucial for financial institutions to pursue sustainable financial practices.  

According to a survey by the Organisation for Economic Co-operation and Development, while SMEs collectively account for at least 50% of the business sector greenhouse gas emissions, only 10% of them currently measure their own emissions.

Project Symbiosis solution  

Project Symbiosis aims to reduce the information gaps related to climate and nature risks by employing targeted and simplified AI methodologies in supply chains. It will also explore the use of advanced data techniques to better understand the emissions and impacts on nature of the supply chains of anchor buyers and financial institutions. The aim is to identify opportunities where new financing can make a positive impact (referred to as "bankable solutions"). By connecting suppliers, anchor buyers and financial institutions, the project aims to create more sustainable supply chains through symbiotic relationships between SMEs and funding sources.