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Business Case for Industry
Please note that this content is under development and is not ready for implementation. This status message will be updated as content development progresses.
The purpose of this page is to provide a framework for business case development. We provide a generalized cost / benefit model and then discuss its application to specific roles and industries.
We also provide a separate cost benefit model and business case template for regulators.
Note: The economic impacts described in this document are projections based on available data and economic models. Actual results may vary. Regular monitoring and evaluation of the UNTP's effects are recommended to assess its efficacy and guide any necessary adjustments to the protocol.
Industry Cost Benefit Model
The high level model shown below breaks benefits into three categories and costs into two categories.
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Benefits accrue through increasing revenue and/or decreasing cost. Improved margins that result from that of course contribute to corporate value but there are also less tangible benefits at the corporate level such as brand reputation.
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Costs are incurred through changes to production processes to achieve greater sustainability and the implementation of traceability & transparency systems to communicate that verifiable sustainability.
Actual benchmarks for benefits and costs by industry sector and geographic region will become increasingly available over time through the UNTP Impact Assessment Framework (IAF). At this point in time, benefits and costs are described qualitatively and supported with metrics from public research.
Benefits - Revenue Uplift
Market Access
Legislation effectively put pressure on buyers to prove the provenance and sustainability of certain products, as well as to place a higher burden of truth on suppliers from specific regions. In many cases, these regulations reverse the burden of proof: companies must prove compliance to maintain market access. UNTP-based transparency allows companies to continue trading in these areas, rewarding suppliers and ensuring good practices, rather than being forced out of these markets outright.
Unit Price Uplift
Consumers are increasingly selective in their product choices based on credible sustainability criteria. There is evidence that rich data drives stronger consumer behaviour towards sustainable products, often leading to purchases at a premium. Nevertheless, if buyers select products based on sustainability criteria, then non-conforming suppliers and products are likely to be forced into lower-priced commodity markets
Anti-Counterfeiting
Global trade in counterfeit goods is estimated at between 2% and 5% of trade. The most impacted commodities are pharmaceuticals and luxury goods, including quality wines & spirits. What is more challenging to quantify is the proportion of counterfeit goods that are unknowingly purchased as genuine, since, in many cases, buyers of fake luxury goods know the goods are fake or pirated. UNTP offers a simple but effective anti-counterfeit protocol that works well when buyers are motivated to confirm that goods are genuine.
The value of sales recovered by reductions in illicit goods will vary from 0% for commodity goods to as much as 10% for pharmaceuticals and some luxury goods. A benchmark value of 1% industry-wide seems reasonable and conservative.
Benefits - Cost Reduction
Compliance Costs
Regulatory compliance costs encompass the administrative burden of reporting, processing fees, tariffs, border clearance delays, and penalties. As sustainability regulations increase, these will be more rigorously enforced at borders, likely resulting in higher compliance costs. The UNTP offers customs authorities and corporate regulators higher confidence data, which can streamline border processing, reduce administrative costs, and minimize delays.
As countries advance towards net zero commitments and implement domestic carbon pricing, it is increasingly likely that more countries will impose carbon border tariffs, such as the planned EU Carbon Border Adjustment Mechanism (CBAM). High-quality evidence of a low carbon footprint via UNTP Digital Product Passports (DPPs), along with full traceability, can help importers prove compliance with the EU rules of emission estimation, and reduce the burden of data collection and management for tariff treatment.
Additionally, high-quality evidence of conformance of imported goods reduces the risk of punitive non-compliance fines. Importers with traceable, high-quality data can ensure that they are only paying CBAM charges on actual emissions. Without accurate data, importers might overestimate emissions, leading to higher costs. Detailed tracking allows them to minimize over-payment and reduce their carbon liabilities if the carbon price effectively paid in the export country can be deducted.
Finance Costs
UNTP provides a framework based on international standards which can accommodate different ESG risks, enabling development banks to standardize their reporting and ensuring their mandate, without having to create ad-hoc structures for each Sustainable Supply Chain Finance Deal. This unlocks a significant trade finance gap, and enables preferential finance to reach deep-tier suppliers. Access to lower financing costs for suppliers results in lower cost of goods sold and improved margins. These trade finance arrangements often come with grants that can support costs associated with the ESG transition, such as support certification, consulting or implementation of new ERP systems for reporting.
Access to Trade Finance
The Asian Development Bank (ADB) estimates that the global trade finance gap was approximately $2.5 trillion in 2022, up from $1.5 trillions in 2016 with a significant portion attributable to SMEs applicants, lack of visibility, and issues with country risk, credit-worthiness and lack of sufficient information by the applicant. At the same time, Supply Chain Finance (SCF) has grown from $330 billion in 2015 to $1.8 trillion in 2021, despite this growth, SCF has has not yet had a major impact in reducing the trade finance gap due to difficulty reaching past tier 1 suppliers.
By adopting the UNTP, this gap can be reduced by enabling more companies to access preferential financing thanks to increased visibility over ESG credentials and ability to provide identity assurance from a trusted register, combined with SCF reverse factoring operating models which reduce applicants risk by tying the financing to the buyer credit risk.
- References Asian Development Bank (ADB), Trade Finance Gaps Growth and Jobs Survey 2021, Trade finance gaps growth jobs survey 2023. Deep-Tier Supply Chain Finance 2022
Reduced Finance Costs
According to the International Finance Corporation (IFC), companies that adopt sustainable practices can reduce their financing costs by up to 20% due to lower risk premiums and better access to capital.
- References International Finance Corporation (IFC), "Sustainable Finance: Creating Value for Companies and Investors," 2020.
Improved margins
A study by the Global Reporting Initiative (GRI) found that companies with strong ESG performance can achieve up to a 10% improvement in profit margins due to enhanced operational efficiencies and lower financing costs.
- References Global Reporting Initiative (GRI), "The Business Case for ESG: How Sustainability Can Drive Financial Performance," 2019.
Cost of Goods Sold
A report by McKinsey & Company indicates that companies with optimized supply chain financing can reduce their cost of goods sold by 5% to 10% due to lower financing costs and improved supply chain efficiencies.
Digitalisation Efficiency
Digitalisation through UNTP enables automated data collection and processing, reducing manual labor and errors. This leads to streamlined operations and faster decision-making. Enhanced digitalisation provides real-time visibility into supply chain activities, allowing for better inventory management and demand forecasting. Access to accurate and timely data enables companies to make informed decisions, improving overall business performance. Finally, digitalisation allows for better tracking of product quality and delivery times, leading to improved customer satisfaction and loyalty.
Digitalisation as a whole of organisation initiative can deliver a 10% to 20% reduction in operational costs due to automation and improved data accuracy. Improved supply chain visibility can reduce inventory holding costs by 15% to 30% and decrease stock-outs by 20%. Data-driven decision-making can increase productivity by 5% to 10% and enhance profitability by 3% to 5%. Enhanced customer satisfaction can lead to a 10% increase in repeat business and a 5% boost in overall sales.
Benefits - Corporate Value
Brand Reputation
Transparency in supply chains builds consumer trust, as customers are increasingly concerned about the ethical and environmental impact of their purchases. Companies that can demonstrate their commitment to sustainability and ethical practices are more likely to gain consumer loyalty. Companies with strong ESG credentials often see an increase in brand value. This is because consumers, investors, and other stakeholders perceive these companies as more responsible and forward-thinking.
- References Brand Finance : Sustainability Perceptions 2025,
Improved Disclosures
Regulations that mandate annual corporate sustainability disclosures are being drafted or already in force in most economies. They generally require reporting of concrete metrics such as CO2 equivalent emissions and almost all include scope 3 emissions (ie emissions associated with upstream supply).
The problem is that most corporations do not have the data from their upstream suppliers to directly measure their scope 3 emissions footprint. Therefore the only viable option is indirect measures such as using industry average intensity for each input product or material. Without direct information from suppliers there is no mechanism to select lower intensity supplies - and, correspondingly, there is no incentive for suppliers to reduce their emissions. Corporates that increase sales volume year on year are therefore likely to also report increased emissions (increased volume multiplied by an unchanged industry average). Companies that show deteriorating emissions performance are likely to be punished through reduced consumer loyalty, reduced brand value, increased border tariffs, and reduced access to finance.
Direct measures of supplier sustainability performance through UNTP digital product passports provide corporations with the means to select more sustainable supply and therefore directly improve their own aggregate performance year on year.
- Quantification. The same metrics as apply to brand reputation apply here.
- References. WBCSD Pathfinder 2.0 Framework
Costs - Sustainable Practices
Process Improvement
Suppliers are often requested to implement ESG improvements aligned with their buyers' ESG strategic priorities, as reflected in a buyers' materiality matrix.
Examples include:
- Reducing carbon emissions of particular energy intensive processes (i.e. by adopting less energy intensive processes or switching to renewable energy sources)
- Reducing or eliminating the use of harmful chemicals in heavy industrial processes
- Improving human or labour rights issues within their supply chains
These improvements are often costly, which are often absorbed by loans. Green finance mechanism can help reduce the financing cost of these improvements, and are often related to these improvements, while the establishment of long term contracts with buyers can on the one hand secure cash flow for suppliers to absorb those costs over the years, while on the other guarantee to the buyer the flow of conform goods.
Audits & Certification
Suppliers that improve their processes towards sustainability practices have three ways to prove their credentials to their buyers, namely carrying out a self assessment, being audited by the buyers and being audited and certified by a third party, the latter of which carries the greatest weight in terms of credibility, both for voluntary improvements and certainly for regulated ones. These certifications and audits often need to be made for each ESG risk where mitigating actions have occurred, with certifications starting in the 5 figures for each certification type.
Costs - Transparency System
Establishing a transparency systems along a supply chain carries its own costs in the form of consulting fees to map and study the structure and processes and actors involved in a specific supply chain, the data elements of it and how those conform to an interoperability protocol such as UNTP as well as software and IT integration and adaptation costs, all of which is expected to range in the six figures. It also carries costs to run such a system on a day to day basis.
At the same time, UNTP’s principle is to use what is already available and being used, or planned to be used, by participants, rather than buying new software; once implemented we expect the operational costs to be in a similar range to what existed before hand, with any additional cost related to additional features related to benefits which the industry might require.
Capital investment
To adapt a digital ecosystem to an interoperability protocol such as UNTP, adopters will likely rely on consulting companies to assess the supply chain, identify data elements, and evaluate compatibility with UNTP standards and may decide to rely on consultants also to project manage and implement the project. Equally buyers will need to integrate their systems with their suppliers systems, or decide to commonly use a system that conforms to UNTP.
Operational costs
As a UNTP complaint system set up is designed to work with what is already available, we expect adopters to get back more for the same resources they were already using for transparency purposes AUTOMATION, COST SAVINGS.. At the same time, the wealth of information resulting from full traceability will likely drive adopters to capitalise on their investment and add resources to analyse and disclose their supply chain data where they see a return.