Climate technology company Watershed has launched Watershed Product Footprints, an artificial intelligence–driven tool designed to help businesses measure and manage the carbon impact of their products, materials, and supply chain processes. The new platform addresses one of the most persistent challenges in corporate sustainability: accurately assessing upstream purchasing emissions, which often account for more than 70 percent of a company’s total footprint.

Scope and Strategic Framework

Traditional methods of evaluating product emissions typically rely on broad spend-based estimates, which offer limited precision, or on detailed life-cycle assessments that are slow and costly to produce. Watershed’s new solution uses AI to break down each product into its constituent materials and processes, tracing upstream steps such as raw material extraction, manufacturing, and transportation.

The platform also allows companies to incorporate primary data directly into the system, combining machine learning with first-hand operational insights. This hybrid approach provides businesses with a more comprehensive and adaptable framework for tracking the climate impact of procurement decisions.

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Economic and Environmental Impact

By producing product-level carbon assessments in minutes rather than months, the tool offers a significant advantage in both speed and scalability. Companies can quickly evaluate the carbon implications of different sourcing options, enabling procurement teams to prioritize low-emission materials and processes.

Accurate product-level data also opens the door for new forms of climate accountability. Businesses will be able to communicate emissions reductions to customers, regulators, and investors with greater confidence. For industries where supply chain emissions dominate, this could shift competitive dynamics, rewarding companies that can rapidly decarbonize upstream activities.

Corporate Governance and Transparency

Watershed positions the launch as part of a broader effort to improve the transparency of corporate climate reporting. The company noted that businesses have historically been forced to make strategic decisions based on incomplete or unreliable emissions data. By embedding sustainability intelligence into AI systems, Watershed aims to provide an accessible, verifiable method for companies to meet reporting obligations under frameworks such as the EU’s CSRD and the SEC’s forthcoming climate disclosure rules.

The new tool also supports governance by giving sustainability teams a way to model scenarios and present actionable strategies to boards and senior management. This strengthens the link between climate data and corporate decision-making, moving beyond reporting toward operational change.

Challenges to Scaling

While the technology promises significant gains, scaling product-level carbon tracking across entire supply chains will remain complex. Supplier engagement is critical, as companies will need access to accurate primary data to refine AI estimates. Variability in reporting standards across industries and geographies may also slow adoption, particularly for multinational firms navigating different regulatory regimes.

Another challenge lies in ensuring that AI-driven assessments are transparent and auditable. Without clear methodologies and external validation, companies risk skepticism from stakeholders concerned about “black box” approaches to emissions measurement.

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Future Outlook

Watershed’s launch highlights the growing role of digital innovation in corporate sustainability. As more jurisdictions introduce stringent disclosure rules and customers demand credible evidence of decarbonisation, product-level emissions data will become indispensable. By combining AI efficiency with customizable inputs, Watershed offers a pathway for businesses to integrate sustainability into everyday procurement and product design.

If widely adopted, the solution could accelerate supply chain decarbonisation and shift corporate climate strategies from compliance-driven reporting to proactive, data-informed decision-making. For now, the success of Watershed Product Footprints will depend on its ability to gain traction with procurement teams and prove that artificial intelligence can be trusted to deliver reliable, actionable climate insights.

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