Royal Mail is testing an AI agent that estimates the carbon emissions of proposed vendor contracts before the purchases are signed, aiming the tool at the supply-chain emissions it must cut 25 percent by 2030.

Emma Bayliss-Chan, head of climate strategy and risk at the British postal operator, built the calculator in six weeks during a fellowship program hosted this summer by carbon accounting software company Watershed. The "dummy" scenario she used to write the agent modeled a hypothetical contract to buy additional handheld scanners as part of an existing automation initiative.

The agent estimated that buying more units would have a modest impact on Royal Mail's indirect supply-chain footprint, which falls under Scope 3. That meant the hypothetical deal didn't require additional screening. If the proposal had breached a predefined level, it would have required another review.

Threshold-triggered screening

The calculator will not run on every purchase order. Royal Mail's procurement team, which requested the tool, will deploy it only when the greenhouse gas emissions associated with a purchase might exceed certain thresholds — not for low-impact spending, Bayliss-Chan said.

"The calculator is adaptable to a range of procurement scenarios," she said. "It can handle standalone business cases, which may be an in-year investment; RFPs or tender responses, which typically reflect a three-year contract term period; and longer-term investment plans like our vehicle replacement program, which typically cover a period of five years."

Royal Mail already weighs environmental criteria in vendor scoring; those factors carry a 10 percent weighting in overall purchasing decisions. The new agent adds a quantitative screen on top of that framework.

How the agent works

Bayliss-Chan trained the agent on the company's financial accounts reference table, which includes widely used business economic analysis and emissions factors. It also factors in currency exchange rates and Royal Mail's internal carbon price.

The reports it generates estimate the potential carbon costs of a project, its carbon intensity — measured as kilograms of carbon dioxide equivalent per British pound — and context on how the scenario ranks against other suppliers. The agent surfaces tradeoffs, flagging when a more expensive supplier might produce lower emissions.

"We see it as our responsibility, as internal sustainability advisors, to make the business aware of the carbon impact of their decisions and then make an informed choice accordingly," Bayliss-Chan said.

A portion of the procurement team will test the agent before a broader rollout. Bayliss-Chan is already eyeing other applications, including vehicle mileage and fuel usage.

Workflow lessons

For sustainability teams considering a similar build, Bayliss-Chan offered two design lessons. First, keep it simple: Royal Mail's team created a straightforward input form that takes a few minutes to fill out, including a two-question screener that alerts procurement staff if their project falls below the threshold requiring screening.

Second, pay close attention to workflow design. Bayliss-Chan started with an eight-step process that included 23 input fields. After testing, the calculator now uses five phases requiring as few as eight fields.

"I involved procurement colleagues early to review the workflow and provide feedback themselves, which helped me design something they'd actually want to use rather than something that only made sense to the sustainability team," she said.

The next milestone to watch is the procurement team's pilot and broad rollout, which will determine whether the AI screen becomes a standing gate in Royal Mail's purchasing process — and whether the operator stays on track for its 2030 Scope 3 target.