• The business sustainability corporation works with over 95,000 businesses in 200 industries and 175 countries.
  • EcoVadis plans to allocate some of the new investment to enhance its software platform.

Recently, EcoVadis, the leading provider of globally trusted business sustainability ratings, announced that it had raised USD 500 million in a new funding round from investors who firmly believe that aggressive monitoring can help improve the environmental impact of every company along the supply chain. The most trusted provider of business sustainability ratings plans to use the proceeds to expand its delivery of what it calls “sustainability intelligence” so that its clients – and their investors – can enhance business processes from the start to the end.

The business sustainability corporation works with over 95,000 businesses in 200 industries and 175 countries. It evaluates and delivers scorecards that help companies assess their inputs and efforts toward creating a more sustainable economy. The insights provided by EcoVadis also help guide financing decisions made by private investors and banks who prioritize ESG (environment, social, governance) goals.

Frederic Trinel, a cofounder who serves as co-CEO, explained, “We do this for procurement, and we do this for the finance world as well so that the private equity can monitor their investments for you.”

“They can select new targets based on ESG performance and, overall, the market is incentivized to improve on those subjects. That’s really what EcoVadis is after: To guide all companies towards sustainability.”

Reaching ESG goals

Several other groups also help companies reach ESG goals but often, they take very different paths. For example, Ayana and Bright Funds hope to help companies engage their workers by helping them find opportunities to volunteer. Millie helps build a “social impact program” around philanthropy. Selflessly offers a portal that allows you to track, guide, and celebrate giving throughout the workforce.

Some firms focus more on environmental goals and assist companies with their overall supply chain. GreenBizCheck monitors what it terms Corporate Social Responsibility and offers CSR (Certificate Signing Request) certifications after inspecting the energy, water, recycling, and transportation systems used throughout the procurement process.

Esolidar offers its clients a single portal that keeps track of all ESG and CSR goals in one place, including the environmental concerns. FigBytes provides a platform that tracks all ESG goals, something that can help companies file the necessary paperwork with the SEC.

EcoVadis plans to allocate some of the new investment to enhance its software platform. The negotiations are already in process to either merge or acquire several firms. This will enhance the general software platform used to score corporate ESG practices.

Balancing scalability, cost, automation

EcoVadis hopes that the proper use of Artificial Intelligence (AI) will allow it to make wiser and mechanized decisions about the companies. Algorithms that take a deeper look into corporate data come in handy to explicitly improve its scorecard.

Frédéric Trinel, Co-Founder and Co-CEO of EcoVadis explained,  “There are many areas where cutting edge tech like AI is helping along the process. We’re increasing the reliability of the score by really looking at how the company is providing evidence and statistically analyzing whether the company is in a normal pattern.”

To reach such significant goals means relying heavily on technology. Some firms offer elaborate, human-run audits that are labor-intensive. While they can be helpful, they can be expensive for many companies.

Frédéric Trinel explained, “You could spend six months in a company if you’re an auditor, but that will not scale. We are finding the right balance between automation, scalability and cost. We [work with] 95,000 companies today and need to go after millions – three or four million companies.”

The business sustainability corporation also hopes and is working towards improving the reliability and accuracy of its assessments. It also hopes to expand the current criteria by which companies are graded and enhance the evolution of the process.

Frédéric Trinel said, “Many people are focusing on the carbon footprint, and this is one of the 21 criteria that we are assessing because, as you know, decarbonization of the society and in particular of the supply chain is a huge challenge and innovation here will help. But there are many others because the ESG spectrum is maturing worldwide. As it matures, we are going into further detail on, for instance, water pollution or DNI (diversity and inclusion). There will be tools to help our customer better manage each of those subjects as the maturity grows.”

The company also plans to boost its evaluation of biodiversity, particularly by judging how a firm and its practices either help or hurt biodiversity in its ecosystems.

Astorg, a European private equity fund and BeyondNetZero, the climate-focused fund from General Atlantic, led the current round of funding worth USD 500 million. Some other participants include Singapore-based GIC Private Limited and Princeville Capital.