Sustainability data startup EcoVadis raises $500 million

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Sustainability data startup EcoVadis Inc. today announcement that it closed a $500 million funding round led by private equity firm Astorg and BeyondNetZero, the climate investment arm of General Atlantic.

The Series C round is described as the largest ever raised by a software-as-a-service startup in the sustainability data segment. Since its launch in 2007, EcoVadis has raised a total of $735.5 million from investors.

“We believe EcoVadis has all the essential elements to make a global impact and a meaningful contribution to the transition to net zero, including a high-quality business model, strong leadership, innovative technology and a bold vision to drive ESG-driven transformations in supply chains and industries,” said BeyondNetZero CEO Rhea Hamilton.

The company, which has offices in New York and Paris, provides a platform that helps organizations assess the sustainability of their business operations. A company can also use the platform to gain insight into supplier sustainability efforts. EcoVadis claims to work with more than 95,000 organizations, including Amazon.com Inc., Johnson & Johnson, Salesforce Inc. and other large enterprises.

EcoVadis assesses a company’s sustainability efforts based on 21 different criteria. The methodology with which the startup carries out the assessments is overseen by a scientific committee made up of experts from industry and academia. Based on its assessment of a company’s operations, it generates a score that leaders can consult to measure the effectiveness of the company’s sustainability efforts.

The company service highlights areas where a company should improve its sustainability program. The startup’s platform tracks how an organization’s performance has changed over time, as well as how it compares to industry peers. To help organizations accelerate their sustainability initiatives, EcoVadis also offers access to educational resources through a tool known as the EcoVadis Academy which debuted last November.

According to the startup, companies can use its platform to not only assess their own sustainability efforts, but also gain insight into suppliers’ business practices. EcoVadis claims that the platform performs the supplier evaluation process more efficiently than traditional approaches.

Typically, organizations measure supply chain sustainability by collecting data on their suppliers’ business operations through questionnaires. In a large company, collecting and processing sustainability questionnaires can require a significant amount of manual work. EcoVadis claims its platform is up to 80% more cost effective than manual approaches.

By reducing the amount of effort involved in such assessments, the startup also makes it easier for companies to track changes in key sustainability indicators over time. This data can help organizations implement improvements more effectively. According to EcoVadis, more than 72% of suppliers using its platform improve their sustainability score over time.

EcoVadis will use the new $500 million round to add more AI capabilities to its platform. Another part of the capital will be used to make acquisitions. According VentureBeatthe startup is already in negotiations to acquire a number of companies and plans to integrate their technologies into its platform.

“This investment validates EcoVadis’ model for expanding impact across global value chains, despite the pandemic, geopolitical or financial headwinds,” said co-founder and co-CEO Frédéric Trinel. “We continue to experience record demand as more companies are empowered to integrate the planet and society into their business operations.”

A number of the biggest players in the enterprise technology market also offer software tools that can help companies advance their sustainability initiatives. In March, Amazon Web Services Inc. made its debut a tool that allows customers to assess the environmental footprint of their applications. Salesforce, meanwhile, offers a product called Net Zero Cloud that streamlines tasks such as planning sustainability initiatives.

Image: EcoVadis

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