EcoVadis Raises $500m Accelerating The Race To Conquer Scope 3 Emissions
28, June 2022
EcoVadis Raises $500m Accelerating The Race To Conquer Scope 3 EmissionsOn 14th June 2022, EcoVadis, a business sustainability ratings provider, announced that it had raised $500m — the largest equity financing for a sustainability data provider to date. The deal, co-led by Astorg and BeyondNetZero with participation from Singapore-based GIC and Princeville Capital’s Climate Technology Fund, puts EcoVadis’ total capital raised at over $725m, making it the latest ESG data unicorn. EcoVadis will use the capital to continue to develop its artificial intelligence and machine learning capabilities and finance strategic acquisitions.
Over the last 18 months, EcoVadis — which boasts an impressive portfolio of clients including Amazon, Johnson & Johnson, L’Oréal, Unilever, LVMH & Salesforce — has experienced 50% revenue growth, a 105% global workforce increase and expanded its offering. In March 2021, it added a Carbon Action Module to its suite of solutions which is now being used by 15,000 firms to manage supply chain emissions. Earlier this year supply chain data management providers Assent and Higg raised $350m and $50m, respectively. This series of major investments in supply chain sustainability software, culminating in the $500m EcoVadis deal, is indicative of the growing demand for a solution able to adequately tackle Scope 3 emissions.
Unlike Scope 1 and 2 emissions which can generally be calculated using primary data, Scope 3 emissions are not within a firm’s direct control and as such are inherently more difficult to quantify. Scope 3 emissions can cover everything from employee commuting to production of packaging materials. And while it is the breadth of the Scope 3 category which makes it so difficult to measure, the breadth is also what makes it a key business priority. As stakeholder and regulatory pressures to report on Scope 3 emissions increase (the consultations over the SEC’s proposed rule on climate-related disclosures are a case in point), there is a massive market opportunity for new digital technologies focusing on Scope 3 emissions. The question is, who will take the market share?
There are some interesting technology providers jostling for space, including vendors focused on enterprise and employee carbon tracking and management, supply chain ESG reporting, supplier risk mapping and supplier sustainability ratings. Yet with supply chain emissions quickly becoming one of the most difficult and impactful areas to tackle within Scope 3, it is likely that the market will be dominated by a provider which can conquer the challenge of collecting meaningful emissions data on increasingly complex supply networks.
For more information on the evolving ecosystem of software vendors which has emerged to meet this demand, look out for the upcoming Verdantix Buyer’s Guide on Supply Chain Sustainability Software.