Entrepreneur

Ecovadis helps businesses green their supply chains

Editor’s note: This is part of VentureBeat’s series “Startup Spotlight.” Every week, we’ll sift through the scores of companies applying to be promoted and profile the best one. Companies can sign up here at the Entrepreneur Corner, which is currently sponsored by Microsoft. (Of course, we’re still interested in covering startup news and innovation in our day-to-day coverage.) Today, we continue the series with Ecovadis, below.

Startup Ecovadis provides companies with a software platform that lets them weigh the environmental and humanitarian impacts of their supply chains — even those that circle the globe. Essentially, it scores suppliers based on sustainability and social responsibility criteria, helping their clients make more informed decisions, the company says.

What makes Ecovadis’ platform unique is its collaborative features. When companies are determining how to best create reliable and efficient supply chains, they gather input from their procurement departments (obviously), but also their engineering and design divisions to better understand what is necessary and why. Ecovadis takes this team approach into account, allowing for direct and continuous communication between engineering and procurement personnel so that the overarching company can optimize its transactions while still acting sustainably. This collaboration also includes the suppliers themselves, so that they can hold open dialogue with customer companies on how they can make their processes more sustainable. For example, a company could suggest that a particular vendor use less packaging, or more recycled material.

Ecovadis specializes in suppliers in four categories: retail, automotive, IT and pharmaceuticals. Each of these areas comes with its own set of environmental and humanitarian concerns. The company says its platform is intended to highlight labor issues, as well as environmental or conservation problems. So, for example, in the retail sector, supplier scorecards take a hard look at child labor risks. For IT, they examine energy efficiency and recycling capabilities, etc.

By highlighting these problems early on, ideally before a company’s supply chain has been finalized, Ecovadis spares its customers risks, in terms of finances and reputation. Just think of the number of companies that have taken a public hit due to poor overseas labor practices. Also, with the federal government looking to institute more stringent energy and carbon reporting standards, more companies are scrambling for services like Ecovadis’ so that they can answer for their suppliers’ emissions and activities. The startup even suggests that its platform could lure the growing number of investors looking for sustainable portfolio companies.

Ecovadis rates suppliers across 150 categories, including batteries, plastic packaging, labels, freight transfer, waste management, temporary labor, office furniture — and the list goes on. For each of these service providers, it looks at labor relations, health and safety compliance, potential discrimination, corruption, anti-competitive practices and truth in marketing — in addition to its environmental analysis.

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In addition to its lead software, Ecovadis offers several related services. For example, its Country Risks platform helps company leaders understand geographical, political and economic risks specific to various countries where they might operate. It assigns scores based on data collected from the World Bank, the United Nations and Transparency International, among others. The company also offers a software package to train procurement personnel. Employees that take the course will learn about the challenges unique to their sector and about changes that can radically improve a company’s environmental and social footprints.

To make this possible, Ecovadis depends on several powerful partnerships with the likes of Microsoft (which provides some of the technology), Price Waterhouse Coopers (which helps the startup keep a closer watch across many supplier categories), and the Global Reporting Initiative (which standardizes the way companies report on the social and environmental affects of their activities).

Based in France, Ecovadis is run by executives with impressive combined experience in supply chain management and socially responsible marketing. The company has raised $1.5 million from angels and strategic partners, which it says is enough to commercialize its products and even hit profitability.


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