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Is the world ready for deeper and more comprehensive reporting on environmental, social, and governmental (ESG) matters? Diginex just announced a $6 million bet that it is. Today it’s closing a series A round led by Fitch Ventures, the equity investment arm of Fitch Group.
Diginex offers three major products that help track how an enterprise may be fulfilling its goals. DiginexESG tracks the major sustainability metrics tracking risk and resilience. DiginexLUMEN is a suite of tools for gathering and analyzing data about working conditions along a supply chain. DiginexCLIMATE focuses on environmental stressors like the carbon footprint. Together, all three address many of the most prominent challenges facing modern businesses.
The new funding round also coincides with the arrival of Dr. Tomicah Tillemann as board director. He is the outgoing executive director of the Digital Impact and Governance Initiative at New America and former senior advisor to Joe Biden and Hillary Clinton.
The company’s business model is Software-as-a-Service (SAAS) that incorporates some of the latest technologies, like a blockchain and some machine learning models. The ESG tool, for instance, gathers reports from partners along the chain and tracks them as the data is posted to the blockchain. The users set targets, audit results, and create reports based on the cryptographic foundations enabled by the blockchain.
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A similar approach is deployed to track working conditions with DiginexLUMEN. The tool attempts to “democratize supply chain risk assessment” by collecting information about working conditions, which will reduce the need for expensive and sometimes dangerous in-person audits.
The investment is part of an ongoing effort by Fitch Ventures to invest in companies that are targeting some of the most important social goals.
“The ESG market continues to grow and innovate at a rapid pace but, with taxonomies still evolving, harmonization of standards remains a challenge,” explained Andrew Steel, global group head of Sustainable Finance at Fitch Group. “Diginex’s product platform is a significant market enabler for companies seeking to gather, manage and disclose ESG data and for investors seeking better quality consistent ESG information.”
Fitch emphasized that it saw Diginex as a crucial way to integrate softer, more socially responsible data with harder financial models like credit scores.
“Fitch is the only credit rating agency with a comprehensive, systematic, and credit-focused approach showing how ESG factors affect credit ratings,” said Shea Wallon, managing director at Fitch Ventures said in the press release announcing the funding round, “It’s through this lens that we are excited to back Diginex as the team drives the business forward to offer ESG reporting solutions that work for companies of all sizes. It’s a hugely exciting opportunity for us and we are very proud of our involvement in this purpose driven business.”
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