Sustainability data firm EcoVadis joins $1 billion club after fundraising

  • Astorg, the main funder of General Atlantic’s BeyondNetZero
  • Singapore’s sovereign wealth fund GIC also participates
  • Cash to help fund acquisitions and global expansion

LONDON, June 14 (Reuters) – Sustainability data firm EcoVadis has raised $500 million to become one of the industry’s first “unicorns”, its co-chief executive told Reuters, as demand companies to monitor their performance on environmental and social issues is increasing.

A unicorn is an unlisted company valued at $1 billion or more.

The funding, led by private equity firms Astorg and BeyondNetZero, the climate investment arm of General Atlantic, as well as Singapore’s GIC and Princeville Capital, is the largest fundraising round to date for such a company, said declared EcoVadis.

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This brings the total capital raised by the company to over $725 million.

Used by more than 95,000 companies in 200 industry categories and 175 countries, EcoVadis provides ratings on environmental, social and governance (ESG) issues and helps create plans for companies to improve their score.

Unlike most ESG ratings providers, the bulk of EcoVadis’ coverage relates to small, often private companies, which make up the majority of large companies’ supply chains.

Understanding the ESG performance of smaller suppliers is becoming increasingly important for larger companies as they face regulatory pressures to improve the sustainability of their supply chains and help achieve their own climate goals.

The European Commission recently proposed rules that would require corporate boards to verify that suppliers do not use slave or child labor and comply with environmental standards. Read more

General Motors (GM.N) and Deutsche Bank (DBKGn.DE) are among the leading companies to have recently referenced EcoVadis when launching plans to boost supplier ESG performance.

“We see a tipping point in the market. Everything is really accelerating,” said co-founder and co-CEO Frédéric Trinel. “When you look at the numbers, this year EcoVadis is going to grow by 50%, last year we grew by 45%, the previous year by 35% and the year before by 30%. So every year we have gained five growth points.”

Trinel said the funding would help the company’s growth plans, including through acquisitions, in North American and Asian markets and strengthen its technology. It employs around 1,300 people.

“Most of our growth today is coming from the North American market. Getting on board General Atlantic in addition to Astorg as co-leaders in this round is really a way to continue accelerating in the market North American,” he said.

The U.S. Securities & Exchange Commission is currently considering new ESG disclosure rules for companies, although the role of such information in rewarding or penalizing corporate boards is hotly contested. Read more

Despite this, Rhea Hamilton, CEO of BeyondNetZero, said the global drive by businesses to control their impact on the environment and society will drive demand for better data.

“The number of times ESG is brought up in the boardroom now is phenomenal compared to maybe a decade ago, and it’s not going away,” she said. at Reuters.

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Reporting by Simon Jessop Editing by Mark Potter

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