• Ecovadis announced a $500 million round last week, more than doubling its existing funding.
  • Ecovadis provides ESG scores for suppliers so corporations can make supply chain decisions.
  • The company will use the funds to make multiple acquisitions — the first by the end of this year.

The global economy may be heading down, but spending on tools to improve corporate sustainability is up, according to Ecovadis. 

Ecovadis rates companies on environmental, social, and governance (ESG) performance so that buyers at large corporations — and increasingly investors too — can evaluate their decision-making through that lens. 

The Paris-based firm announced $500 million in additional funding last week from private equity and impact investors, bringing its funding total to more than $725 million. European private equity firm Astorg and BeyondNetZero, General Atlantic’s climate investing venture, led the round with participation from Singapore-based GIC and Princeville Capital’s Climate Technology Fund.

Ecovadis cofounder and co-CEO Frédéric Trinel told Insider the size of the funding round is a reaction to demand for Ecovadis’s product, which he sees as a sign that corporate sustainability reaching a tipping point.

“Four years ago, we were at 30% growth. Three years ago, at 35%. Two years at 40%. Last year at 45%. This year we are 50% growth,” Trinel said.

Ecovadis has around 95,000 customers today, he said. Most of those are suppliers that pay to be rated by Ecovadis. But nearly 1,000 are corporations with buying power. “We need to go after millions,” Trinel said. “It’s good to have fuel in the tank so that we can really invest when needed.”

Most companies tend to start by addressing emissions they control, like the ones from building and vehicles they own and operate. Addressing supply chain emissions usually comes farther down the road, so the progress corporations are making toward setting firm ESG goals for their suppliers as corporate programs mature is driving more business to Ecovadis.

New regulations and greater enforcement of existing laws in the EU is driving adoption of the Ecovadis platform too, Trinel said.

Ecovadis integrates with existing software that businesses already use, like enterprise procurement platforms. The ESG score annotates the supplier information in those interfaces, so that decision-makers can integrate it into their everyday tasks. 

The new funds will go toward acquisitions — the company’s first is already in the works, Trinel said. He’s aiming to improve the company’s ratings with artificial intelligence and other emerging technologies.

Here’s the pitch deck Ecovadis used to more than double its money in a shaky economy. 

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