Pierre-François Thaler, Co-Founder and Co-CEO of EcoVadis, the world’s most trusted provider of business sustainability ratings, intelligence and collaborative performance improvement tools for global supply chains.
During the conversation, Pierre-François shared his thoughts on finding the right business model, scaling business, focus, import tax and… being kind.
1. What’s EcoVadis’s mission?
EcoVadis’s mission is to drive improvements in companies sustainability performance, throughout global supply chains. We are doing this by creating the first global collaborative SaaS platform for business Sustainability ratings, blending technology and expertise in order to lower barriers to access to reliable data of their suppliers performance.
We are a purpose driven company aiming to integrate Sustainability metrics into companies’ procurement decisions and strategies so they can prioritise sustainability, and ESG along with cost, innovation and delivery.
“Our objective is to drive impact at scale. Using a pure tech approach you can scale a lot with limited impact. With in depth consulting you can have deep impact…but limited scale.”
We’ve rated 100,000 companies, and are supporting 600 large procurement organisation representing 2 trillion dollars of annual spend, so we act as a good compromise for impact and scale.
2. What have been the most significant decisions in the EcoVadis journey so far?
EcoVadis was founded 14 years ago. At the time, there was no such thing as ESG, nor was a clear definition of what was “Sustainable Procurement”, which was really nascent. We have grown progressively over the years and the three main things we have focused on are developing the right CSR Rating methodology, internationalisation and finding a scalable business model.
We had many temptations over the years to expand and cover other areas such as financial risk, but we have always remained focused on sustainability. We internationalised quite quickly signing the first international customers when we were only 15 people. 80% of our revenue is now outside our home market, with customers in 170 countries.
We quickly realised sustainability challenges are global, including issues of CSR in India and China for example. In terms of our business model, at the beginning it was difficult to get CPO’s to find significant budgets on CSR so we created a business model that made CSR accessible to everyone by sharing the costs between all participants, buyers and suppliers, of our network. The EcoVadis network model makes a big difference for participants.
3. What do you look for in the perfect customer (and can you share an example) and what do they look for in you?
“The perfect customer is one who challenges the service provider yet they are ambitious and demanding of themselves.”
For example, 10 years ago we worked with Faurecia (automobile company). Their procurement team decided to set a very ambitious goal: they wanted to manage sustainability in their supply chain systematically and push 100% of their strategic suppliers to engage in improvements. It proved to be very ambitious but was a great success in the early years. It’s a real example of a customer challenging you so you improve your solutions.
4. What are the foundations of a great team?
Core values are a key foundation which act as a glue between all members.
It’s important when you have 50 people but it’s critical when you start to have 1,000 people. At EcoVadis, it’s about being kind with one another and understanding that if we want to change the world on a large scale, we need to focus on customers as they are the linchpin of change. Our values filter from hiring people through to defining new products.
5. As we emerge from COVID what will you be doing differently?
Personally, I have stopped travelling for the past two years and will probably do 10 times less when things pick up again.
We were efficient before being remote. We have a unique product, but it has continued to work well as we have worked remotely. We can still have meetings virtually, focus on our ethics and carbon targets which we are setting up for the next couple of years.
I’d say the biggest change is that there are no more geographical limits when we want to find talent. We’re hiring 400p this year and for many roles are very flexible on location. Of course we still need to take time zones into account.
6. What is the vision for EcoVadis for the future and what will be most important to achieve it?
We have our theory of change: if we want to drive change on scale, we need to use levers. Picture a big set of cogwheels, where you have EcoVadis at the beginning which is slightly smaller, compared to the 600 large corporates and their procurement spend. But the cogwheel of those 600 corporates, is now able to drive change with 100,000 suppliers today….probably 1 million tomorrow.
“We are trying accelerate this network effect as much as we can so that we don’t limit resources and can push these companies who have a huge impact on the ESG impact.”
If you look at the global 500 companies in the top Fortune 500, they are collectively spending $13 trillion, which is bigger than the GDP of all countries but 2!
Over the next five years, our objective is to move billions of dollars of spend towards more sustainable businesses and products. It comes down to CEOs eliciting change in their organizations, also dealing with issues such as diversity. There are billions of dollars of spending being invested in companies doing the right thing from a social perspective. To continue achieving this, we need to keep scaling: we are growing by 50% each year!
Some of the most difficult things to measure is the impact of change in carbon emissions as quality of data is still very poor and not widely available. In 2021 we measured that only 15% suppliers we engage are able to report on Carbon emissions don’t really measure things. We have 10 years to make a huge shift on decarbonization of supply chains…and the first thing to do is ensure that 90% of businesses will be able to measure GHG emissions and drive reduction.
7. How are you doing good for the planet?
“Driving Sustainability improvements is at the heart of what we do, pushing thousands of businesses every year to engage into sustainability improvements, so that they can improve their rating used by customers in procurement decisions.”
But we’re also trying to do more, through advocacy or knowledge sharing.
We are for example trying to push for smarter regulations when it comes to sourcing and supply chains, so we have published white papers and open comments regarding the EU’s duty of care and carbon regulations, which are currently being debated.
We’re also making data widely available. The EcoVadis Index report published every year, gives benchmarks on Sustainability trends in each of the Regions and Spend Category we cover.
INSTANT PIERRE INSPIRATION
1. What is your favourite blog and why?
I like the Unchartered Territories blog by Tomas Pueyo. He has been publishing blogs about COVID since it kicked off. He is from the tech world and he analyses available data to provide interesting insights about the matter for the industry.
2. Who is your favourite inspirational leader & why?
Bill Gates: not so much from Microsoft, but for what he’s been doing since with his philanthropy and charitable endeavours to raise awareness for key issues around the world such as getting sanitation in poorer countries, dealing with malaria etc.
3. What is your favourite app or piece of technology?
I would be sad if Wikipedia did not exist anymore. I think it’s an incredibly elegant way to solve a big problem. Problems are even bigger today with fake news, so this makes rightful information free to everyone in a more distributed way which is important now more than ever.
4. What is your favourite cocktail?
A classic gin and tonic as it is a legacy from when I lived in Indonesia with British friends. In fact, I only re-discovered it recently as there are now so many more flavours of G&Ts, so I have to be careful to not drink one everyday!
5. What’s your favourite way to celebrate success?
I think it depends if it is to celebrate a business success, family success, or a friend’s success. I think it will always involve some form of good food and good wine, getting together and music.
1. To drive change on a massive scale, use the power of levers and the ‘fly wheel’ effect to impact the whole supply chain.
2. Finding the right business model may take time.
3. Remain very focused on your mission, beware distractions.
4. Utilise data to the advantage of many not the few.
5. Impacting sustainability requires engagement of governments and regimes
6. Stay true to your values throughout the business, from customers to solutions.
7. Be kind to one another to create a strong team foundation.
EcoVadis is the world’s most trusted provider of business sustainability ratings, intelligence and collaborative performance improvement tools for global supply chains. Backed by a powerful technology platform and a global team of domain experts, EcoVadis‘ easy-to-use and actionable sustainability scorecards provide detailed insight into environmental, social and ethical risks across 200+ purchasing categories and 160+ countries. Industry leaders such as Verizon, Johnson & Johnson, Subway, Coca Cola European Partners, Salesforce, Renault-Nissan, ING Bank, and Nokia are among the more than 75,000+ businesses on the EcoVadis network, all working with a single methodology to evaluate, collaborate and improve sustainability performance in order to protect their brands, foster transparency and innovation, and accelerate growth.
Our industry is moving forward faster and faster, empowered by innovative, progressive digital procurement solutions created and led by inspiring teams. ProcureTechSTARS are the digital procurement company CEOs and Founders that are leading the change, they are entrepreneurs, engineers and architects collaborating to transform procurement and the enterprise. In an open conversation with these leaders Lance Younger will be discussing the highs and lows of building the future now, the challenges they’ve faced, their perspective on accelerators and hot topics, and what keeps getting them up in the morning (and keeps them up at night).