When it comes to sustainable procurement and supply chain initiatives, I've been paying a lot of attention to Aravo over the past few months. This in large part is owing to the diligence and passion of Tim Albinson, an environmentalist by background and CEO of Aravo, who has been front and center evangelizing sustainable supplier initiatives. But Aravo is not the only player in town -- or on the other side of the pond -- when it comes to sustainability. Ecovadis, a France-based start-up, is targeting the sustainability opportunity in Europe, albeit they're coming at it from a slightly different angle (but more on that in a minute).
Ecovadis, like Aravo, provides a platform from which focuses on evaluating and monitoring supplier practices which fall under the green and sustainability banner. These include environmental and operational practices (e.g, energy consumption, water usage, materials, Co2 emission, etc.). But Ecovadis also considers labor practices & human rights (e.g., health and safety, child & forced labor), fair business practices, customer and product responsibility and sustainable procurement (e.g., supplier product responsibility and overall business practices).
What's the major difference between Aravo and Ecovadis (besides geographic focus)? The answer is somewhat enlightening and has little to do with software. Rather, Ecovadis' major positioning and go-to-market push is focused primarily on helping European companies meet emerging green and sustainability regulatory requirements (in addition to, as they term it, brand protection, shareholder demands, customer expectations and preserving the overall image of the procurement organization). Aravo, in contrast, is not as centered on regulatory compliance -- though certainly that is a component of what they offer -- but rather US/Western companies who want to truly break out from the pack when it comes to overall sustainability and green supplier initiatives.
This difference in philosophy is not at all surprising. But it is telling. In Europe, companies champion green and sustainability because they have to. EU and country-specific laws require it. But in the US, at least so far, green and sustainable supply markets regulation has been minimal. Still, however, leaders such as Wal-Mart and others have emerged from the crowd and put the sustainable message front-and-center in their marketing efforts and overall business philosophy. Long term, while I'd bet on both Aravo and Ecovadis from a market perspective -- provided the investment is there, this space could support numerous providers -- I'd sooner support the US perspective that green wins because of the market, not regulation in the long run.
In a follow-up post on Ecovadis early next week, I will share some more details on their solution as well as their findings from some benchmarking work they did with Ariba examining green and sustainable company trends, adoption and philosophy in the European market. Clearly, as sustainable supplier strategies continue to gain steam -- non-coal powered steam, that is -- in the coming years Ecovadis will be a provider for all of us to watch (on both sides of the pond).
- Jason Busch