Following the impactful 28th United Nations Conference of Parties (COP28) in December 2023, EcoRatings achieved a significant milestone by officially launching a revolutionary AI-powered approach to ESG (Environmental, Social, and Governance) ratings for products and services on December 5th at the conference. Founded by the visionary trio Aditi Balbir, Shruti Anand, and Aqeel Ahmed, EcoRatings stands as a pioneering platform dedicated to evaluating sustainability at the product and service level.
Leveraging advanced artificial intelligence, EcoRatings utilizes a robust data-driven model for comprehensive ratings on a scale of 1 to 10. Its innovative data collection techniques, encompassing web scraping, satellite imaging, and reliable third-party data sources, set it apart in a field with multiple ESG rating initiatives.
In a thought-provoking dialogue with TheCSRUniverse, Ms. Aditi Balbir, Co-founder & CEO, EcoRatings, shares insights into the inspiration behind EcoRatings and its unique value proposition as the first AI-powered platform in the ESG ratings realm. She delves into the platform's alignment with the United Nations Sustainable Development Goals (UNSDGs) and its envisioned impact on global sustainability efforts. Additionally, Ms. Balbir discusses EcoRatings' data-driven accuracy and plans to track its impact on consumer choices and corporate sustainability. She also shares insights on partnerships, real-world impact, and sustainability strategies.
Scroll down for a comprehensive view of EcoRatings' role in shaping a more sustainable future post-COP28, emphasizing the team's commitment to positive change in ESG evaluations.
Q&A
Q. What inspired the creation of EcoRatings, and in a field with multiple ESG rating initiatives, how does it set itself apart as the world's first AI-powered platform, offering a distinct value proposition?
A. My first venture was an eco-tourism venture, where we created ESG reports at the unit level for investors. I felt that consumers and companies could both benefit from unit-level ratings that could be instrumental in creating a transparent world. EcoRatings distinguishes itself through its innovative data collection techniques, such as web scraping, satellite imaging, and other reliable third-party data sources. Unlike traditional approaches, there are no on-site audits or self-assessment forms for ESG ratings, thus presenting a distinctive value proposition in our methodology.
Q. As AI-powered tools like EcoRatings gain traction, how do you foresee regulations and standards evolving to ensure responsible and trustworthy applications?
A. Policies are keeping track of ESG developments and institutions like SEBI are registering ESG rating service providers. Moreover, technology has the added benefit of traceability and all data sources, business logic, and industry standards are shared and transparent to ensure no bias.
Q. How does EcoRatings use a data-driven approach, including web scraping and satellite imagery, to ensure accurate ratings and prevent greenwashing risks?
A. Every piece of technology leaves a trace. EcoRatings audits the green claims of companies by using 2-3 techniques to check one particular fact. For example, raw material sourcing can be checked from 2 methods: one is the traceability certification and the other is indigenous vegetation cover seen through satellite imagery.
Q. EcoRatings focuses on the United Nations Sustainable Development Goals (UNSDGs). How do these goals guide and shape the platform's initiatives, and what impact do you envision having on global sustainability efforts?
A. EcoRatings is deeply aligned with the UNSDGs, using them as a fundamental framework to direct and mould our platform. The 17 SDGs have 250 sub-indicators, which are translated into data points that are checked and verified through data sources, business algorithms and industry standards. Through these ratings, all industries become transparent on ESG efforts leading to greater accountability and responsible practices within industries.
Q. Beyond ratings, how will EcoRatings track and measure the actual impact of its platform on consumer choices and corporate sustainability practices?
A. EcoRatings will measure the visibility and increase in revenue of products that are rated so as to ensure direct benefits to conscious companies.
Q. Can you quantify the platform's real-world impact, specifically in pushing brands and entire industries toward tangible advancements in responsible sourcing, supply chain transparency, and strengthened sustainability goals?
A. It is still too early to quantify the impact of the ratings as the venture is very new and the ratings have been delivered only in this quarter. Companies today have also started prioritising sustainability efforts as they are mandated to produce BRSR reports.
Q. How does EcoRatings aid businesses in supply chain transparency for consumer products and sustainable practices? What's its plan for B2B ratings and corporate supply chain influence
A. Since EcoRatings does product-level ratings, we specifically rate the supply chain of a particular product in order to arrive at the final rating. In that sense, we are the only technology on sustainability that can measure scope 3 emissions of a particular product.
Q. How does the platform plan to capitalise on the momentum from COP28 to foster concrete actions and partnerships, driving its mission for sustainable consumption and business practices?
A. Given the drive-in sustainability movement in COP28, the market has expanded across geographies. After COP, we realised that the problem remains the same, while the top 100 companies can afford expensive consultations, the same is not true for small-medium enterprises. Our product offers these businesses a more affordable and quicker rating option through AI, completely eliminating the need for human intervention.
Q. From climate migration to ethical sourcing, what trends will redefine sustainability, in your opinion? How will EcoRatings evolve to stay ahead of the curve and empower responsible choices
A. Conversation is still the same- mitigation and elimination of fossil fuels, to do that a lot of capital is required. EcoRatings looks at the other side- consumer/supply chain side where if the transparency is very high, it puts pressure on industries to be more sustainable. EcoRatings also has great synergy with the Mission LiFE movement, which is expected to be an India-led global mass movement that will nudge individual and collective action to protect and preserve the environment.
