EcoVadis Acquires Ulula, Placing a Focus on Human Rights Reporting in Supply Chains

Compliance companies are doubling down on their offerings as the regulatory environment for sustainability and human rights heats up, particularly for companies doing business in Europe.

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EcoVadis , a platform that helps large companies and suppliers with their environmental, social and governance (ESG) compliance, announced Wednesday it had acquired Toronto-based Ulula, a technology company with a specific focus on human rights impact.

Ulula’s technology allows employees to provide anonymous feedback on working conditions and grievances, in addition to its survey mechanisms, which regularly check in on employees’ self-reported well-being via surveys.

As companies begin to determine how to comply with new regulations, like the EU’s Corporate Sustainability Reporting Directive ( CSRD ), many are required to provide a mechanism for worker grievances throughout the supply chain. Pierre-François Thaler, co-founder and co-CEO of EcoVadis, said those requirements made now the right time to acquire a technology to help brands and retailers keep up.

“The regulatory landscape is changing and what was voluntary is becoming mandatory,” Thaler told Sourcing Journal. “We discussed with [Ulula] six months ago and we said, the window of opportunity for this market is going to become huge in the next two years.”

Thaler declined to disclose the financial details of the deal, though he noted that Ulula’s revenue, which falls somewhere in the range of “10s of millions of dollars” was used against a standard valuation multiple.

Antoine Heuty, CEO of Ulula, said that, although some suppliers haven’t necessarily welcomed the technology with open arms, their compliance has to come in some form or another, and Ulula may help them clear audit hurdles they might otherwise face.

“We’re just changing the means of verification. If you are a supplier, you’ve signed a code of conduct, and instead of receiving 10 auditors, maybe you just do a couple of worker voice surveys that are going to be more usable for you,” he said. “The question is not whether you want to [use] grievance mechanisms or not; it’s, you have to do that, and you have to show the proof of that…What we’re providing is concrete evidence and things that you can share with all your buyers.”

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Thaler said bringing Ulula into the picture could help EcoVadis tap into industries it has historically had fewer clients in, like apparel and retail, though the two companies did share some mutual clients that will continue to benefit from both solutions.

And ultimately, the goal is to help suppliers and brands reform any labor issues before they reach a boiling point.

“Being able to directly reach out to workers is a better way of identifying risk than just waiting for [complaints to appear on] Facebook or Twitter,” Heuty said. “The idea of Ulula is not just to provide resources of data; it’s to provide them in a timely manner so you can proactively engage workers…It’s good business, but it’s also now a legal requirement.”

Though the technology may help companies avoid scandals and mistreatment of workers, it also ensures employees who lack access to the internet outside of work are represented in the picture of workers’ rights and experiences.

EcoVadis plans to onboard Ulula’s entire team into its organization, and that group will be tasked with further building out EcoVadis’ human rights impact capabilities. Thaler said it’s likely the company will begin integrating direct worker feedback into each supplier’s EcoVadis score, which helps buyers determine their potential partners’ progress on ESG goals.

Going forward, the organization plans to use Ulula’s worker voice technology as one piece of a broader human rights due diligence solution, which takes into account living wages and the wants and needs workers share.

“If workers don’t have the basic resources to support their family, they’re certainly not going to be able to do what is required in terms of climate change—so the two topics are really connected. We have a scalable platform for climate now, and we are making the platform for social and human rights stronger,” Thaler told Sourcing Journal.

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