~Bizongo becomes the first B2B marketplace to help the sector turn ESG compliant~
~Aims to leverage its vendor digitization platform to support MSMEs in transitioning to more Environment Social and Governance (ESG)-compliant operations and meet the global demand~
Mumbai, February 07, 2023: In a bid to enable 100,000 MSMEs turn ESG compliant in the next 24 months, Bizongo, a leading vendor digitization platform with embedded financing for brands and enterprises has launched Bizongo environmental, social, and governance (ESG) Scorecard. This will help bolster ESG consciousness among Indian MSMEs and larger enterprises. With this, Bizongo has also become the first B2B marketplace to offer ESG-related intelligence.
Aniket Deb, Co-founder & COO, Bizongo, said “In its essence, ESG is a framework that helps businesses build customer loyalty, attract investors, make operations sustainable, and improve financial performance. In line with this, Bizongo’s ESG Scorecard will enable MSMEs on its platform assess their ESG performance and help them integrate it into their internal policies and practices.”
The scorecard will allow MSMEs to monitor and track their compliance across various ESG components, including social parameters, such as minimum wage policy, Child labor and Forced labor, Harassment and Discrimination, and product quality and testing. It will also focus on environmental parameters, such as the Environment Management System (or ISO 14001, energy management process/policy, policies/processes for optimum, water consumption/ water conservation, circular economy/ recycle/reuse program, management of solid/liquid waste, and GHG emission. On the Governance front, the tool will assess compliance on grievance redressal/whistleblowing, code of conduct, anti-bribery, frauds/malpractice incident, and sub-contractors’ due diligence.
Leveraging Bizongo’s digital vendor management platform, the scorecard will help MSMEs on the platform validate their credibility in following mandatory compliances, especially when applying for Zero Defect Zero Effect (ZED) certification. It will also simplify availing ZED benefits, such as subsidy on cost of tech adoption, reimbursement on acquisition and installation of Plant & Machinery/ Testing equipment, and concessions in Pricing/processing charges by banks, among others.
The MSME sector in India is characterized as resource intensive with 19.4 million MSMEs in the manufacturing industry consuming 25% of the total energy in the industrial sector and generating 110 million tonnes of CO2 equivalent. This consumption is expected to further increase as India continues to boost manufacturing activity.
“India being the incumbent host of the G20 Presidency for 2023, the country would like to pioneer the cause of sustainable development goals during the current term and support climate change protection policies. This makes it even more imperative for the sector to invest in ESG. The Government of India has also been advising MSMEs to observe aggressive green practices and manufacture goods with ‘zero defects’ so that they have a ‘zero effect’ on the environment. In line with this Bizongo has taken a mandate to enable MSMEs to ensure that this transition happens, and this scorecard is a starting point that is available for every MSME to use and adopt,” Aniket added.
Most MSMEs either do not track their ESG compliance or still rely on manual processes to collect internal ESG data on water consumption, workforce demographics, and code of conduct, amongst others. This leads to unorganized storage of data resources across databases in different formats, which delays decision-making and ineffective tracking of ESG preparedness.
“The size of the enterprise, a profit-first mindset, informal nature of operations, and challenges in assessing and selecting sub-vendors/suppliers based on ESG performance are some of the overarching internal challenges preventing ESG adoption. Some of the external factors obstructing the adoption include lack of motivations through more regulatory compliances and absence of push from larger enterprises and customers,” he said
As ESG becomes the core conversation in corporate boardrooms and for the allocation of capital, it is compelling brands and enterprises to improve their sustainability performance. Also, the growing demand for a sustainable supply chain is putting pressure on SME vendors to increase resource productivity, reduce emissions, and improve their ESG score.
“Bizongo’s scorecard will help MSMEs meet the demands of global-level customers by driving more environmentally friendly and inclusive business operations and manufacturing products with the ethos of ESG. Simultaneously, it will also help large enterprises to monitor their ESG profile and expedite decision-making by assessing the compliance levels of suppliers, vendors, and other supply chain partners.” Aniket said. Further, the Securities and Exchange Board of India’s (SEBI) mandate for the top 1,000 listed entities by market capitalization to file business responsibility and sustainability reporting (BRSR) and disclosures from FY 2023 has triggered large corporations to think about ESG as a value preservation measure. Following the implementation of Bizongo’s scorecard, international and domestic enterprises with a large portfolio of third parties will be able to combat new risk levels and improve their sustainability performance as they onboard partners from Bizongo’s large base of ESG-compliant manufacturers and vendors.
Bizongo’s ESG scorecard comes on the heels of a preliminary study conducted by the vendor digitization platform to understand the current scale of adoption of ESG-compliant practices by MSMEs and their intent to implement them. Bizongo has been helping MSMEs scale their business by digitizing supply and procurement and offering tailored solutions that will enable the sector to achieve the Government of India’s vision of an Aatmanirbhar Bharat.
