In a bid to enable 100,000 MSMEs to become ESG-compliant in the next 24 months, Bizongo, a vendor digitization platform, has launched the Bizongo environmental, social, and governance (ESG) scorecard. The scorecard is expected to help bolster ESG consciousness among Indian MSMEs and larger enterprises. Bizongo says it has 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. Bizongo’s ESG scorecard will enable MSMEs on its platform to 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 focus on environmental parameters such as the environmental management system (or ISO 14001), energy management process and policies, water consumption, and water conservation, the circular economy and recycle/reuse program, management of solid and liquid waste, and GHG emissions.
On the governance front, the tool will assess the compliance of grievance redressal and whistleblowing, code of conduct, anti-bribery, frauds and malpractices, and due diligence by sub-contractors.
Leveraging Bizongo’s digital vendor management platform, the scorecard will help MSMEs on the platform validate their credibility in following mandatory compliance, especially when applying for zero defect, zero effect (ZED) certification. It will simplify the process of availing of ZED benefits, such as subsidy on the cost of tech adoption, reimbursement on acquisition and installation of plant and machinery and testing equipment, and concessions in pricing, and processing charges by banks, among others.
The MSME sector in India is resource-intensive with 19.4 million units 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 increase as India continues to boost manufacturing activity.
“India being the incumbent host of the G20 presidency for 2023 would like to pioneer the cause of sustainable development goals and support climate change protection policies. This makes it even more imperative for the sector to invest in ESG. The government has 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 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, among others. This leads to unorganized storage of data resources across databases in different formats, which delays decision-making and ineffective tracking of ESG preparedness.
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 Aatmanirbhar Bharat vision, the company said.