Microsoft and private markets ESG-focused data solutions provider Novata announced the launch of a new collaboration aimed at scaling sustainability data solutions for small and medium enterprises (SMEs), including plans to co-develop AI-powered tools and to provide smaller companies – including Microsoft suppliers – with climate reporting tools.

New York-based Novata is a public benefit corporation founded in 2021 by S&P Global, the Ford Foundation, asset management firm Hamilton Lane, and social change-focused investment firm Omidyar Network to provide private markets investors with a solution for ESG measurement, data collection, benchmarking and reporting. To date, Novata said that its platform is used by hundreds of GPs in private equity, growth equity, private credit, and venture capital, and by more than 10,000 companies.

Microsoft, through its Climate Innovation Fund (CIF) invested in Novata in 2023, as part of a $30 million funding round.

Alex Friedman, CEO and Co-Founder of Novata, said:

“We are excited to deepen our relationship with Microsoft, a company that has not only revolutionized productivity but has also been a leader in addressing the climate crisis and leveraging AI for good. This collaboration expands our global reach and strengthens our commitment to providing trusted technology that simplifies sustainability data management, helping companies unlock growth opportunities and enhance their resilience in a rapidly changing world.”

As part of the new collaboration, Microsoft and Novata announced that they will co-develop a range of AI-powered tools to simplify sustainability data collection and reporting, and that Novata will leverage tools including Microsoft Azure AI Foundry and Microsoft Fabric to unlock new capabilities in its sustainability solutions, data management and reporting process for businesses.

The companies also said that Microsoft will become a key sales partner for Novata across its SME channel to help businesses access Novata’s platform and solutions. Additionally, Novata will support Microsoft in its supply chain reporting, by providing Microsoft suppliers with tools to track, manage, and report sustainability metrics and to meet their climate reporting obligations.

Jeremy Pitman, Director of Partner Development, Digital Natives and ISVs – Tech for Social Impact at Microsoft, said:

“We believe that addressing climate change is both a responsibility and an important business opportunity. Our collaboration with Novata will enable a key segment of our clients to seamlessly and affordably integrate cutting-edge sustainability technology into their operations, empowering them to reduce their carbon footprints and meet their emissions goals.”