The EcoVadis Supply Chain Assessment
EcoVadis is a supply chain assessment which helps companies to understand and quantify sustainability risks within their supply chain. Unlike individual questionnaires or very specific ones like CDP, EcoVadis offers a standardized approach which is able to compare the performance of companies with entirely different profiles on a rating scale from 1 (bad) to 100 (best performance). EcoVadis helps companies to manage their network both upstream and downstream, either by sharing their performance with their stakeholders or monitoring the performance of their own value chain. The participation at EcoVadis is awarded with a scorecard and a medal, that can easily be shared with multiple customers.
The EcoVadis questionnaire contains questions on Labor & Human Rights, Environment, Ethics and Sustainable Procurement. To target the questions as accurately as possible to the rated company, the questions are customized to the sector and the countries the company is operating in and the size of the company. The key point of the EcoVadis assessment is, that every question in the questionnaire has to be proven by a supporting document that is checked by an EcoVadis Analyst. Also, KPIs like energy consumption, GHG emissions, corruption incidents or percentage of women in the executive board need to be reported. The EcoVadis assessment therefore gives a good overview of the sustainability performance and is a proper tool to identify gaps in the documentation of ESG topics.
EcoVadis Business Sustainability Risk and Performance Index
A few weeks ago, EcoVadis has published the EcoVadis Business Sustainability Risk and Performance Index – an analysis of 83.000 sustainability ratings amongst 53.000 companies between 2017 and 2021. Those were analyzed by EcoVadis to identify trends and the general performance. The comprehensive index shows a detailed evaluation of the collected information broken down by regions, industries and subdivided into the individual sustainability topics. One meaningful outcome of the report can be highlighted at this point already: More companies than ever have engaged in the EcoVadis sustainability rating: EcoVadis has seen a 61% growth in the number of assessments from 2017 to 2021. Additionally, companies of all sizes around the world have improved their sustainability performance over the past five years.
Results
If we have a look at the results per region, the EcoVadis ratings from Europe rank at the top: Europe continues to significantly outperform other regions on overall scoring, with an average of 53.8 from 100 points. The global average reached 49.2 points, an increase of 5.1 points since 2017. Europe’s leadership is reflected not only by its average score but also its broad maturity level. More than 70% of its companies are at a good, advanced, or outstanding performance level and almost none have an insufficient sustainability management system. Especially on environment topics, European countries have an advanced performance level – in 2021, Europe remained the global leader on environmental performance.
Figure 1: Overall Scoring and Improvement by Region (2017-2021); (Source: business-sustainability-risk-and-performance-index-insights-from-global-supply-chain-ratings-sixth-edition.pdf)
Overall, the scoring has increased across all regions and, importantly, the share of companies with an insufficient performance level has strongly decreased since 2017. This indicates a reduction in the likelihood that buyers will encounter extreme sustainability risks in their global value chains.
Focusing on the individual theme categories, the environment topic in particular stands out: It becomes apparent that trends like ESG, sustainable investing and the growing number of companies setting science-based targets has put climate action back at the top of the agenda of companies.
In addition, the difference between first-time participants in the assessment and companies that have been participating in EcoVadis for several years was highlighted. The performance of companies assessed by EcoVadis for the first time lies below the performance of companies with multiannual ratings. Reassessments can help a company advance its sustainability journey – when expectations are clear, and companies actively work on the sustainability challenges an improvement is highly likely.
Focus on the German market
If we have a look at the German market, you can also see a huge increase in the sustainability performance compared to 2017. In 2017 the rated companies reached round about 47 points which equals a medium sustainable performance. As in 2021, the rating results increased up to 51 points in average.
Companies active in the “Manufacturing Heavy” sector perform best in the EcoVadis rating in Germany. These companies scored an average of 56.1 points in their EcoVadis assessment.
DFGE has been supporting various companies in their EcoVadis assessment as official partner since 2014. In 2022 we supported over 30 national and international companies in their EcoVadis assessments. Moreover, we are very proud to have been able to support two EcoVadis Platinum Medal companies (>75 points) this year.
If you need support with improving your EcoVadis assessment or want to participate in the rating for the first time, our experienced EcoVadis team is looking forward to supporting your company. Please contact us via or by phone on 08192-99733-20 for further information.
