It has been a busy year in sustainability. From US President, Joe Biden ordering a wide-ranging review of federal supply chains in January, to the UK government hosting the critical COP26 summit in November, climate action and related issues concerning economic resilience and social justice, dominated the corporate and political agenda as never before. The launch of the European Commission’s "Fit for 55" climate action strategy generated enormous media attention in the early summer, while the publication of the sixth IPCC report provided a chastening reminder of the urgency of the threat presently confronting our planet.
Indeed, if there was any lingering doubt among laggardly sectors regarding the importance of social and environmental governance factors in shaping the immediate future of the global economy, the experience of the past 12 months cannot but have dispelled it. Controverting the commonplace expectation that the twin short-term imperatives of economic survival and business continuity might divert energy and resources away from corporate sustainability commitments in the context of COVID-19, the events of 2021 make clear that the experience of the pandemic has served only to consolidate sustainability considerations at the top of the corporate agenda. The past year has illustrated vividly how the most sustainable businesses are also the most resilient and are those the best placed to withstand sudden and unpredictable contractions in supply and demand.
Drawing on an unrivalled, comprehensive record of rated company data, EcoVadis has, throughout the past year, worked assiduously to monitor, measure, analyze and report on the latest in sustainability trends across diverse regions and industries. Foregrounding the five publications that generated most interest and engagement among our readers, this blog elucidates and contextualizes the foremost developments in corporate sustainability that obtained in 2021 and, consequently, provides an insight into themes we can expect to continue conditioning the sustainability landscape in the coming year.
As societies and economies tentatively reopened following the mass roll-out of COVID-19 vaccines in the first half of 2021, businesses across the globe sought to capitalize upon the profound disruption of the pandemic by adapting systems and processes in order to drive positive impact.
Hear the perspectives of six sustainable procurement leaders on how they are prioritizing and leveraging supply chain sustainability in rebuilding for resilience
In support of these efforts, EcoVadis published detailed guidance on how companies could go about harnessing the procurement function in service of such change and build back better following the pandemic. Drawing on a detailed analysis of current trends and insight from leading companies, the “Rethink and Rebuild” ebook provides five actioanble steps companies can take to enhance sustainability, build resilience and mitigate risk in the value chain.
Published biennially, the Sustainable Procurement Barometer synthesizes data and insights generated through in-depth interviews and surveys conducted with buyers and suppliers across diverse regions and industries. Developed in collaboration with the Value Chain Innovation
Initiative at the Stanford Graduate School of Business, the 2021 edition found that delivering on corporate sustainability goals has shifted to the top of the executive agenda, with 63% of executives now saying it’s very important, compared to only 25% two years ago.
Download the Sustainable Procurement Barometer 2021 and explore its findings in full
But while corporate commitments and public pressure have increased globally, delivering on goals – especially in the supply chain – remains a work in progress. For instance, only 48% of supplier respondents believe that the buying organizations they work with are truly engaged in sustainability and actively partner with them to foster sustainability practices in their commercial relationships.
This imperative that companies do more to engage suppliers in an effort to cascade positive impact through the value chain was reflected in the ratings data analysed in the production of the fifth annual Business Sustainability Risk and Performance Index. Drawing on the sustainability ratings of more than 46,000 companies assessed during the period 2016-2020, the 2021 Index revealed a complex and varied portrait of sustainability performance among rated companies.
The fact that, at 47.7, overall average scoring increased in 2020 (up from 46.6 in 2019) despite the unprecedented challenges posed by the COVID-19 pandemic is an unambiguous cause for optimism. Furthermore, in revealing that companies that have undergone three or more EcoVadis assessments achieve, on average, a substantially higher and more consistent rate of scoring than their less assessed counterparts, the Index data makes clear how a sustained engagement with the rating process creates a strong platform to improve performance continually.
Discover the full findings in the Business Sustainability Risk and Performance Index 2021
Nevertheless, the sustained decline in scoring observable under the fourth theme of the EcoVadis ratings methodology, Sustainable Procurement, is a grave cause for concern. Latest research indicates that the supply chain accounts for upwards of 80% of most companies’ adverse environmental impacts. Therefore, it is ultimately, only by incentivizing and working with suppliers to integrate sustainability considerations into the procurement function throughout the entirety of the upstream value chain that companies can maximize impact and meaningfully scale results.
Recognizing the imperative that businesses engage suppliers to cascade and amplify positive impact through the value chain, EcoVadis is constantly innovating new solutions to support customers in scaling their sustainable procurement efforts. In this regard, one of the most significant publications in 2021 pertained to the launch of the Carbon Action Module at the annual Sustain Conference.
The Carbon Action Module empowers companies with insights regarding their carbon management practices and performance to foster collaboration, and provides a set of tools to monitor and drive emissions reductions hand in hand with business partners along their decarbonization journey. In addition to providing Carbon Ratings and Scorecards to enhance transparency regarding GHG emissions in a purchasing company’s supply chain, the EcoVadis Carbon Action Module provides an easy-to-use Carbon Calculator that enables assessed organizations to accurately and consistently measure both their direct and indirect carbon footprint. Rated companies can, in turn, feed data regarding energy and carbon use into a comprehensive performance dashboard and track improvement over time, accounting for Scope 1, 2 and 3 emissions, as well as renewable energy use and total energy consumption.
As the EcoVadis blog discussed in advance of November’s critical COP26 summit, it is ultimately the activities of suppliers, far more than the structure of a purchasing company’s internal operations, that determines the carbon footprint of a given product or service.
EcoVadis rounded-out the year with a comparably significant product launch: that of the EcoVadis Academy, a unique eLearning platform intended to support EcoVadis customers in driving positive impact across global value chains.
As discussed in a recent, detailed blog article, the EcoVadis Academy draws on the company’s unique experience and data from 125,000 scorecards and is designed to create maximum value in multiple ways: it meets companies where they are, empowering them to take the next step on their sustainability journey; employs the latest technology to guide organizations through the most relevant content; and makes learning a compelling and collaborative experience with interactive navigation, videos, case studies and more to fully engage employees in driving sustainability. Users can start with introductory courses that provide a baseline of knowledge and then progress with more in-depth content to enable learners to address improvement areas with specific actions.
Get in touch or find out more about how EcoVadis can help your company to keep ahead of the regulators and proactively build sustainability and resilience throughout your organization and supply chain.
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