No doubt, sustainability is increasingly becoming a vital business metric. It shouldn't come as a surprise when customers ask for information on your environmental, labor and ethical practices – sensitive data by nature. Any prompts for information can stir up some anxiety. How do you satisfy disclosure requests without compromising the company's confidentiality, and eroding trust and confidence?
Think about how we choose to disclose our own personal information and how we are often anxious about what happens to it. There are numerous circumstances when we share private, sensitive, information in return for a service or something of perceived value. For example, store loyalty cards allow you to save money on your purchases. In exchange, retailers track your shopping habits and likely sell this data to third parties – all in the name of improved customer experience. The information we share often seems to be contingent on our willingness to trade off risk for reward.
Disclosure: Yes, But Not "Too Much Information"
Companies face a similar problem when asked to provide sustainability data or ESG (environment, society and governance) metrics. They need to meet their customer’s needs to build their business case, yet they worry about the consequences of being transparent. Some might worry that too much disclosure will challenge their organization in the following ways:
One: Sustainability Data Is Sensitive Information and Requires Special Protection
Requests for information usually materialize as a sustainability questionnaire that delves into some sensitive topics. Questions x-ray your business practices, including actions on climate change, labor and human rights policies, and ethical principles, to name a few. The scope of an assessment may cover what you are buying as well – are sustainably managing your supply base? Companies, like yourself, can be reluctant to disclose such information, thinking it's not in their best interests. They might fear negative press or legal damage, or they want to protect the privacy of individuals.
Two: The More Disclosure Demands, the Greater the Exposure
Some companies have been battling "survey fatigue" for years. In extreme cases (as in the case of the Coca-Cola Company), companies are asked to fill out hundreds of sustainability surveys a year. The more surveys to respond to, the more exposure you risk – more potential loss or harm related to poor data security measures. All your data can be seen as an asset, there is a serious liability attached to it. It’s just too easy how sensitive information can fall into the wrong hands.
Three: The Need-To-Know Isn't There for Nothing
Questionnaires or surveys pressure companies into disclosing increasingly sensitive data. Not all data-requesting companies use the latest protection standards, technology, and policies. Some questionnaires are blank templates to be filled in and sent back via email (no doubt an absolute no-go for the information security officer). The more thorough assessments require supporting evidence, including corporate policies and records, intellectual property, or personal information. You should know that everything you share is secure and processed on a need-to-know basis.
EcoVadis Rating Brings Transparency Without Compromising Privacy Concerns
Recent MIT survey results (2022) show that companies most commonly share their sustainability data via in-house messaging: press releases, company websites, and sustainability and social responsibility reports (CSR). The least rarely used channels are third-party verification methods. Why? Partially because those come with the requirement of sharing sensitive information with external stakeholders, and companies cite confidentiality concerns. But what if the challenges described above aren't barriers to using a third-party attestation process? A trusted solution, backed up by technology and expertise, can help companies along and alleviate these fears.
Source: MIT’s State of Supply Chain Sustainability 2022
Data Sharing That Reduces Duplication of Effort
The EcoVadis assessment translates the data into ratings and scorecards. The process assures a comprehensive coverage of sustainability issues (material to the business and aligned with international standards), combined with expert analysis and validation of supporting evidence. One assessment gives a scorecard you can share with any customer you work with, even those outside the EcoVadis network (the Share Anywhere feature). That can be a huge time saver since a single assessment can meet the often varying requirements of multiple trading partners.
Information Security by Design
Strict data protection is a core tenet of the EcoVadis platform, now ISO 27001 and ISO 9001 certified. We’ve completed rigorous audits on our data processing and quality management systems. Everything you load on our platform remains secure and confidential. Visit our Trust Center to find out what we do to guarantee quality and data security.
Sharing on Your Terms
As part of your engagement with EcoVadis, you keep control of the data and underlying documents in the assessment survey. For one, requests from trading partners to share your scorecard are visible on your platform. You can manage with whom you share your scorecard by accepting, declining, or revoking viewing rights. Two, you can choose the level of information you want to share – the scorecard along with benchmark indicators, with or without the supporting documentation. You decide what to share and with whom you share it at a time. All this is easily manageable through our platform.
Communicating your sustainability performance seems necessary to drive legitimate business these days. Clients, investors, employees, regulators, and other stakeholders increasingly measure companies by environmental, societal and governance standards. When it comes to transparency, you need to balance out the fear or risk of disclosing information by leveraging secure and efficient processes. Because “not to inform” can have more negative consequences.
About the Author
Follow on Twitter Follow on Linkedin Visit Website More Content by EcoVadis EN
