Time is running out for global businesses and their supply partners to accelerate climate action and build the low-carbon value chains needed to thrive in tomorrow’s economy. As regulatory frameworks tighten, investors demand greater transparency and consumers call for accountability, companies must work together more closely than ever. Our latest Carbon Action Report explores how companies in the EcoVadis network are responding to these growing expectations.
Our 2024 Carbon Action Report offers key insights into how more than 300 leading companies are using the EcoVadis Carbon Action Manager to accelerate climate action across their value chains. The paper looks at supplier adoption of carbon best practices, including target setting and reporting across all emission scopes, and how this is helping drive decarbonization progress in line with net-zero targets.
Drawing on scorecard data from the 40,000+ suppliers rated over the past year, the report delivers critical insights with a focus on the improvement of suppliers with multiple carbon ratings.
The Urgent Need For Scope 3 Action
With emissions continuing to rise and this year projected to be the hottest on record, the stakes for climate action have never been higher. However, despite the urgent need for action, progress remains slow for most companies. While one-third of the world’s 2,000 largest companies have set net-zero goals, only 18% are on track to meet their 2050 targets, and even fewer are ready for interim 2030 milestones.
This disconnect highlights a major barrier to decarbonization: Scope 3 emissions, which account for the bulk of most companies' carbon footprints and are notoriously hard to measure and mitigate. A lack of transparency persists, with only 13% of large companies (1,000+ employees) with multiple ratings collecting primary emissions data from their own suppliers. This drops to 6% for those rated for the first time. To address this transparency gap, companies must build their operational capabilities around carbon and enhance engagement with suppliers to help them do the same.
Building Supplier Carbon Maturity Through Collaboration
The Carbon Action Manager has proven to be a vital tool for helping suppliers improve their carbon management systems. Since its launch three years ago, over 81,000 suppliers across 180 countries have received a carbon scorecard, with 45,000 scorecards published over the past year alone. Of these companies, 22,000 have been rated multiple times, enabling us to track their progress over time.
The data shows that most suppliers enter the EcoVadis network with a low level of carbon maturity. On their first carbon rating, 35% of companies have "Insufficient" carbon management systems in place, and 42% are at a "Beginner" level on our maturity scale. These baselines indicate that the vast majority of companies across global value chains have yet to start their decarbonization journey or have only taken initial steps.
However, the data also demonstrates that progress is possible with each rating and improvement cycle. Nearly 44% of companies moved up at least one maturity level upon reassessment over the past year, and a rapidly growing number are building carbon management systems considered “Intermediate" and above.
Regional Carbon Maturity: Europe Leads, North America Is Catching Up
Carbon maturity varies significantly across regions. Europe leads the pack with 33% of its companies at the "Intermediate" or higher levels, followed by North America at 23% and Asia-Pacific at 22%. North American companies, however, have made impressive strides in specific areas of decarbonization. For instance, 57% of North American companies responded to the CDP climate questionnaire over the past year, compared to 30% in Asia-Pacific and 29% in Europe.
Regional disparities underscore the need for tailored approaches to supplier engagement. Companies with lower carbon maturity – especially in regions where progress has lagged – require more targeted support in the form of funding, tools and capability building to help them accelerate action and provide their partners with better emissions data.
Progress on Carbon Best Practices: Targets, Actions and Reporting
Setting emissions reduction targets and acting on them is a critical step in the decarbonization journey. Our report shows that 43% of large companies with multiple ratings now have Scope 1 and 2 targets, up from the network baseline of 26%. While Scope 3 target setting remains lower, adoption has doubled (from 5% to 11%) as reassessed companies increasingly engage their own suppliers and collect primary emissions data. Science-based target setting by large companies roughly doubled upon reassessment, from 8% to 15%.
Companies are also improving their carbon governance and operational practices. The report highlights that 53% of large companies have established dedicated climate action teams. Nearly 30% have time-bound decarbonization plans, enabling them to fulfill a key requirement of the EU’s upcoming Corporate Sustainability Due Diligence Directive.
Much work remains on Scope 3 action, with many suppliers still lacking a carbon management system that will enable them to collect emissions data from their own suppliers and help them drive reductions. However, a growing number of large companies in the network are overcoming this transparency gap, with the percentage of those collecting primary emissions data from their suppliers doubling from 6% to 13% upon reassessment.
It’s Time to Act
As we approach the midpoint of this critical decade for climate action, the need for swift and decisive action is undeniable. The data from across the EcoVadis network paints a clear picture: while progress is being made, much more is needed to keep pace with global net-zero targets. Companies that fail to engage their suppliers, collect accurate emissions data and drive action on science-based targets will find themselves increasingly vulnerable to climate-related risks and less competitive in a rapidly evolving market.
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