Our Chief Rating Officer shares some performance trends ahead of the annual Business Sustainability Index report.
2024 will be a year of transparency as sustainability takes the spotlight in non-financial performance reporting.
Companies and institutions across the globe are already under regulatory scrutiny intent on improving transparency in a wide range of value chain, financial, and other commercial processes. On top of this, pressure from B-to-B customers (e.g.procurement managers to their suppliers) consumers, insurers and investors further forces clarity on how well companies are managing their ethical, social and environmental practices and impacts.
So, how well are companies performing in these areas? We share some insights derived from our 2023 Index dataset of assessments of companies with 25 or more employees.
EcoVadis Index: A Growing Sample Size
Our data shows continued growth in the number of companies using the EcoVadis collaborative platform to monitor performance and drive transparency and impact at a scale. Over 1,200 companies globally now use our solutions to manage sustainability in their supply chains, for a total spend of $4 trillion. We’ve assessed more than 130,000 companies across 180 countries, representing 220 different industry sectors.
In 2023, we crossed an important geographic milestone: For the first time, we published the most Scorecards - almost 4,700 - (of companies greater than 25 employees) in the United States. Right behind are France, China and Germany, the latter ramping up likely due to the effect of the LkSG.
Open for Benchmarking and Sharing
We keep hearing that benchmarking is one of the most useful capabilities of our platform. Having a solid guideline for measuring how your business is performing relative to peers and the broader industry has become most useful in securing internal buy-in. You can compare your scorecard results against averages built on thousands of others on the platform or even choose to share your results individually with specific groups.
Our publicly accessible Index Online ensures a fast and reliable way to generate relevant industry benchmarks. The tool includes additional data views for a closer look at geographic areas or company sizes. (The dataset includes ratings for companies larger than 25 employees).
Analysis of Global Trends in Sustainability Management
The EcoVadis rating methodology evaluates the quality of a company’s sustainability management system across three fundamental pillars: policies, actions and results. A company’s line of activity, size and location shape the questionnaire received, drawing from a total of 21 criteria grouped into four assessment themes (Environment, Labor & Human Rights, Ethics and Sustainable Procurement). Results are consolidated into a 0-100 score for the overall and theme performance.
Here are some performance highlights derived from last year’s assessment data:
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The overall average score was 51.6 points, after a solid gain since 2022 when the 50-point mark was first passed. Companies continue to perform better on Labor & Human Rights (54.6) and Environment (53.2).
>Index Online: Overall Scoring by Region (2019-2023)
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Companies worldwide have increased the overall average by 1.3 points since 2022, marginally topping the 2021/2022 progression (+1.2 points). The 2020/2021 gain remains the highest on record (+1.7 points).
>2023 Average Theme Scoring (SMEs vs. Large Companies)
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The average Environment score has risen by 2.1 points since 2022 – the highest yearly gain across all assessment themes. All regions except the Americas have registered the highest increase on this theme; Northern America, Latin America and the Caribbean saw the highest increase on Labor & Human Rights.
>Average Environment Scoring by Region (2019-2023)
These are but a few insights you will read about in the eighth edition of the EcoVadis Business Sustainability Index, coming soon. You can expect a detailed performance analysis covering the 2019-2023 data set, broken down by geography, industry and company size. We go beyond showing 0- to 100-point averages by showing distribution across the EcoVadis maturity scale, offering a more precise representation of a region’s or sector’s performance characteristics.
The following plots show the performance distribution of companies in different regions, a clear example that the typical European company would likely score “Good” or better (45+).
https://ecovadis.scan-datamining.com/embed/dataviz/140
In the meantime, we invite you to freely browse the 2019-2023 compiled data, or consult our Index and Impact resources. We’ve recently released the fourth edition of our Network Impact Report which draws on 47,000 sustainability performance scorecards published in 2023 to showcase tangible actions taken by companies across diverse sectors, from carbon reductions to DEI initiatives.
Sylvain Guyoton @sguyoton
Chief Rating Officer
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