EcoVadis Medals are Changing; As Sustainability Practices Across Global Supply Chains Improve, We’re Adapting our Processes.
EcoVadis is updating the benchmarks for our medals to ensure that stakeholders can continue to rely on this recognition as an indicator of outstanding sustainability performance. The medals eligibility criteria are becoming more selective. and we would like to share the reasons that have led to these updated standards.
Historical Context
Since EcoVadis’ founding in 2007, the main focus of the ratings and scorecards was not as an external communication tool, but rather as an indicator to guide collaborative improvement within business relationships: between companies and their customers, suppliers, licensees, distribution partners, service providers, investors, and others. This is consistent with our mission, which is to move beyond a binary pass/fail compliance approach and help all companies move forward on their sustainability journey, regardless of where they are starting out. However, our broad, absolute scoring scale left many companies wondering whether all their stakeholders appreciated the effort it can take to achieve even a below average score.
EcoVadis Rating Scoring Scale
In response, we made several changes. First we added benchmarks, allowing comparisons with peers using a percentile ranking by industry, country or company size. While this was a good start, the benchmarks were only available on the platform for members of the network, and they weren’t easy to understand for the average stakeholder. That led us to the introduction of medals in 2011, motivating companies to improve their performance and allowing them to publicly celebrate their success and share their achievements. EcoVadis medals recognize eligible companies that have completed our assessment process and demonstrated a relatively strong management system that addresses sustainability criteria, as outlined in our methodology.
The Evolving Sustainability Landscape
Fast forward to 2024, and the landscape is drastically different. Regulatory changes, pressure from stakeholders and other factors have led to companies across all industries making tremendous strides in improving their sustainability performance. Sustainability awareness and performance have been transformed across almost every industry compared to 2014. The share of Global 500 companies with a net zero GHG emissions target grew from less than 5% prior to 2015 to 66% in 2023; 18,000 companies are members of the UNGC; 23,000 companies report to CDP; 4264 with science-based targets and 2981 net-zero commitments through the Science Based Targets initiative.
The scores of companies we rate have risen accordingly: when we launched our medals, the engagement in sustainability was lower and the average score was around 40 out of 100. Five years after the launch, it increased to about 44 and the overall average just surpassed 50 in our last Impact Report (see graphic below). More importantly, companies are being reassessed many times, and those scores rise significantly faster.
Evolution of average score from 2017 to 2022
Along with improvement in scores, our network of rated companies continues to grow year-over-year - from about 5,300 when we launched the medals to over 128,000 as of early January 2024.
Evolution of scoring distribution and network growth from 2016 to 2022
See the EcoVadis Index for more information.
Adjusting to Rising Expectations
Our customers and their stakeholders are demanding more and hence we need to raise our thresholds and maintain the highest standards so our medals can continue to be aspirational for our rated customers.
Thus, in response to those higher expectations, during 2022 and 2023 we carried out a thorough review of our methodology for awarding medals and have updated the eligibility criteria. This will also ensure that we remain aligned with the changing regulatory landscape and the evolving role of sustainability in business.
New Medal Eligibility Criteria
Starting January 2024, the updated medal levels are:
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Platinum - Top 1% (unchanged)
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Gold - Top 5% (unchanged)
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Silver - Top 15% (compared to 25% previously)
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Bronze - Top 35% (compared to 50% previously)
Previously, we also had static score thresholds associated with each medal level and although they were updated annually to match the performance improvement in our network, they didn’t always align with the corresponding percentile thresholds towards the end of the year. To simplify and maintain accuracy, medals will be awarded on the basis of the percentile thresholds associated with each medal level. The percentile rank of a company is calculated at the time of scorecard publication and compares its performance to all companies rated by us in the previous 12 months.
Other eligibility criteria have also been updated such as a minimum score of 30 in each of our four themes -- Environment, Labor & Human Rights, Ethics, and Sustainable Procurement -- as well as rules for 360° Watch findings, which are reviewed periodically.
While we will continue to award top performers with medals, we are also pleased to introduce two new badges, Committed and Fast Mover to recognize companies that are making meaningful progress in their sustainability journey.
For more details about our updated medals and new badges, please visit this article.
The increased engagement in sustainability that we’ve seen since we began issuing ratings is undoubtedly great news for all of us who care about our planet and the people who live here. Although the higher thresholds make our medals harder to earn, these updates are designed to ensure that EcoVadis ratings remain a relevant, reliable measure of a company’s commitment to sustainability that our customers and their stakeholders can continue to trust.
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