EcoVadis Methodology Provides Common Foundation for Companies to Drive Supply Chain Risk Management, Due Diligence and Positive Impact
PARIS & NEW YORK – June 15, 2023 – Companies across the globe, of all sizes and maturity, continue to improve their sustainability performance and build upon ongoing progress to implement positive sustainable practices across their value chains. This insight and more are found in the seventh edition of the Business Sustainability Index, published today by business sustainability ratings provider EcoVadis.
This year’s Index is based on the sustainability performance data derived from more than 62,000 companies assessed by EcoVadis between 2018 and 2022 across four themes: Environment, Labor & Human Rights, Ethics, and Sustainable Procurement. The EcoVadis network has seen a 134% increase in assessments since 2018 as the awareness surrounding supply chain due diligence grows and more organizations begin to assess and monitor their suppliers.
Over half (54%) of the companies were assessed multiple times between 2018 and 2022. These companies are more likely to fall into EcoVadis’ highest performance scoring categories of Advanced (65+) or Outstanding (85+), with 12% now achieving those scores. Overall, the global average score for companies is now at 50.3, crossing the halfway mark for the first time.
After years of declining or flat score trends, Sustainable Procurement topped all themes in yearly gains, increasing 1.7 points to 40.6 since 2021. This suggests that more companies are implementing practical strategies to mitigate risk and drive meaningful sustainable change throughout their value chains. Sustainable Procurement is crucial to building organizational resilience, mitigating risk and cascading a company’s sustainability values and goals throughout the upstream value chain.
"Companies who work with their value chain on a ratings and improvement cycle can comply with due diligence regulations and manage risks by helping their suppliers move above the risk zone, as well as enable solid performers to reach more advanced levels that contribute to sustainability, net-zero and other ESG goals,” said Sylvain Guyoton, Chief Rating Officer at EcoVadis. “It is particularly encouraging to see companies progress on the Sustainable Procurement theme as it is the most powerful lever available for driving positive environmental and social change.”
Other key Index findings include:
Rating Improvement Cycle Helps Companies Improve Beyond Risk Range: The proportion of reassessed companies scoring below 45 dropped by half between 2018 and 2022. This indicates that more companies are embarking on the continuous ratings and improvement cycle, which is helping them rise out of the risk range. Additionally, the proportion of higher performing reassessed companies at the Advanced level reached 28%, up from 10% in 2018.
Consistent Improvement Across Themes: Labor & Human Rights increased by 0.7 points since 2021 to 53.3, the highest theme score in the Index. The Environment theme increased 1.5 points since 2021 with large companies leading the way. The Ethics theme increased 1.0 points since 2021 to 47.9, with momentum slowing compared to the years before.
Small and Midsize Enterprises (SMEs) Forge Ahead: Much of the global average sustainability performance score improvement has been fueled by SMEs. Small companies improved the most, gaining 6.9 points between 2018-2022, followed by medium enterprises with a 5.6-point gain, and large companies improving by 3.3 points.
Industries Surpassing the Halfway Mark: Six out of nine industries crossed the 50-point threshold by 2022. Finance, Legal and Consulting increased 7.0 points since 2018 (highest overall average of 53.9) and leads with 19% of Advanced performers. Construction (52.0) and Heavy Manufacturing (51.9) follow, improving by 6.0 and 5.6 points respectively. Construction stood out as the only industry in 2022 with more than 1% of its companies reaching the Outstanding level.
To view this year’s full study, as well as create custom views of specific sectors, geographies, and themes, visit the EcoVadis Business Sustainability Index and Impact resource center.
EcoVadis is a purpose-driven company whose mission is to provide the world's most trusted business sustainability ratings. Businesses of all sizes rely on EcoVadis’ expert intelligence and evidence-based ratings to monitor and improve the sustainability performance of their business and trading partners. Its actionable scorecards, benchmarks, carbon action tools, and insights guide an improvement journey for environmental, social and ethical practices across 200 industry categories and 175 countries. Industry leaders such as Johnson & Johnson, L’Oréal, Unilever, LVMH, Bridgestone, BASF and JPMorgan are among the 100,000 businesses that collaborate with EcoVadis to drive resilience, sustainable growth and positive impact worldwide. Learn more on ecovadis.com, Twitter or LinkedIn.
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