Our latest Index report, which explores sustainability trends in global supply chains, found that companies around the world are stepping up to respond to today’s most pressing environmental and social challenges. Analyzing data from more than 83,000 ratings conducted by EcoVadis from 2017 to 2021, the Index shows that companies – across all regions, sectors and size categories – are improving their performance on our core sustainability themes. But not all are progressing at the same rate. Companies that have consistently engaged in EcoVadis Ratings and leveraged the insights to improve their sustainability practices are much more likely to be leading the pack. Here’s what the Index reveals about the top performers in our network.
The Top 10% of the EcoVadis Network
Despite the widespread progress being made, companies with an “Advanced” level of sustainability management are exceptionally rare. Only 10% of all companies in the EcoVadis network achieved the 65+ overall score needed to make this category in 2021. Of the remaining companies, more than half had a “Good” level of sustainability performance, a third fell into the “Partial” category and 3% performed at an “Insufficient” level. The “Outstanding” category, the peak of the EcoVadis performance scale, was attained by just 11 of the tens of thousands of companies assessed in 2021.
Reaching the Advanced scoring threshold indicates that a company has a comprehensive sustainability management system in place. It must have highly structured and proactive policies across a broad spectrum of sustainability challenges – from carbon reduction to preventing modern slavery – and be taking decisive and well-documented steps to address any issues identified. Transparency and reporting are key differentiators between companies in this upper echelon and those in the Good category (45-64) below. Advanced companies are able to provide clear evidence for every action they are taking – within their own operations and throughout their supply chain – and have robust mechanisms in place to measure progress and report on it.
Becoming a Leader Requires Engagement and Commitment
Building a world-class sustainability management system takes time and a commitment to continuous improvement. This is illustrated by the fact that over 65% of companies with an Advanced (score of 65+) or Outstanding (85+) rating have been undergoing assessments since 2018 or earlier. Only 16% of high performers underwent their first assessment in 2021.
The data shows just how impactful the cycle of baselining, capacity building and reporting can be for sustainability performance. In 2021, just 3% of companies assessed for the first time performed at an Advanced level. This jumped to 18% among companies with two or more assessments – a testament to the value of the insights offered by the ratings process, the importance of network collaboration and the effectiveness of EcoVadis’ suite of solutions and tools. A small group of companies that have been committed over the long term is seeing even better results: A remarkable 58% of those with five assessments under their belt are at an Advanced level or better. On average, companies don’t crest the 65-point mark until their fifth assessment (65.5).
Performance of Leaders Across Themes, Regions and Industries
Overall scoring trends don’t paint the whole picture. The EcoVadis network is incredibly broad and diverse, with over 100,000 rated companies spanning 175 countries and 200 industries. Performance varies significantly across regions, industries, company sizes and the four EcoVadis assessment themes: Environment, Labor & Human Rights, Ethics and Sustainable Procurement. This also holds true for Advanced companies; however, the data reveals which companies are more likely to be leaders.
More companies are excelling on the Environment theme than on any other, with 17% scoring above 65 in 2021. This is largely due to the strides made by European companies on environmental issues – over 25% are now considered “Advanced” on this theme. Finland leads Europe with a remarkable 44% of its companies scoring above 65 and 6% cresting the 85-point mark. Both the Labor & Human Rights and Ethics themes have a solid share of high performers at 14 and 12% respectively. However, with just 4% of companies achieving a score of 65+ on Sustainable Procurement, it’s clear that many leaders still have a long way to go before they can consider themselves truly “sustainable”.
Europe is still home to the vast majority of leaders in the EcoVadis network. While 17% of European companies achieved Advanced performance in 2021, only 4% of companies in Northern America (the US and Canada), 3% in Latin America & the Caribbean, 3% in Asia-Pacific and 2% in Africa & the Middle East can say the same. Europe has seen a doubling of companies in this category since 2017 – Northern America gained just one percentage point over this period.
Visit our Index Online to customize this chart and explore scoring by country and theme.
The Construction industry, which has the second-highest overall average at 51.5, leads the way in terms of the number of high performers (~16%).
Compare regional and country-level scoring across nine industries at our Index Online.
It is narrowly trailed by Finance, Legal & Consulting, the top performer in terms of average. Of the remaining seven industry categories examined in the Index, only two have less than 10% of their companies at an Advanced level: ICT and Transport at 7% each.
Although large companies trail SMEs in terms of overall average (47.3 in 2021 vs. 49.6), they are more likely to be among the network leaders. Roughly 14% of large companies are scoring above 65 compared to 10% of small companies and 9.4% of medium-sized companies. Large companies are also disproportionately represented among the leaders across all themes: Though they represented just 19% of all companies assessed in 2021, they accounted for 41% of leaders on the Sustainable Procurement theme.
The Next Performance Frontier
Tremendous progress has been made over the past five years across the EcoVadis network. The share of companies scoring below the 45-point threshold indicating “Good” performance dropped from 50% in 2017 to 35% in 2021. Many companies have made just as much net progress as those in the Advanced category but are just at an earlier stage of their sustainability journey. However, leading companies are showing what is required to drive the sustainable transition. The next performance frontier is the Outstanding category, which indicates that a company has a truly holistic, comprehensive and innovative approach to sustainability management. While there are just a handful of exceptional companies in the EcoVadis network that can currently claim this – we expect this number to grow substantially in coming years as more companies make a long-term commitment to the ongoing process of assessment and improvement.
A Call to Action for All Companies
For companies who have reached advanced performance, you are poised to make even more impact - not just within your operations, but across the entire network. Here are some next steps on how:
- Fill in your Metrics module - with tracking for more than 20 datapoints available - from Carbon emissions to DEI, to workplace safety stats - this is the hub for you to record your impacts so you can track it over time, with optional share to your customers so they can see your progress!
- Engage your employees by publishing your scorecard internally, and featuring your performance level in recruitment and HR activities.
- Engage your customers - use the “Share my scorecard” to new or prospective customers - you’ll not only share your current performance but also - and perhaps more importantly - your unique improvement trajectory.
- Showcase your best initiatives in the “Sustainability Initiatives” feature within the platform.
- Pay it forward: Share your experience and best practices.
- Have a great improvement story? …one that’s, well-documented with data to back it up (e.g. year over year reductions in carbon emissions or workplace accidents, improvements in DEI such as women in management roles, etc.), propose a case study or testimony video for our EcoVadis Academy. If so, contact us here.
What does it all mean if you’re not at “Advanced” performance yet?
The path to Advanced performance is itself filled with success stories: The share of companies scoring below the 45-point threshold indicating “Good” performance dropped from 50% in 2017 to 35% in 2021: This means companies are improving, and that’s the most important thing! Many companies have made just as much net progress as those in the Advanced category but are just at an earlier stage of their sustainability journey. You can find best practice examples and informative and inspirational videos from your peers in the network in the EcoVadis Academy, as well as our Rated Company Resources.
We hope you’ll find inspiration here to continue the journey.
And if you’re not yet part of the EcoVadis network, Get started on your journey here!
These are just a few takeaways from this year’s Index – read the full report for more insights by theme, region and industry.
About the AuthorFollow on Twitter Follow on Linkedin Visit Website More Content by EcoVadis