Polish Companies Past the Performance Midpoint but Lagging Behind Leaders in Europe

August 24, 2023 EcoVadis ‏‏‎

The region is a crowded and competitive market for sustainability. Polish companies rank “Good” yet far behind top competitors, according to our ratings data.

The country has enshrined the principle of sustainable development in its constitution and broadly adopted the EU social and environmental policies. Still, at times, it’s a pocket of resistance determined to hold out on the real commitment: The bloc pledged to become carbon neutral by 2050, but Poland exempted itself from this, saying it will pursue the goal “at its own pace.”

The government-led conviction that economic growth should be prioritized over the protection of the environment or social conditions is still strong. Yet, more local companies are ESG-oriented and actively engage in environmental and social dialogue. And being transparent about these types of efforts made it to their list of priorities. However, much of that motivation is fueled by the current and upcoming regulatory pressure.

Bound by EU regulations, an increasing number of companies in Poland need to disclose non-financial information. By 2024, an estimated 3,600 companies will need to provide sustainability-related disclosures. More of small and medium-sized enterprises (SMEs) will follow in the coming years.

Some Polish companies already carry out such reporting though they don’t have the same obligation. Those that measurably improve on a range of sustainability topics demonstrate commitment to positive change that consumers and investors are increasingly expecting.

A steadily growing number of companies leverage our platform to measure and improve their readiness to meet this new breed of expectations. Between 2018 and 2022, we assessed 935 companies from the country to understand their progress and how they differentiate from European competitors. This blog taps into the data set used for our latest Index report which analyzed more than 100,000 EcoVadis sustainability ratings.

Impressive Gains but Behind the European Average

With an overall average of 51.3, Poland was the 17th top sustainability performer in our European assessment region in 2022. It’s narrowly ahead of the Czech Republic (51.2) and trailing Greece by 1.4 points. Norway, the top country, leads with an average of 59.4.

Top -20 European countries by overall average (countries with 100+ assessments)

In 2022, the typical European company scored 55.0 and improved by 1.2 points since 2021 and by 5.7 points since 2018. The typical Polish company would improve by the same amount in five years, with a slightly bigger score increase (1.6) in the last year alone. 

On a scale of 0 to 100, the average country score is firmly within the “Good” EcoVadis’ performance threshold (45-64). The majority – 59% – of Polish companies scored in this range in 2022. Of the remaining ones, 11% performed at an “Advanced” (65-84) level, and 29% were assessed as “Partial” (25-44). Performance distribution for Europe differs as the region amassed more companies that distinguish themselves as leaders and good performers (see performance distribution charts on the right).

*Due to rounding, chart totals can range from 99 to 101

Medium-sized enterprises (100-999 employees), which make up 60% of Polish companies in the network, are leading the way with an average of 52.6 average in 2022 – 2.7 points clear of small companies (25-99 employees). Their large counterparts (1,000+ employees) trail by another couple of points, averaging 48.1. These averages include both new joiners to the network as well as veterans to the assessment process. In 2022, SMEs assessed for the first time averaged 47.5 while large companies averaged 42.2. On the other hand, SMEs and large companies with multiple evaluations raised their average scores to 55.6 points and 50.8 points, respectively. This means that, regardless of the number of assessments, the difference in the performance of the two groups oscillates around 5 points. This also indicates that SMEs are entering the EcoVadis network with a higher level of sustainability maturity. They improve faster, too.

Poland’s average scoring by company size (2018-2022)

A company’s overall score is determined by its performance across four sustainability themes: Environment, Labor & Human Rights, Ethics, and Sustainable Procurement. Of these themes, Polish companies are most mature on Labor & Human Rights, having improved by an impressive 7.0 points since 2018. SMEs are responsible for virtually all the progress made on this theme over the five years – they improved by 7.5 while large companies increased their average by a modest 2.6 points.

The most notable year-on-year gain was achieved on the Sustainable Procurement scoring, with the theme average up by 2.7 points since 2021. By contrast, European companies improved by 1.7 points in the last year. This growth is being caused, in part, by an influx of SMEs with more maturity on this theme. Large Polish companies assessed for the first time in 2022 are scoring just over 27, an indication that they still have a lot of work left to integrate procurement best practices. This is 11 points lower than the first-time average for SMEs, though this performance gap narrows to 5 points among companies rated twice or more.

Polish scoring by EcoVadis assessment theme (2018-2022)

All size categories in Poland made some impressive gains on Ethics since 2018. Large companies improved by 5.2 points, medium by 5.8, and smaller counterparts tacked on 6.8. However, Polish companies continue to trail their high-performing European peers on the Ethics theme by a significant margin. With an average of 49.1 in 2022, they are now 11 points behind world-leading Norway.

More Polish companies need to improve their Environment scores to achieve the level of maturity exemplified by the Nordic countries. Finland ranks first on this theme with an average of 62.4 in 2022. Polish companies improved by 1.9 in the past year, to 52.1 in 2022. Their average puts them 19th among European countries with more than 100 assessments, behind Romania and the Czech Republic.

There’s Competition Already

In Poland, several industries made some good progress over the five years: Construction (+11.3), Finance, Legal & Consulting (+11.2), and Advanced Manufacturing (+11.0). Notably, Light Manufacturing which was performing on a high level has lost ground (-0.7). Although they face different challenges, in 2022, all industries passed the 45-point mark indicating Good performance.

Poland and Europe: Overall scores by industry (2022)

Market expectations and regulatory changes force Polish companies to take serious sustainability measures. They need to quickly adapt to the changes brought by growing environmental and social awareness, especially since ESG factors are increasingly influencing transactional and purchasing decisions in Poland. As attitudes toward products and services shift from “What does it cost?” to “How does it impact the world?” companies need to change with them by delivering higher-purpose elements such as “ethical,” “environmentally responsible” or “inclusive.” To differentiate, they will not only embed the sustainability criteria that are increasingly important to buyers – they will also follow a distinct path to make these standards part of their selling proposition.

Committing to benchmarking and improving sustainability helps companies signal to customers – in Poland, Europe, and beyond – that they are ready to meet their trading partners’ ESG and compliance goals. Unless you’ve already started, consider getting rated today.

About the Author

EcoVadis ‏‏‎

EcoVadis is the world’s most trusted provider of business sustainability ratings, intelligence and collaborative performance improvement tools for global supply chains. Backed by a powerful technology platform and a global team of domain experts, EcoVadis’ easy-to-use and actionable sustainability scorecards provide detailed insight into environmental, social and ethical risks across 200+ purchasing categories and 175+ countries.

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