The View at the Top: Sustainability Performance That Sets Companies in the Nordics Apart

From sweeping commitments to tangible progress, companies in the Nordics lead in sustainability management. This group of Northern European countries has dominated our performance rankings, and Norway has outflanked all.

This blog builds on insights from our latest Index report, which analyzed more than 100,000 sustainability ratings from 2018 to 2022.

With their long-term focus, a leading clean-energy system, and environmentally and socially conscious consumers, Nordic countries are uniquely positioned to move fast and establish themselves as global leaders in sustainability. Much of what is needed to scale is already there, ready to be put to work.

So how do the local companies build on this position of strength to drive positive change? We’re looking at over 100,000 EcoVadis scorecards from 2018 to 2022 to see how more than 1,600 Nordic companies on the list compare to the global and European average in terms of moving along the performance curve.

Ahead of the Game, Norway Moving to the Top

Companies in the Nordics (Finland, Norway and Sweden) account for 3% of assessments in 2022 and approximately a quarter of them have been rated “Advanced.” 65% scored within the “Good” threshold of the EcoVadis 0-100 performance scale. Of the remaining companies, all performed at the “Partial” level leaving the “Insufficient” category empty.

In the last year, the typical company from those countries scored 57.4 – 2.4 and 7.1 points higher than European and global averages, respectively. Companies there move quickly relative to peers from other countries. Even if the rest of Europe is holding its course, the Nordics are stepping up, having made impressive gains during the 2018-2022 timeframe. Norway, falling below Europe’s average at one point, massively improved against the 2018 baseline (+9.4) and is now listed as the top-performing country (59.4).

Ranking second globally in 2022 with an overall average of 59.2, Finland lost ground over the past year (-0.5), despite decent progress since 2018 (+5.0). The second runner-up, Sweden (57.7), is now closely followed by France (57.6).

Overall score evolution (2018-2022)

Large companies (1,000+ employees) in Finland and Sweden saw their average drop marginally in 2022 (-0.6 and -0.2), unlike their peers in Norway (+10.0). Still, this group of companies in all three countries outperforms small (25-99 employees) and medium-sized enterprises (100-999 employees) by some margin. That’s an exception to the global trend where SMEs typically score higher than their larger counterparts.

The Nordics: Average score by company size (2018-2022)

Environment Remains a Bright Spot

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, Nordic companies are most mature on Environment, having improved to 60.1 in 2022. Large companies scored particularly well on this theme in the past year (67.2), averaging above the 65-point threshold that indicates Advanced performance.

Environment has long been a bright spot for Nordic companies, though there are recent signs of regression – for all but Norway. Since 2021, Sweden’s progress on this theme has stalled and the average for companies in Finland dropped by 0.9 points. Still, the three countries are the only ones ranking above the 60-point mark on this theme. In 2022, Finland placed first globally with an average of 62.4 on this theme, followed by Norway (61.9) and Sweden (60.6).

Labor & Human Rights Scoring Closing in on the 60-Point Mark

The Nordics performed well on Labor & Human Rights in 2022: Finland (61.2) topped the list, Norway (60.0) finished third behind France (60.7) and Sweden (59.3) just outside the top three. Nordic SMEs have made solid progress on this theme over the five years, with small companies adding 9.6 points to their average. Medium-sized companies gained 6.0 points over the same timeframe, and large companies added 4.2 to reach close to 59 points.

After years of consistent gains, companies in Finland marginally regressed on this theme over the past year (-0.2). This slowdown is being caused, in part, by a smaller share of Finnish companies rated as Advanced on this theme in 2022, compared to the year before (20% in 2022 and 26% in 2021). We’ve seen a significant increase in the number of assessments in this country since 2021 which would explain the decrease in the numbers in this performance category – of all Finnish companies assessed in 2022, 44% were evaluated for the first time. New entrants typically score lower than companies that have been continuously assessing their performance with EcoVadis.

The Nordics: Scoring by EcoVadis assessment theme (2018-2022)

Less Improved but Still Better on Ethics

In 2022, Norwegian companies were tackling ethics criteria better than those in any other country. Having improved by 8.4 points since 2018, Norway now ranks first on this theme (60.1), leaving the UK trailing by more than 3 points. Sweden and Finland fall further behind with over 54-point averages on the Ethics theme. As a result, in the last year, the typical company in the Nordics scored 54.2 points, making not much of a gap between this average and the average of companies in Europe (52.5).

As noted across all themes, Finnish companies regressed on Ethics as well. Their average score dropped by 2.4 points since 2021 as in 2022 fewer local companies scored above 65 points on this theme and more were evaluated as “Partial” on issues like corruption, anti-competitive practices and data management.

Sustainable Procurement at Midpoint

Companies in the Nordics are getting ahead of global peers by locking in trading partners through supplier programs so they are monitored and up to the company’s standards. With averages just below 50, Norway, Finland and Sweden now rank top three globally.

SMEs and large companies alike can drive positive change through collaboration with suppliers. An inclusive and supportive ecosystem where different players can participate is needed to maintain momentum. Supplier engagement has been a successful part of tackling the sustainability challenge for Nordic companies. Particularly important for large companies able to take on large-scale initiatives. This group in Northern Europe averaged 52.1 in 2022, 7.3 points higher than small companies there – though they tacked on only 0.1 points since 2021.

Specific advantages are up for grabs for companies – in the Nordics and beyond – that launch their supply-chain offensive. Nordic Capital, for instance, looking to drive sustainable growth across its portfolio, is digitilizing its procurement function, increasing resilience and transparency, and reducing costs. The company uses API for its sourcing tool built in partnership with EcoVadis, as well as our platform, to help investee companies manage risks in their supply chains and integrate sustainability considerations into their procurement processes.

Research suggests that companies that pursue sustainable procurement objectives enjoy greater commercial opportunities. As our recent joint study with Bain & Company outlined, maturity on this theme was found to be closely linked with financial outperformance: Front-runners can potentially have a profitability edge, with margins 3 percentage points above companies that don’t focus on their suppliers’ practices.

What is it About Norway?

In just one year, Norwegian companies moved up across our performance rankings, scoring the highest overall. What could have helped establish them as global leaders?

For one, the bulk of Norwegian companies build on lessons learned from past experiences and put the right management conditions in place. 58% of the country’s companies were reassessed between 2018 and 2022. The proportion of new joiners gradually decreased over the observed timeframe and in 2022, the ratio of reassessments to first-time assessments was two to one. As noted, those with multiple evaluations typically score higher which would translate to a higher scoring margin for local companies in the last year – for example, large Norwegian companies with two or more baselining cycles on average scored 65.0 points in 2022, compared to 55.0 scored by large companies assessed for the first time that year.

For two, Norwegian SMEs and large companies alike achieved big leaps in sustainability management since 2018, marking a more balanced improvement across the local network. They have taken a holistic approach to development, working on multiple fronts to make sustainability simply part of the way a company does business.

Norway: Average scoring by company size (2018-2022)

Norwegian scoring by EcoVadis assessment theme (2018-2022)

It’s worth noting here that, with roughly 130 assessments conducted in 2022, the representation of Norwegian companies in the EcoVadis network is growing slowly relative to Finland and Sweden: While the number of assessments of Swedish companies doubled since 2021, the data set from Norway grew by 20% since that time. The number of Finnish companies assessed jumped by 75% in a year. As the growth was fuelled by newcomers, Finland and Sweden lost some ground in 2022, making way for Norway to reach the top of the rankings.

Still, the Nordic newcomers made a strong showing in 2022. Finnish, Norwegian and Swedish companies assessed for the first time that year, on average scored 53.0 points – 7.8 points less than local veterans of the assessment process. Knowing that the global average for new joiners is considerably lower (45.7 in 2022), we can conclude by saying that the Nordics seem to have a favorable starting point. Given their ability to scale up – measured by existing comparable advantages – local companies are the ones to be watched when it comes to sustainability performance.

About the Author

EcoVadis is a purpose-driven company dedicated to embedding sustainability intelligence into every business decision worldwide. We offer a full range of solutions including IQ-Plus Risk & Compliance Management, EcoVadis Ratings, and Carbon Action Module for Scope 3 Decarbonization. Key features like 360/Live News Monitoring, Academy E-learning and Corrective action plans help companies comply with ESG regulations, reduce GHG emissions, and improve the sustainability performance of their business and value chain across 220 industries in 180 countries.

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