Sustainability is a key performance metric for modern businesses, both in terms of their own footprint and the rest of the supply chain. EcoVadis provides enterprise-class solutions designed to help organisations better understand and monitor supply chain sustainability.
This is what you need to know.
What is EcoVadis?
Provided as a cloud-based SaaS platform, EcoVadis is essentially a massive database containing holistic sustainability ratings of companies. The system has ratings for 90,000 companies in 175 countries and 200 industries.
Each listed company is assigned an easy to read scorecard with performance ratings for factors including:
- Labor & Human Rights
- Sustainable Procurement
Each factor is assigned a value of zero to one hundred, with bronze, silver, platinum and gold medals awarded to the highest performing organizations.
The database is typically used by purchasing managers to assess the sustainability performance of potential providers and partners. In this way, EcoVadis provides a simple way to perform due diligence and ensure that purchases are made in line with the corporate CSR strategy.
How popular is EcoVadis?
According to 2022 figures released by EcoVadis, more than 750 multinational companies already use their system ‘to manage risks, reduce costs and drive innovation and new revenue’. They estimate that in excess of 47,000 procurement and sustainability professionals rely on the system to assess and monitor the CSR performance of their global supplier base and business partners.
EcoVadis also list dozens of certified partners who provide technology integration and supplied training services to customers across the world.
How does EcoVadis work?
The EcoVadis scorecard serves two purposes. First, it provides a benchmark for organizations to measure their sustainability performance against their competitors. This benchmark can then be used to highlight areas requiring improvement, ideal for targeted allocation of additional resources and funding.
Second, the EcoVadis scorecard allows organizations to pinpoint other potential trading partners who share their sustainability goals. These insights can be used to make more sustainable procurement decisions and to incentivize potential partners to improve and align their own practices to build a more sustainable supply chain.
Any business can register with EcoVadis – they submit an extended questionnaire along with documentary proof of their organization and sustainability efforts. The EcoVadis platform reviews each submission before an analyst manually reassesses the evidence and questionnaire responses. After an extended review period, the business is awarded a sustainability rating according to internationally recognized standards.
The questionnaire has up to 200 questions (smaller companies answer fewer questions) and is customized to industry, organization size and country and is updated annually to reflect changes in local laws relating to sustainability.
What are the top 5 benefits of EcoVadis?
Ultimately, EcoVadis is intended to help businesses achieve their own sustainability targets by providing actionable insights into current performance. The top five benefits of the EcoVadis service are:
- Industry standard sustainability ratings among large companies
- Actionable benchmarks
- Trackable progress
- Public benchmarking
- Sustainable supply chain building
1. Accurate, reliable sustainability ratings
The EcoVadis scorecard uses international standards to generate a sustainability rating. Any company completing the EcoVadis enrolment questionnaire can be assured that the rating provided is calculated accurately using the data they supply, according to internationally recognized standards. Importantly, all data submitted to EcoVadis is manually verified by sustainability analysts to prevent the system being manipulated.
2. Actionable benchmarks
The EcoVadis scorecard provides ratings (0-100) across four themes, including sustainability and carbon footprint. The scorecard clearly identifies current strengths and areas that require improvement, offering actionable insights for increasing scores – and sustainability – in future.
The EcoVadis rating provides a basis for the PDCA (plan, do, check, act) process. Continuous improvement programs require quantitative metrics to understand – and to plan and execute the next potential enhancement.
3. Trackable progress
Using recommendations detailed on their scorecard, organizations can take steps to improve sustainability. And by resubmitting the EcoVadis questionnaire, they can accurately measure the positive effects of their improvement programs. Quantitative metrics provide important proof for CSR KPIs too.
4. Public benchmarking
Using EcoVadis, businesses can publicly demonstrate their commitment to improving sustainability. This is particularly useful for companies who are awarded medals for achieving the highest ratings, allowing them to showcase their achievements to potential partners and customers. Unlike competing products (like ServiceNow Integrated ESG or Aguaro) which are focused on the impact of IT on operations, the EcoVadis scorecard provides a rating for business operations as a whole.
The EcoVadis scorecard allows any organization to understand their current sustainability position, and helps potential clients better identify who they want to do business with. As ESG becomes an increasingly important factor for making investment decisions, many investors are demanding EcoVadis scores before acquiring shares or assets.
Devoteam currently has an EcoVadis rating of 70/100, while the average for similar companies is 50.
5. Sustainable supply chain building
EcoVadis makes it very easy for organizations to identify suppliers who share their ESG values and to start doing business with them. By partnering with high-scoring providers, organizations can quickly improve the sustainability of their entire supply chain, helping to further reduce the carbon footprint of their end-to-end operations for instance. And because the EcoVadis scorecards are standardized, businesses can simplify their own purchasing and procurement processes.
Why would an organization use EcoVadis?
Ultimately, EcoVadis provides sustainability insights that cross business units and functions. This allows teams from across an organization to set common goals and to work together towards achieving them.
Improving sustainability can be a massive undertaking. But with EcoVadis, teams can stay focused on tasks and measure progress against their own benchmark and those of their competitors. This proves to customers, partners and investors that they are serious about their ESG obligations.
Currently the average EcoVadis score is just 47/100, indicating that most organizations still have significant work to do if they want to become truly sustainable. For this reason, EcoVadis has partnered with Nexio Projects to provide officially-approved assistance to their clientbase.
Thanks to its functionality, flexibility and ease of use, EcoVadis has been adopted by thousands of organizations across the world. Following up on this success, they have recently released CyberVadis, a platform that provides standardized cybersecurity benchmarking and reporting.
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This article is a part of a greater series centered around the technologies and themes found within the second edition of the TechRadar by Devoteam.