What is EcoVadis?
Key terms:
EcoVadis certification support; EcoVadis rating; What is EcoVadis.
Highlights:
- EcoVadis offers a benchmark leading assessment of ESG (Environment, Social and Governance) topics, tailored to your industry,
- The largest global sustainability assessment of business
- EcoVadis’ ability to assess industries separate to one-another, creating a fair assessment process for all resulting in industry relevant KPI’s.
- The EcoVadis assessment is broken down into four key themes and three reporting areas.
- An EcoVadis Bronze, Silver, Gold or Platinum medal is awarded depending on your ranking against all other companies with EcoVadis Scores.
- EcoVadis is also being increasingly utilised as a supply chain tool for companies to assess the sustainability performance of their suppliers.
In the ever-evolving macrocosm of sustainability, it’s hard to know what your business is responsible for, which direction your corporate strategy should be leading, where to assess your corporate sustainability performance and how to monitor KPI’s for your Environmental and Social impact.
Fortunately, Services such as EcoVadis provide such a solution.
EcoVadis offers a benchmark leading assessment of ESG (Environment, Social and Governance) and Corporate Social Responsibility (CSR) topics, tailored to your industry, creating a fair assessment and most importantly allowing you to clearly understand your companies ESG performance.
This article sets out three key understandings:
o What is EcoVadis?
o The EcoVadis rating process/Methodology
o How and why are EcoVadis rating important?
What is EcoVadis?
EcoVadis (pronounced ‘Eco vardis’ and often misspelt as ‘ecovardis’ or ‘Eco vadis’) is the largest global sustainability assessment of business.
“As of the end of 2023, the EcoVadis database included over 130,000+ companies rated across 180+ countries and 220+ industries”(EcoVadis, n.d.).
EcoVadis is unique in that it measures a businesses’ overall sustainability performance based on the industry sector the reporting compony falls within, rather than a Holistic ‘One-size-fits-all’ approach, something many other sustainability assessment provides offer.
EcoVadis has earned this No.1 spot because of its ability to assess industries separate to one-another, creating a fair assessment process for all. This means that a Food & Beverage business will have different EcoVadis questionnaire to an Entertainment or Consultancy business.
In practical terms this means you are not asked to collect KPI’s on topics that are of no relevance to your business.
The EcoVadis rating process/Methodology
As the EcoVadis assessment is Industry specific, the first stage is selecting the right industry sector to your business. You will then receive an EcoVadis questionnaire to begin your assessment.
The Ecovadis assessment methodology entails, ‘General requirements’ which are given to all industries to disclose, and (up-to) ‘four Reporting Themes’. Some smaller companies or industries that do not have a procurement process do not have to report on a sector that is not relevant to them.
The Ecovadis assessment is broken down into four themes:
o Environment and carbon management;
o Labour & human rights;
o Ethics and anti-corruption;
o Sustainable procurement.
(Figure 1. EcoVadis dashboard image).
These four key themes are further broken down into three areas: Policies, Measures and Reporting capabilities.
(Figure 2. Ecovadis Policies, Measures and Reporting capabilities)
The scoring system and weighting of Policies, Measures and Reporting capabilities does get complicated. For more information, please see EcoVadis’ scoring principles. In summary, scores are awarded in Four levels based upon the amount of evidence and requirements achieved.
Scores between:
o 0-25: Insufficient, indicates that there is a significant need for improvement.
o 26-50: Moderate, reflect an average performance with room for growth.
o 51-75: Good, asses solid sustainability practices.
o 76-100: Advanced, scores represent the best performance.
EcoVadis will use the scores for each of the four themes (Figure 1) and the general requirements to award an overall EcoVadis scorecard. The maximum EcoVadis score is 100. A Bronze, Silver, Gold or Platinum medal is awarded depending on your ranking against all other companies with EcoVadis Scores.
Score thresholds were published by EcoVadis in Summer 2024. These will increase over time as companies continue to improve their scores.
(Table 1. EcoVadis Scores, published in Summer 2024)
How and why are EcoVadis rating important?
An EcoVadis rating serves as an independent and transparent evaluation of your business. A rating that gives your company’s sustainability claims validity and accountability. Ecovadis compliance is also being increasingly utilised as a supply chain tool for companies to assess the sustainability performance of their suppliers.
Therefore, the importance of a good score can help differentiate your business from your competitors, provide clients with reassurance, improve your brand reputation and be a noticeable mark of attraction when aiming to secure new investments.
References:
EcoVadis (n.d.) Who are EcoVadis customers? Available at: https://support.ecovadis.com/hc/en-us/articles/210459707-Who-are-EcoVadis-customers#:~:text=EcoVadis%20collaborates%20with%20a%20diverse,+%20countries%20and%20220+%20industries.(Accessed: 12 December 2024).
EcoVadis. (n.d.). CSR Rating Methodology & Scoring Principles. Retrieved December 20, 2024, from https://resources.ecovadis.com/ecovadis-solution-materials/csr-rating-methodology-scoring-principles