EcoVadis: analysing supply chain sustainability

EcoVadis is the world’s most trusted provider of business sustainability ratings. 

Its 2020 report includes insights from global supply chain ratings with analysis on the sustainability scores of over 40,000 companies, as assessed by EcoVadis from 2015 to 2019.

This year’s Index includes a special deep dive topic on carbon emissions reporting as well as two sub-reports - one examining the health risk and preparedness of supply chains before COVID-19 (based on data from January 2019 to April 2020) and another on the Manufacturers of Chemicals and Chemical Products Industry (based on data from 2015 to 2019).

The report showed:

Supply chains were extremely vulnerable leading up to the COVID-19 crisis.

Assessments of 35,000 supplier ratings revealed that for every industry, over a quarter of suppliers have no measures in place to protect employee health and safety and proper working conditions, or are monitoring these and other key due diligence indicators of their own suppliers.

North American companies lead in reporting on CO2 emissions, but Europe leads in implementing action.

18% of businesses in North America participate in direct carbon reporting compared to 15% of organisations in Europe and AMEA. However, year-over-year Europe continues to outperform other regions on sustainability, scoring particularly well in the Environment theme. From a company size standpoint, small and medium-sized enterprises significantly underperform large ones in emissions reporting, highlighting the need for engagement strategies that develop management system maturity and guide improvements. 

Sustainable Procurement continues to lag.

With the exception of sustainable procurement, all theme scores have increased at least 9% since 2015. While companies are addressing social and labour impacts within their own operations, they are neglecting the risks that exist among their suppliers - representing a missed opportunity to drive value and create resilience in the next tier of the supply chain.

Chemical suppliers have greatly improved their sustainability practices.

While this trend is especially true among small and medium-sized companies, organisations of all sizes in this industry have shown consistent positive progress. Sector initiatives, such as Together for Sustainability, have offered a positive go-forward example for other sectors.

“The recent pandemic put a magnifying glass on supply chain risks and vulnerabilities,” said Pierre-Francois Thaler, co-CEO of EcoVadis. “As organisations look to rebuild operations, they must ensure strong sustainability practices remain front and centre, especially when it comes to supplier selection and relationship management. You are only as strong as your most vulnerable supplier – and without a holistic sustainability management system, organisations will continue to struggle to build resilience to supply chain disruptions and fail to meaningfully contribute to global sustainability outcomes.”