EcoVadis is the world’s largest provider of corporate sustainability ratings, offering a comprehensive view of a company’s ESG performance. Founded in 2007, the company has rated over 100,000 companies in 175 countries. The EcoVadis assessment process evaluates companies across 21 sustainability indicators grouped into four key themes: Environment, Labor & Human Rights, Ethics, and Sustainable Procurement.
Ecovadis is the world’s largest sustainability ratings provider, with over 100,000 companies rated. EcoVadis ratings matter. They give companies a holistic view of their sustainability performance, enabling them to assess and share their current performance, and what they have to do to improve.
As the only rating solution for every aspect of Environmental, Social, and Governance (ESG) factors, EcoVadis is considered the gold standard for measuring a company’s overall sustainability performance. It is also being increasingly utilized as a tool for companies to assess the sustainability performance of their suppliers.
If you would like to learn more about the most popular sustainability rating service, are looking to report with EcoVadis, or if would like to improve your score, read on for our value tips.
What is EcoVadis
EcoVadis is a global provider of corporate sustainability ratings, intelligence, and tools. The company was founded in Paris in 2007 with a mission to:
Provide reliable, globally recognized sustainability ratings and insights, enabling all companies to reduce risk, drive improvement, and accelerate positive impact on our planet and society.EcoVadis Mission
Since its founding, it has grown to become the largest sustainability ratings provider, giving scores to over 100,000 companies in 175 countries. To become an EcoVadis-rated, companies have to go through the EcoVadis assessment process, after which they will receive an EcoVadis rating score, both of which are both explained below.
How the EcoVadis rating process works
To be assessed by EcoVadis, companies need to follow a simple four-step process:
- EcoVadis Registration: Signing up through the registration page starts the process. To begin with, companies will be expected to share information about their company size, name, industry, and geography. This will help EcoVadis create a customized questionnaire and price.
- EcoVadis Questionnaire: Once the registration has been received and processed, companies will be notified, and they can begin filling out their customized questionnaire. After completing the questionnaire, which should take no more than a few hours or a couple of days, supporting documents will be requested. Finally, a subscription plan will be chosen, and billing information will be given for payment. The customized company will have to share data across 21 sustainability indicators, which are grouped into four key themes:
- Environment: Evaluate a company’s environmental impact, including energy consumption, emissions, and waste management.
- Labor & Human Rights: Looks at labor and human rights practices, including health and safety, working conditions, and diversity.
- Ethics: Focuses on business ethics, such as corruption, bribery, and anti-competitive practices.
- Sustainable Procurement: Assesses how sustainably a company sources its goods and services.
- EcoVadis Expert Analysis: EcoVadis sustainability experts will now spend 6-8 weeks reviewing the answers of the questionnaire and supporting evidence, using a methodology based on international standards such as the Global Reporting Index (GRI), ISO 26000, and United Nations Global Compact
- EcoVadis Results: Companies are notified when their scorecard is available on the EcoVadis platform. If they were invited to complete the assessment by a customer, they will also be notified and sent a copy of the scorecard. Scorecards are valid for twelve months, after which companies need to reassess.
Companies can expect to receive their EcoVadis score results 6-8 weeks after submitting their questionnaire. They will receive a score for each theme, an overall score between 1 and 100, and a corresponding annually updated sustainability rating across four different medal categories: bronze, silver, gold, and platinum. For 2023, the Platinum rating is reserved for the top 1% (overall score between 78 and 100); Gold rating is for the top 5% (overall score between 70 and 77); Silver -rating is for the top 25% (overall score between 59 and 69); and Bronze is for the top 50% (overall score between 50 and 58).
Companies that receive a score lower than 50%, or 30%, in any of the Environment, Labor & Human Rights, or Ethics themes or below 25% in the Sustainable Procurement theme do not get a rating badge.
The rating score and medal are based on the publication date, not the questionnaire completion date. The trend for medals is that they get harder to achieve every year. In 2022, for example, Platinum had to have an overall score between 75 and 100, and Gold had to have an overall score between 67 and 74.
Why an EcoVadis rating is important
Having your company’s sustainability credentials verified by EcoVadis gives your company’s claims validity and ensures you are being transparent and accountable.
A good score is important as it can differentiate your business, improve your brand reputation, and be the deal breaker for hiring a new investment, securing investments, and attracting new customers. Research suggests that 91% of companies take sustainability ratings into consideration when making a purchasing decision.
An EcoVadis rating also allows you to benchmark and compare your performance against competitors and peers and gives you a corrective action plan to follow to improve your score.
EcoVadis ratings are also important for supply chain sustainability. Buyers can use EcoVadis to send their suppliers customized questionnaires to get a better understanding of the sustainability risks in their supply chains and improve procurement practices.
EcoVadis and Supply Chain Sustainability
The majority of companies’ sustainability impacts, such as carbon emissions, human rights issues, and waste, are tied up in their global supply chains. Suppliers can use EcoVadis to send their supply chain partners a customized questionnaire for all of their sustainability reporting.
Multiple studies show the widespread financial and brand image benefits of having a sustainable supply chain. One study from the World Economic Forum showed that sustainable supply chains can reduce supply chain costs by 9%-16%.
With vast experience in helping over 1,000 suppliers improve their sustainable procurement, EcoVadis can help both buyers and suppliers in the following ways:
- Buyers: It gives buyers a clear and timely way of accurately assessing the sustainability performance of their suppliers, helping them identify opportunities for more sustainable suppliers or drive improvements in existing ones.
- Suppliers: Suppliers can benchmark their performance against competitors and get actionable insights into improving their ESG performance to differentiate their brand and win more business.
EcoVadis vs. CDP
CDP and EcoVadis are by far the most common ways companies assess their sustainability performance and send requests to suppliers for sustainability information. However, they differ in some key ways, which include:
|Focus||Focuses on a wide spectrum of ESG issues||Focuses solely on climate change, water, and deforestation|
|Methodology||Gives customized questionnaires for self-reporting based on an organization’s industry, size, and location, across four sustainability themes: Environment, labor and human rights, ethics, and sustainable procurement.||Uses annually updated questionnaires for self-reporting of carbon emissions, water usage, and deforestation practices.|
|Reporting||Annual private reports, shared with other businesses||Annual public reports|
|Audience||Aimed at companies looking to make their supply chains more sustainable and share ratings business to business.||Geared towards stakeholders like investors, policymakers, and the general public.|
|Benefits||Gives a corrective action plan to improve your score, has wide scope of all sustainability factors, can help show ESG rating across supply chain partners.||Most recognizable globally, most used by large enterprises, limited focus on climate water and deforestation.|
How to choose between EcoVadis vs. CDP ratings
The main reason companies choose one ratings vendor over another are:
- Focus: If a company is more concerned with climate metrics, CDP might be a better fit. If broader ESG metrics are more relevant, EcoVadis might be more suitable.
- Stakeholder Engagement: CDP is better suited for organizations looking to disclose information publicly or attract investors. EcoVadis is geared towards B2B relationships and internal decision-making.
- Scope and Scale: Smaller companies or those more focused on supply chain issues may find EcoVadis more relevant. Larger corporations or those focused on broader stakeholder engagement might lean towards CDP.
- Customer Requirements: Some customers may have a preference or requirement for one over the other. Microsoft’s Supplier Code of Conduct, for example, requires companies to report their emissions data through the CDP.
- Resource Allocation: CDP can be more time-intensive and might require more internal resources for data collection.
Actionable tips to improve your EvoVadis sustainability rating
If your company received an EcoVadis medal below your goal or the dreaded no medal (score below 50%), you have 12 months to take measures to improve your rating. Follow these five simple steps to improve your score:
1. Conduct a Gap Analysis
Before making any changes, it’s essential to know where you currently stand. Evaluate your existing EcoVadis scorecard and its corrective action plan across the four main themes: Environment, labor and human rights, ethics, and sustainable procurement. If you are yet to get your EcoVadis rating, you can conduct a materiality assessment. Use this information to identify your weak areas.
2. Create an Action Plan
Develop a comprehensive action plan based on the results of your gap analysis or materiality assessment. Prioritize actions that will yield the most significant impact on your score, assign tasks to specific teams or individuals, and set achievable deadlines.
3. Use a Software Partner for Data Preparation
Utilize a specialized ESG software partner to collect, prepare, and manage your sustainability data. These platforms can automate the tracking of KPIs, streamline data collection, and even generate reports that you can directly submit for your EcoVadis evaluation. This will not only make the process more efficient but also ensure accuracy.
4. Compile Supporting Documentation
EcoVadis places a significant emphasis on proper documentation. Gather all the necessary documents that support your sustainability and CSR efforts, including policies, evidence of initiatives, and compliance records. There is a limit of 55 documents. Make these documents easily accessible for the EcoVadis evaluation.
5. Monitor & Measure Progress
Regularly assess your performance through analytics and internal audits to ensure that you are on track to meet your goals. Modify your action plan as needed based on these evaluations.
Good.Lab can help you improve your EcoVadis score
At Good.Lab, we understand what it takes to achieve a high EcoVadis rating, how to collect the necessary data, and how to use that to make data-driven strategies to improve your ESG performance. With our best-in-class ESG software and sustainability experts we can help you through the process.
Getting a good EcoVadis rating of Bronze, Silver, Gold, or Platinum could make or break your next deal. Reach out to our experts to help build your brand reputation and win more business.
EcoVadis Frequently Asked Questions
The EcoVadis assessment process involves four main steps: Registration, filling out a customized questionnaire, expert analysis, and receiving results. The questionnaire should take a few hours to a couple of days to complete. After that, EcoVadis experts spend 6-8 weeks reviewing your submission before releasing your scorecard.
An EcoVadis rating verifies your company’s sustainability. A good score can differentiate your business and make it more appealing to investors and customers. Medals are awarded in the categories of Bronze (top 50%), Silver (top 25%), Gold (top 5%), and Platinum (top 1%). Those in the bottom 50% do not get a medal.
EcoVadis focuses on a wide spectrum of ESG issues and provides customized questionnaires based on a company’s industry, size, and location. CDP focuses mainly on climate change, water, and deforestation. EcoVadis is aimed at business-to-business relationships, while CDP is geared towards stakeholders like investors and the general public.
To improve your EcoVadis rating, conduct a gap analysis to identify weak areas, develop a comprehensive action plan, use specialized ESG software for data preparation, compile supporting documentation, and invest in employee training and awareness.
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