Highlights

• Companies with multiple EcoVadis Ratings have improved significantly, with higher scores overall than first-time-rated companies.
• Europe leads on Labor & Human Rights, while Sustainable Procurement has room for growth. Environment has seen big improvement.
• Despite progress, there are still issues in Sustainable Procurement and Ethics in times of economic and geopolitical uncertainty.

All companies in the EcoVadis Network are making good progress on various sustainability challenges. The 8th edition of the Business Sustainability Index by EcoVadis.

This edition looks at trends from over 1,25,000 supplier sustainability ratings, including around 38,000 from 2023, from 2019 to 2023. The analysis covers four themes: Environment, Labor & Human Rights, Ethics, and Sustainable Procurement. It looks at how suppliers perform across these themes to measure the state of global value chains in terms of sustainability.

The report shows how big buying organisations are using these ratings to manage risk, increase resilience, comply with ESG regulations and drive future success. Suppliers are also reducing risk, improving efficiency, cutting costs and strengthening relationships with partners.

For example, companies with multiple ratings are above industry and regional averages. They have good policies, and measurable targets and share their progress which benefits their broader supply chain.

Key findings

• Network Improvement: Companies with multiple ratings score 55.1, up from 46.7 for first-time-rated companies. Re-rated companies typically see an 8-10 point increase per theme.
• Baseline Concerns: In 2023, 42% of first-time-rated suppliers are in lower performance categories, meaning sustainability risks persist. 80% of high to medium-risk companies are in Sustainable Procurement.
• Regional Performance: Companies are more advanced on Labor & Human Rights, with Europe showing the biggest improvement. North America also improved, with Canada and US scoring higher. All industries are above 50 in this theme.
• Sustainable Procurement Challenges: Despite Europe’s improvement, many companies are still in risk ranges, with a 41.2 average. North America and other regions show small improvements.
• Environmental Progress: Global average score for Environment increased by 2.1 points in 2023. Companies with multiple ratings score 57.2. But Food and Beverage industry went down.
• Ethics Challenges: Ethics has seen very little improvement, only 0.1 point in the last year, so still many challenges.

Sylvain Guyoton, EcoVadis Chief Rating Officer, says the Sustainable Procurement theme is getting more important as supply chain and due diligence laws are expanding. Companies will need to work more with suppliers to stay compliant and competitive.

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Source: EcoVadis