In today’s rapidly changing business world, companies are increasingly expected to contribute positively to the planet and society. Sustainability is no longer just a trend—it’s a necessity. With regulatory mandates intensifying, embracing sustainable practices has become an important aspect of modern business operations.
EcoVadis is a tool that helps companies understand and improve their sustainability efforts. It provides assessments of a company’s sustainability performance and offer insights that help businesses identify areas where they can make improvements. In this article, we’ll provide you with a clear understanding of EcoVadis and how to get started.
What Is EcoVadis?
EcoVadis is a globally recognised platform that provides sustainability ratings, intelligence, and tools. It’s designed to help companies manage ESG (Environmental, Social, and Governance) risks and compliance, and meet corporate sustainability goals. It guides the improvement of sustainability performance across their operations and the entire value chain.
EcoVadis evaluates companies based on non-financial management systems, including:
- Environmental
- Labor & Human Rights
- Ethics
- Sustainable Procurement Impacts
These evaluations consider factors such as the company’s size, location, and industry. The results are presented in easy-to-read scorecards, which provide scores from zero to one hundred (0-100), and medals (bronze, silver, gold), when applicable.
In a nutshell, these scorecards offer insights into a company’s strengths and areas for improvement in terms of sustainability, and they can be used to help a company improve their sustainability efforts and develop action plans.
What Are the 4 Pillars of EcoVadis?
EcoVadis provides a detailed evaluation of sustainability performance across four key areas/pillars:
1. Environment
Examining how a company manages its environmental impact, focusing on elements such as energy consumption, greenhouse gas emissions, resource depletion, biodiversity, and waste management. Overall, the evaluation aims to understand the effectiveness of a company’s environmental initiatives and compliance with global standards.
2. Labor & Human Rights
Check whether a company upholds international labor standards and human rights within its operations. The assessment covers fair labor practices, working conditions, anti-discrimination policies, and the prohibition of forced and child labor. It evaluates how well a company ensures a safe and respectful workplace for all employees.
3. Ethics
Review the company’s adherence to ethical business practices, focusing on transparency, integrity, and anti-corruption measures. The assessment includes examining compliance with laws and regulations, the management of conflicts of interest, and the implementation of policies that promote ethical conduct.
4. Sustainable Procurement
Determine how a company manages the sustainability aspects of its supply chain. For example, by looking at how suppliers are selected and monitored, as well as the sustainability impacts of procurement decisions. Focusing on ensuring that the supply chain supports sustainable development goals and minimises adverse effects on the environment and society.
Introduction to EcoVadis Scorecard System
EcoVadis has a ranking system that evaluates a company’s sustainability performance against industry standards. This evaluation is based on various medal levels. These medals are determined through a percentile ranking system, which is based on published annual score thresholds.
The structure of the levels is as follows:
- Platinum: Awarded to companies that achieve scores in the top 1% of all evaluated companies, indicating exceptional leadership in sustainability efforts.
- Gold: Given to companies scoring in the top 5%, this level signifies advanced management and execution of sustainability practices.
- Silver: Recognized for landing in the top 25%, companies at this level demonstrate solid sustainability practices and proactive efforts.
- Bronze: Companies within the top 50% receive this medal, showing engagement in sustainability with potential for further improvement.
How Does EcoVadis Collect Data for Their Ratings?
EcoVadis collects data for their ratings through a detailed process. Initially, companies complete a self-assessment questionnaire detailing their sustainability practices and provide supporting documents such as policies, procedures, and reports to validate their responses.
EcoVadis will then review this information and cross-references it with external sources, including NGOs, media, and government bodies. Trained analysts then evaluate the data and generate a scorecard that includes the company’s sustainability rating, highlighting strengths and areas for improvement. This thorough process ensures that the ratings are reliable and valuable for companies aiming to enhance their sustainability efforts.
What Is the Benefit of EcoVadis?
EcoVadis can play a central role in guiding your efforts on the sustainability journey. One benefits of EcoVadis is its ability to help companies manage ESG risk and compliance. By using EcoVadis, your company can work towards achieving its corporate sustainability goals and drive impact at scale, both within your organization and throughout your value chain.
Additionally, the platform helps businesses to:
- Gain insights into your company’s sustainability performance, understanding strengths and areas for improvement in a clear and actionable manner, which can be used to make informed decisions.
- Benchmark your sustainability performance against industry standards, providing valuable context for understanding your company’s standing in terms of sustainability practices and performance.
- Share your sustainability performance data with trading partners through the platform, promoting transparency in your sustainability practices and providing visibility into your efforts to address any corrective actions or reassessments.
Ecovadis Consultation for Your EcoVadis Journey
The first step to get started with EcoVadis is by registering on the EcoVadis website. Here, you’ll be asked to create a company profile, specify business activity, update contact information, and, if invited, undergo a thorough EcoVadis assessment.
To assist businesses in preparing for this process, HQTS has a dedicated ESG department that can help navigate the EcoVadis assessment process. Our experts have years of experience in helping businesses successfully obtain their EcoVadis score.
We offer assistance in the following areas:
- Analysis and Gap Identification: We thoroughly review your responses to the EcoVadis questionnaire, assessing them based on the stringent criteria set by EcoVadis to identify discrepancies and areas lacking in your current sustainability practices.
- Recommendation for Strategic Improvements: Following the gap analysis, we provide you with a prioritised list of improvements and offer specific, actionable recommendations designed to address the identified gaps. Our team engages with you to discuss these recommendations, so that you have a clear understanding of each proposed improvement and its implications.
- Assistance with Questionnaire Completion: We help you prepare proper documentation and ensure that it’s ready for assessment. Additionally, we assist in accurately filling out the EcoVadis questionnaires so that your submission accurately represents your sustainability efforts and compliance
We sincerely hope that you found this article helpful. If you have any questions related to EcoVadis, feel free to contact our dedicated EcoVadis consultants by clicking here.
