The second annual EcoVadis Network Impact Report, released recently, shows rapid acceleration in the “scaling up” of sustainability impacts, such as the increased use of reuse & recycle measures, increased implementation of equality programs, and more. Since 2016, several positive environmental and social actions have risen sharply and the total scope of score improvement has tripled across the EcoVadis network.
The Impact Report outlines EcoVadis’ “Model for Impact” for how organizations can drive positive change through sustainable procurement and similar business relationships. It summarizes key actions and outcomes that are facilitated and tracked in the EcoVadis Ratings platform. This acceleration in positive impact is the result of not only quantitative growth within the EcoVadis network, but also new dimensions that increase the breadth and depth of collaboration and improvement in sustainable business practices.
Highlights from EcoVadis’ network in 2021 (compared to 2020) include:
54% increase in companies with reuse/recycle measures implemented
30% increase in the number of companies using or producing renewable energy
72% increase in companies with equality programs
47% increase in companies offering diversity training
The Impact Report details a new metric: As improvement in sustainability practices is a core indicator of the capacity to drive impact, EcoVadis monitors Improvement Magnitude which measures the total scope of score improvement across its network. Improvement Magnitude is the number of companies who improve their score in a given month multiplied by the average increase in score in the same period. Monthly Impact Magnitude increased from 2,657 in December of 2016 to 6,381 in December of 2021.
“Businesses and governments are feeling immense pressure to break down broad commitments into tactical targets and action plans – particularly in the value chain – and start executing and reporting on them,” said Pierre-François Thaler, Co-Founder and Co-CEO of EcoVadis. “By designing sustainable procurement strategies around performance and positive impact, organizations in the network are far better equipped to translate ambition into action and realize the positive environmental and social outcomes described in the report.”
EcoVadis’ approach is to “meet companies where they are” — across not only all industries, sizes, and locations, but regardless of their starting maturity — and support their sustainability improvement journey. Using a holistic ratings methodology, EcoVadis rates companies’ sustainability performance on a scale of 0 to 100. The rating focuses on 21 sustainability criteria that are grouped into four themes: Environment, Labor & Human Rights, Ethics and Sustainable Procurement, and are based on international sustainability standards. With each rating and improvement cycle, they build resilience, enhance value creation, and drive positive impact for the planet and society. In addition to quantitative growth in the size of the network, the EcoVadis impact model scaled up along these other dimensions:
- Carbon Data & Engagement: The Carbon Action Module adds a new layer of insight and tools to the EcoVadis Ratings platform to drive measurement and reduction of supply chain GHG emissions. Rollout began in July of 2021 with more than 3,500 Carbon Scorecards completed and shared in the network as of year-end, and the pace is accelerating.
- Private Equity: A growing number of Private Equity firms are now using EcoVadis Ratings on prospective and current portfolio companies to enhance ESG value creation in fundraising, investment decisions, portfolio company performance, and boosting valuations at exit.
“Our customers across the network have done tremendous work to achieve these results,” continued Thaler. “We are eager to deliver this year some key platform and reporting enhancements that will empower them to analyze and monitor impact metrics, such as those detailed in this report, at the company and industry level.”
For more information on how EcoVadis helps promote a greater understanding of impact at scale across its network, read the second annual EcoVadis Network Impact Report here.