EcoVadis has evolved into a relevant player in the landscape of sustainability assessments in today’s corporate world. An EcoVadis rating and certification can significantly influence your supplier relationship with corporate customers, who increasingly demand evidence of their suppliers’ sustainability performance.
Your corporate customers may request the results of your EcoVadis rating to qualify you as a new supplier as part of the tendering process (RFP/RFQ), to measure business risks related to their value chain, or to evaluate performance during an annual review.
Crucial for optimizing your sustainability performance is a thorough understanding of the EcoVadis rating and certification process, aligning with the latest methodology changes that will be implemented by EcoVadis for scorecards launched in 2024.
Although the changes will not affect your overall EcoVadis score, you may lose your current EcoVadis medal or receive a medal of a lower tier during your 2024 EcoVadis reassessment due to the recent changes to their “medals” program.
In this guide, we'll unravel the details of the EcoVadis rating and certification process, provide an overview of the recent modifications in their Medal Program and present some practical and proactive measures to address common challenges.
Understanding the EcoVadis Rating Model
EcoVadis operates on a subscription model, providing yearly assessments to companies from different industries. Once an EcoVadis assessment becomes available in your account, you can initiate the rating or rerating process for your company.
The allocation of the assessments is straightforward: each subscription year corresponds to one assessment, meaning a three-year subscription entitles you to three assessments. Each EcoVadis assessment remains valid for a twelve-month period, aligning with the duration of your active subscription.
To answer the EcoVadis questionnaire, you are required to upload a substantial amount of information and documents, including reports, codes of conduct, internal procedures, and certificates. Once the questionnaire is started, you need to submit the responses within a maximum of three weeks.
Companies assessed by EcoVadis receive a scorecard that assesses their sustainability performance and consolidates it into a score. Based on the obtained score, you may be awarded an EcoVadis bronze, silver, gold, or platinum medal and receive a respective certificate.
Medals and badges from EcoVadis acknowledge companies that have successfully undergone the EcoVadis assessment process, demonstrating a management system that effectively addresses the sustainability criteria as requested by EcoVadis.
Key Criteria Evaluated During the EcoVadis Assessment
The rating methodology assesses the quality of a company's sustainability management system across three fundamental pillars: Policies, Actions, and Results.
This pillar explores the robustness and effectiveness of a company's sustainability policies. It assesses how well-defined and communicated these policies are, setting the foundation for responsible business practices.
The Actions pillar evaluates the concrete steps taken by a company to implement its sustainability policies. It considers the effectiveness of the strategies employed and the tangible efforts made to align business operations with sustainable practices.
This pillar gauges the actual impact and outcomes of a company's sustainability initiatives. It assesses the tangible results achieved, emphasizing the real-world contribution to environmental, social, and ethical objectives.
These three management pillars further unfold into seven management indicators, each providing a nuanced perspective on a company's sustainability efforts:
- Policies: Considers the guidelines, goals, objectives and governance of a company
- Endorsements: Focuses on the recognition of external sustainability initiatives (e.g. UN Global Compact)
- Measures: Measures the effectiveness of specific sustainability actions, emphasizing the importance of well-defined metrics and benchmarks in driving meaningful change
- Certifications: Examines the certifications obtained by a company, providing an additional layer of validation for its adherence to sustainability standards
- Coverage – Deployment of Actions: Assesses the extent and depth of a company's sustainability actions, considering the coverage and impact across its operations
- Reporting: Evaluates the transparency and quality of a company's sustainability reporting, emphasizing the importance of clear and comprehensive communication
- 360° Watch Findings: Offers insights on the stakeholders’ perspective on potential risks and opportunities related to a company's sustainability practices
Sustainability Topics Impacting the EcoVadis Rating
EcoVadis evaluates companies based on a comprehensive set of criteria:
- Environment: Assessment of a company's ecological footprint and sustainability initiatives
- Labor and Human Rights: Evaluation of labor practices, human rights, and community engagement
- Ethics: Scrutiny of business ethics, transparency, and integrity
- Sustainable Procurement: Assessment of the company's efforts and practices related to sustainable procurement processes
In the following, you can find the details for each topic:
One of the primary focal points of the EcoVadis assessment revolves around a company's environmental practices. This entails an examination of the ecological footprint left by the organization and an in-depth analysis of the sustainability initiatives in place. Companies are scrutinized for their commitment to minimizing environmental impact of their products or services and fostering sustainability across their operations.
- Energy Consumptions and Greenhouse Gas (GHG) Emissions
- Local and Accidental Pollution
- Materials, Chemicals and Waste
- Product Use
- Product End-of-Life
- Customer Health and Safety
- Environmental Services and Advocacy
2. Labor and Human Rights
Social responsibility with regard to labor and human rights forms another critical category of the EcoVadis assessment, encompassing an extensive evaluation of a company's labor practices, adherence to human rights, and the depth of engagement with local communities.
Sub-topic: Human Resources
- Employee Health and Safety
- Working Conditions
- Social Dialogue
- Career Management and Training
Sub-topic: Human Rights
- Child Labor, Forced Labor and Human Trafficking
- Diversity, Discrimination and Harassment
- External Stakeholder Human Rights
EcoVadis delves into the ethical underpinnings of a company's business conduct, scrutinizing aspects such as transparency, integrity, and adherence to ethical business practices.
- Anticompetitive Practices
- Responsible Information Management
4. Sustainable Procurement
This crucial pillar assesses the company's dedication and efficacy in integrating sustainability considerations into its procurement processes. EcoVadis evaluates how well a company ensures that its supply chain aligns with ethical, social, and environmental standards.
- Supplier Environmental Practices
- Supplier Social Practices
Understanding the factors that influence your EcoVadis rating is pivotal for businesses for obtaining a high score and receiving a EcoVadis medal.
EcoVadis Scoring and Medals System
The EcoVadis scoring and medals system is designed to recognize and acknowledge a company's sustainability achievements relative to all rated companies in the expansive EcoVadis database. The medals serve as a dynamic indicator of ongoing commitment to improvement.
The EcoVadis Score ranges from 0 (“insufficient”) to 100 (“outstanding”) and reflects the company’s sustainability management system at the time of the assessment. EcoVadis employs scoring guidelines applied by their analysts during assessments. The score allows benchmarking against industry peers and provides a measure of a company's sustainability performance.
The EcoVadis Scorecard highlights strengths and improvement areas for each theme. Strengths showcase positive sustainability practices, while improvement areas signal opportunities for corrective actions. Each improvement area comes with a suggested priority level for implementing corrective actions.
Changes to the 2024 Medal Program
In the transformative landscape of the EcoVadis Medals Program, significant modifications are introduced for 2024, reshaping the criteria for sustainability recognition.
Key Changes to the EcoVadis Medals Program for 2024:
- Percentile Shift: Medals now go to companies in the top 35th percentile, compared to the previous top 50 percent.
- Dynamic Thresholds: No static score thresholds; medals are awarded solely based on percentile rank.
- Minimum Score Adjustment: The minimum score for Sustainable Procurement increases from 25 to 30.
- Adapted Findings: Large companies won't be ineligible based on minor findings, adapting to size and complexity.
- New Badges: Introducing the Committed Badge (for scores of 45 or above) recognizing a “good” performance according to the EcoVadis methodology and the Fast Mover Badge (for scores in the 34-44 score bracket) recognizing improvement of 6 points or more in their reassessment within the last 18 months.
New Medal Levels from January 2024
- Platinum: Top 1%
- Gold: Top 5%
- Silver: Top 25%
- Bronze: Top 35%
Starting in 2024, medals will be granted based on percentile thresholds instead of the earlier practice of using a specific score range for each medal tier. In particular, the change in the criterion for medal eligibility from the top 50 percent to the top 35 percent will reduce the number of companies that receive medals.
The company's percentile rank is determined and displayed on the online scorecard at the time of its publication. This percentile rank provides a comparison of the company's performance with all rated entities in the EcoVadis database over the preceding 12 months. The percentile rank is calculated across all industries, offering a broad comparison rather than industry-specific assessments.
The incorporation of two new badges adds dynamism into the program, providing companies that may not qualify for a medal under the updated criteria with the chance to earn a badge, recognizing their commitment and ongoing improvement endeavors.
Further, Ecovadis assigns no medal if you score below 30 in either Environment, Labour & Human Rights, Ethics and/or Sustainable Procurement. And a company might not qualify for a medal if it has any severe or major findings in the "360° Watch Findings" within the sustainability themes.
Strategies to Enhance Performance in the Reassessment
Following the completion of your initial assessment, EcoVadis suggests an annual rerating for your company. As your subscription reaches the end of each period, it automatically renews.
This enables you to update your score and enhance your sustainability performance for the forthcoming rating year in alignment with EcoVadis' framework. This feedback loop is instrumental in refining your sustainability practices and boosting your overall rating over time.
To optimize your EcoVadis rating and foster improvement for your reassessment, consider implementing the following strategies:
1. Leverage Feedback Received from the Assessment
Take some time to reflect on the insights and feedback provided in your EcoVadis assessment and note down the areas for improvement for your responses. Set up targeted measures to address the weaknesses and foster the collaboration and engagement with the involved team members and your supply chain partners.
2. Establish Mechanisms for Ongoing KPI Monitoring
Identify central KPIs for your company and implement a robust system for continuous monitoring. Regularly track and analyze relevant metrics to ensure that your sustainability initiatives remain on track.
3. Prepare the Data Collection before the Reassessment started
Anticipate the data requirements for your EcoVadis reassessment well in advance. Proactively gather and organize the necessary information, ensuring a smooth and efficient process when the reassessment period begins.
Understand and internalize the specific requirements of the EcoVadis assessment, such as the document upload restrictions. Ensure that your team is well-versed in these guidelines to avoid potential pitfalls.
By proactively addressing these key factors and implementing effective strategies, your company can not only achieve a favorable EcoVadis rating but also contribute meaningfully to global sustainability objectives. Read on to understand how automation software can help you.
Use Software to Successfully Master the EcoVadis Reassessment Process
As you gear up for the annual reassessment, leveraging software can be a game-changer. Let's explore how automation software can support you in optimizing your EcoVadis rating.
Software can help you
- systematically address the insights from your EcoVadis assessment, assign responsibilities, and overview progress of the identified improvement areas
- track sustainability metrics, making it easier to monitor KPIs continuously and take prompt corrective actions
- organize the collection and storage of information required for the EcoVadis reassessment (with features like automated reminders)
- stay ahead of specific requirements and changes outlined by EcoVadis by including document upload restrictions and further guidance templates in alignment with EcoVadis guidelines
As EcoVadis is committed to providing a nuanced and dynamic framework that aligns with the evolving landscape of responsible businesses, it is Important to stay up to date with yearly changes.
By integrating Sunhat’s software solution into your sustainability management, your company can enhance efficiency, accuracy, and collaboration, ensuring that you are well-prepared when the reassessment period begins.