Kluthe Magazine
« The Sustainability Assessment System Explained »
EcoVadis SAS is a Paris-based company, established in 2007, that operates globally to assess sustainability practices within companies. The outcome is the EcoVadis Sustainability Rating. This rating allows participating companies to precisely determine their standing compared to others in their industry and identify areas for improvement. Learn here about how the service works and what the EcoVadis Rating truly entails.
Why EcoVadis Rating?
Many companies strive to improve sustainability for various reasons. For example, the chemical industry is interested in demonstrating to society how it increasingly minimizes the environmental impact of production through green chemistry, achieves social goals, and makes supply chains for raw materials in the chemical sector progressively more sustainable. A challenge in this area is defining measurable goals and indicators to track improvements and make comparisons. EcoVadis helps companies overcome these challenges by providing a reliable assessment and monitoring of their sustainability performance.
Questions that might influence the assessment include:
- Has the company calculated a CO2 balance?
- Does it set CO2 reduction targets?
- How does it manage finite and critical resources?
- Is there a human rights officer?
- Is there a sustainable waste management and recycling program?
- How are gender equality and occupational safety ensured?
- Are there comprehensive employee training programs?
- Is the supply chain traceable?
- Does the company engage in social initiatives?
Service Management
To monitor a company’s sustainability and rate it through EcoVadis, reliable information on operational standards, treatment of employees, respect for human rights, and environmental protection along the supply chain is needed. The company uses diverse information sources, including client documents, third-party certificates, business partner data, and publicly available information. This data is stored in a secure cloud and protected from loss and unauthorized access, through processing via a SaaS platform. SaaS stands for Software-as-a-Service, a model widely used in customer relationship management (CRM) where it supports process optimization and profitability enhancement. A unique, specially developed methodology is available for sustainability assessment. This methodology enables a comprehensive rating of a company’s commitment to sustainable practices (Corporate Social Responsibility, CSR).
Methodology for EcoVadis Rating and Scorecard Creation
Alongside the EcoVadis Rating, which allows companies to compare their sustainability management with others in the same industry, EcoVadis creates a scorecard. This report details individual results and highlights areas for improvement. Built on international sustainability standards like the United Nations Global Compact, the Global Reporting Initiative, and ISO 26000, the EcoVadis methodology is based on seven core principles:
- Assessments are conducted by highly qualified international experts.
- Evaluation procedures are tailored to specific industries, company sizes, and countries.
- Using all available sources ensures extensive stakeholder input for a reliable rating.
- Modern Technology enables secure, confidential processes with accelerated processing times.
- Documentation is transparent and traceable.
- Evaluation is based on empirically derived and scientifically validated information.
- Continuous improvement in assessment processes enhances methodological excellence.
The EcoVadis Sustainability Scorecard
The EcoVadis Sustainability Scorecard contains the assessment results, covering four areas that are also relevant to the chemical industry and promote sustainable chemistry:
- Environment
- Labor and human rights
- Ethics
- Sustainable procurement
Twenty-one indicators are available for evaluating individual performance. These indicators generate points that contribute to the company’s overall rating, allowing for easy comparison of sustainability performance across companies. Additionally, the point scores are used for the rating, which is linked to the awarding of recognition medals: Platinum (top 1%), Gold (top 5%), Silver (top 25%), and Bronze (top 50%). These medals can be used in corporate materials for promotional purposes.
Using the Scorecard in Business Relationships
The EcoVadis Scorecard can be requested by other companies to assess if a business partner meets high standards or presents CSR risks, impacting supplier selection. Clients may also require corrective measures from suppliers if needed. For instance, the chemical industry can only truly engage in green chemistry if raw material suppliers practice sustainable chemistry. A supplier’s scorecard provides reliable insight into the standards of its production processes.
Summary of the EcoVadis Rating Benefits
An established methodology with proven technology, quickly delivers a comprehensive assessment of a company’s sustainability, meeting environmental, sustainability, and legal requirements. Self-assessment questionnaires are tailored to company needs, while strengths and improvement areas are revealed through the EcoVadis Rating. Key performance indicators facilitate efficient, trackable improvements, and the scorecard information exchange between companies strengthens business networking.
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[1] https://ecovadis.com/de/solutions/ratings/
