In recent years, EcoVadis has developed into an important tool for making the performance of companies around sustainability measurable and comparable. On 1 January 2024, EcoVadis will introduce significant changes and adapt its evaluation standards. Without professional sustainability management, it will no longer be possible to win a medal in the future. We inform you about the upcoming changes and show you what this means for your own objectives and how you can meet customer requirements.
EcoVadis – briefly explained
- In recent years, EcoVadis has become an indispensable tool for making the sustainability performance of companies in the supply chain measurable and comparable. The EcoVadis assessment form is based on a company’s business activity, location, and size. Basically, it analyses actions, policies and results in the areas of labour and human rights, environment, business ethics and responsible sourcing.
- For an assessment, companies must upload extensive information and documents such as CSR reports, codes of conduct, internal procedures, or certificates. As a result, companies analysed by EcoVadis receive a scorecard that evaluates their corporate social responsibility (CSR) performance and summarises it in an overall score. Depending on the score achieved, companies can receive a bronze, silver, gold or platinum medal.
- A good EcoVadis score can be an asset in customer acquisition, help with tenders or improve the visibility of sustainability performance in the company.
What changes
As early as 2023, EcoVadis made significant changes to its assessment methodology. For example, the scoring thresholds and the eligibility criteria for medals were tightened. Another massive change is now due on 1 January 2024.
- bronze only for the best 35 per cent
- Probably the most drastic change is the raising of the threshold for a bronze medal. Whereas bronze was previously awarded to companies that belonged to the top 50 percent of all companies assessed by EcoVadis, from 2024 onwards applicants must belong to the top 35 percent.
- assessment using percentile thresholds
- Instead of the previous absolute scores, the percentile result, i.e. the result in comparison to other companies, will decide on the award of a gold, silver or bronze medal in future.
- In each case, the comparison with all companies evaluated within the previous 12 months counts.
- The relevant date is the date of publication of the scorecard, not the date of application or submission of the required information.
- minimum score in each category
- A minimum of 30 points must be achieved for each of the four categories (human resources, environment, ethics, responsible purchasing).
- This means that it is no longer enough to excel in one or a few categories. Weaknesses in other categories can no longer be compensated for.
- more sophisticated 360° assessment
- Even with good overall results, no medals are awarded if there are a certain number of so-called “observations” in the monitored elements.
- 1 serious observation in one of the analysed topics or
- at least 2 main observations in two or more subjects or
- more than 5 important observations in a single topic
- introduction of EcoVadis badges
- Badges will be introduced to compensate for the tightening of the medal limit.
- These plaques are awarded to companies that can demonstrate significant progress in ESG management, i.e. in the area of environmental, social and governance, despite being ranked outside the top 35 per cent.
- The Commited Badge required a minimum score of 45, which corresponds to a “good” performance in the EcoVadis methodology.
- The Fast Mover Badge requires a score between 34 and 44 including a minimum improvement of 6 points over the previous assessment, which must not be more than 18 months ago.
What does this mean for companies?
- A decision!
- For companies aiming for an EcoVadis medal, there is no way around professional sustainability management that involves all areas of the company.
- Indispensable for this is the provision of necessary resources for the implementation of measures to prove certifications, trainings, risk assessments,
- Communication with customers
- Companies participating in EcoVadis assessments due to customer requirements should seek dialogue and discuss the consequences of the EcoVadis changes.
- If, for example, the customer currently requires a bronze medal, this should not automatically be required from 2024 onwards.
Conclusion
The upcoming changes at EcoVadis are significant. They require a strategic approach and a willingness to adapt to the new requirements – either in improving one’s own rating or in communicating with clients.
As B+P Consultants, we are happy to advise you on how to analyse and improve your EcoVadis scores.
