EcoVadis’ CSR Index. Global Sustainability Performance in Business Ethics Picking Up, According to EcoVadis’ Second Annual CSR Risk and Performance Index.
EcoVadis, the world’s most trusted provider of business sustainability ratings, has published the second annual edition of its Global CSR Risk and Performance Index. The report provides an updated look at the corporate social responsibility (CSR) performance of more than 33,000 companies evaluated by EcoVadis, across the calendar years 2015 through 2017.
The index examines organizations across nine industry divisions: light, heavy, and advanced manufacturing, food and beverage, construction, wholesale, transport, information and communication technology (ICT), and finance, legal and consulting.
The index was built using EcoVadis scores, which are based on 21 CSR criteria across four themes:
– labor practices and human rights,
– business ethics
– sustainable procurement.
Scores are based on a scale of zero to 100
About five percent of organizations score above 64 which represents “advanced” to “outstanding” performance, while companies with scores above 45 are considered “engaged.”
Scores of 25 to 44 represent medium risk, and scores below 25 are considered high risk.
In addition to industry divisions, scores were analyzed across five geographic regions and two size groups – small and medium sized businesses (companies with 26-999 employees) and large organizations (1,000 or more employees). Selected highlights from EcoVadis’ research include:
– Business ethics is the most improved CSR theme globally, with ICT the highest scoring industry in this theme (45.2). Companies across all categories made a marked improvement in business ethics (global score of 41.2), especially in fighting corruption and bribery and information security issues.
– Global environmental performance dipped slightly, from 45.4 to 45 overall. Small and medium food and beverage companies (43.9) and large advanced manufacturing companies (49.6) were top performers in the environmental category.
– Labor practices and human rights initiatives are still going strong. Small and medium food and beverage companies (47.7) and large ICT companies (43.3) were the highest performers in this theme.
– Sustainable procurement practices need more attention. Small and medium food and beverage companies were top performers in sustainable procurement practices (42.1), but overall this theme lagged behind in performance, posing risks for industries across the board.
Top performing industries are adopting best practices and regularly measuring progress:
Small and medium sized food and beverage companies were the best scoring division globally, with an overall CSR score of 46.8.
Advanced manufacturing companies were performance leaders for the large size group with an overall score of 44.2.
European companies consistently outperformed other regions across all four themes, with large companies scoring 49.5 and small and medium businesses 48.4. In comparison, large North American companies scored 40.8 and small and medium businesses 44.3.
CSR improvements: Among companies who were reassessed a second or third time, over 60 percent in most regions improved their score, and roughly 15 to 17 percent maintained their scores. Small and medium sized North American companies were third worst (after China) on this measure with only 49 percent improving their score – yet 26 percent held steady.
“The global progress in business ethics and information security is an optimistic indicator that businesses recognize the importance of data protection and are becoming more aware of security risks that could impact operations. The positive trajectory, especially in the ICT industry, is likely a byproduct of the GDPR legislation established in the European Union, and shows organizations are prioritizing digital responsibility,” said Pierre-Francois Thaler, Co-CEO of EcoVadis.
While the overall average score of both size groups (large and small/medium) were close, the average score of small and medium sized businesses is increasing (40.7 in 2015 to 42.4 in 2017) at a faster rate than their larger counterparts (remained flat at 39.6). Average scores of companies in the small portfolio consistently improved across the three years in six out of the nine industry divisions, whereas large companies demonstrated the same result in only three sectors.
“It is very encouraging to see, despite economic uncertainty, deregulation, and other external pressures that could impact sustainable operations and business longevity, that almost 80 percent of companies that have been reassessed two or more times are maintaining or improving their score,” added Thaler.
In looking at performance across regions, Europe is still a clear leader across all industry divisions and size groups. Businesses in Latin America were only slightly behind North American counterparts, and could surpass them if they are able to bring up their ethics theme average, which could easily be spurred by new anti-corruption and data protection legislation or enforcement actions. North America was the only region to improve the environmental score.
EcoVadis is the world’s most trusted provider of business sustainability ratings, intelligence and collaborative performance improvement tools for global supply chains. Backed by a powerful technology platform and a global team of domain experts, EcoVadis’ easy-to-use and actionable sustainability scorecards provide detailed insight into environmental, social and ethical risks across 190 purchasing categories and 150 countries. Industry leaders such as Johnson & Johnson, Verizon, L’Oréal, Subway, Nestlé, Salesforce, Michelin and BASF are among the more than 50,000 businesses on the EcoVadis network, all working with a single methodology to evaluate, collaborate and improve sustainability performance in order to protect their brands, foster transparency and innovation, and accelerate growth.