EcoVadis Methodology – to measure Sustainability Management System

The objective of the EcoVadis methodology is to measure the quality of a company’s sustainability management system. EcoVadis examines a company’s environmental or sustainability management system from three perspectives: policies in place, actions taken, and outcomes. Let’s look at each of these scoring categories in more detail.

Policies 

Policies account for 20% of the total score. As a result, it’s crucial to consider when assessing your environmental management system. Policies are important because they carry your mission, outline your value statements, and direct your company in putting them into action. EcoVadis gives you a score based on the quality of your policies:

The EcoVadis assessment considers the following factors in determining the score:

• Depending on the size and industry of the company, whether the policy in place covers relevant (“activated”) criteria;
• Qualitative objectives are present;
• Quantitative objectives (targets) are present;
• The presence of sustainability reporting tools to track progress and monitor objectives (governance);
• The existence of a review mechanism to ensure that the policy is kept up to date;
• The policy’s scope of application: whether it applies to all employees and all locations.

Endorsements

EcoVadis also considers the external endorsements (5 percent of the overall score) that a company supports in order to assess its commitment and proactivity toward social and environmental initiatives as well as industry-specific goals. Commitments to the UN Sustainable Development Goals, the UN Global Compact, and CDP are examples of such endorsements.

Measures

EcoVadis evaluates the actions taken to support objectives set in each of the four pillars (environment, labour, business ethics, sustainable procurement). Measures account for 26% of the overall score and as such, represent the most important category that EcoVadis evaluates. In other words, it forms the backbone of your environmental management system.

The methodology scores your measures as follows:

• The EcoVadis assessment considers the following factors in determining the score:
• Relevance: whether the measures are taken address relevant (“activated”) criteria based on the size and industry of the company;
• Applicability: if the attached documentation adequately answers the question;
• Validity: whether the proof is sufficient (i.e., current, and clearly indicating that the documentation belongs to the company);
• The scope of the coverage (how many sites or entities does your measure cover). The coverage factor has a significant impact on the company’s “measures” score.

Certifications

Certifications provide external validation and quality assurance of a company’s management system, products, or services, to state the obvious. External certifications have a positive impact on a company’s score because they account for 14% of the total score. ISO standards, SMETA audits, and SA8000 are examples of CSR certifications.

The EcoVadis assessment considers the following factors in determining the score:

• Validity (the certificate is current); Inclusion of CSR issues;
• Legitimacy (certificate issued by an independent and accredited third-party organization);
• The scope of the coverage (how many sites does your measure cover).
• The coverage factor has a significant impact on the company’s measure score.

Reporting

A company’s ability to set, measure, and monitor relevant key performance indicators is demonstrated through proper reporting (KPIs). It demonstrates that the company’s actions, as outlined in its policies, are geared toward improvement. The EcoVadis score allocates 14 percent of the total points to sustainable reporting, which is scored as follows:

The EcoVadis assessment considers the following factors in determining the score:

• Relevance: whether the KPIs in place cover relevant (“activated”) criteria based on the size and industry of the company;
• Transparency: whether the KPIs are available to stakeholders in a public format;
• If the reporting is current (within the last two years), it is considered timely.
• Comparability: both over time and in comparison to peers;
• Coverage: whether the reporting is relevant to the entity being evaluated (the KPI cannot be from the parent company).

360° Watch

EcoVadis employs an artificial intelligence algorithm that searches the public domain for positive and negative news about a company’s sustainability efforts. The 360 Watch is responsible for 20% of the total points awarded. The 360° Watch management indicator will assign a score to a company based on the findings:

The EcoVadis assessment scrapes the following to determine the score:

• The content of court rulings or legal settlements
• Official statements or publications of administrative government bodies;
• Factual statements made by the press or organisations that are recognised as working according to scientific standards and are financially unrelated to the content of the statements, such as independent non-governmental organisations (NGOs).

The EcoVadis methodology sets the 360° score at 75 points by default, but it can be increased or decreased based on the following principles:

• The chronology of the case’s facts;
• Positive or negative case nature;
• The severity of cases with negative consequences: severity can be determined by a number of factors, including the frequency of occurrence, the percentage of the workforce involved, the amount of financial sanction, and so on.

About PQSmitra

PQSmitra provides Social Compliance Consultation for Industries Ranging from Manufacturing, Textile to Supply Chain. With over 20 years of experience in quality assurance & Social Compliance, we at PQSmitra are ready to help your business build meaningful Ethical Business and offer handholding right from Self-Evaluation to closing the final Corrective Action Plan Report (CAPR).

PQSmitra Team helps organizations to implement the requirements of Ecovadis in the most simple and systematic manner. The methodology of system implementation covers Initial review, planning followed by implementation, and documentation. PQSmitra Team offers active support and hand-holding to organizations to achieve successful system implementation and positive audit results.