EcoVadis Ratings

Methodology Overview
and Principles
Document Classification | EcoVadis Public EcoVadis 2022 V2.5
The Need for Global, Reliable and Challenges We assess the sustainability performance and
Actionable Sustainability Ratings But implementing sustainability practices on a wide scale is
social compliance audit results of prioritized
suppliers using the EcoVadis online platform,
Sustainability performance has become an essential also a challenge, for requesting companies (stakeholders
such as buyers, investors, business partners) and rated leveraging this widely recognized supplier
component of a company’s business value. Businesses of evaluation tool while also unlocking increased
all sizes are being held accountable for environmental, companies alike, due to:
visibility and insights.”
social and ethical impacts within their own operations and • The proliferation of sustainability standards and labels;
across their value chain. Executives face the daunting task
of understanding these risks and integrating criteria into • The internal change management needed to integrate
business decisions and relationships to ensure their sustainability into roles, processes and relationships;
company remains reliable and competitive. Sustainability
• Challenges around engaging partners through common
is now a strategic priority that procurement, finance,
sustainability standards that create mutual value; Mars, Inc.
investment and other executives must consider in their
business relationships. In this context, the need for simple, • A lack of internal ESG expertise and/or resources;
reliable and global sustainability ratings has become a
must. • The complexity of supply chains and/or business and
investment networks.

Benefits
The EcoVadis Solution
The wide-ranging benefits of implementing sustainability
practices include reducing the risk of operational or supply The EcoVadis solution addresses these issues by
chain disruptions, protecting brands and company providing easy-to-use, dynamic scorecards delivered via
reputation, lowering costs through collaborative actions a web-based platform. It enables procurement, finance,
(e.g., reduction of energy consumption), facilitating access investment, banking and other teams to monitor the
to capital and increasing valuation (e.g., integration of sustainability performance of their portfolios and trading
ESG1 factors into investment decisions) and providing partners and collaborate with them to drive continuous
greater market access to consumers demanding green improvement. 1. EcoVadis’ use of the term “sustainability” encompasses the reference model in this document. For familiarity, similar
terms such as “ESG” (environmental, social and governance) and “CSR” (corporate social responsibility) are used, and
and responsible products and services. should be interpreted in the scope of this definition.

2 18
The EcoVadis rating methodology measures the quality of a company’s sustainability management system
through its commitments (also known as policies), actions and results. The EcoVadis sustainability rating
methodology is based on the following seven foundational principles.

Evidence Based Technology is a Must

The burden of proof is on the company being rated. A rating system can only become reliable and robust
It must provide supporting documents, such as if it is supported by technology. Technology facilitates
commitments, certificates and KPI reporting, that industrialization, which enables fast learning, growth
showcase the maturity of its sustainability management and scalability.
system. The company’s declarations are only credited
if evidence is provided.
Assessment by International Sustainability
Industry, Location and Size Matter Experts
The sustainability management system is assessed based The supporting documents are analyzed by a team of
on material industry issues, presence in risk countries and sustainability experts from around the globe who keep
the size and geographical span of the company. track of the latest best practices in sustainability.

Diversification of Sources Traceability and Transparency

The rating is based not only on supporting documents Every document used in the rating process is stored
provided by the company but also on information securely and can be traced. Rated companies have
published by non-governmental organizations (NGOs), access to detailed results on each scoring decision.
trade unions, international organizations, local authorities
and other third-party organizations (e.g., auditors, CDP,
external compliance database). Excellence Through Continuous Improvement
A professional rating methodology is one that is open
to quality controls, continuous improvement and
stakeholder feedback. EcoVadis has implemented
a company-wide quality management system supported
by a client advisory board and a scientific committee.
3 18
Companies implement sustainability
management systems for two
primary reasons:
1. To comply with legal requirements and mitigate risks for
stakeholders. For example, companies can implement Overarching Standards Create Value
an anti-corruption management system to reduce the and Drive Impact

Voluntary

Proactive
risk of employees engaging in illegal activities.
Go beyond strict legal
requirements (e.g., CO2 emissions,
energy reduction, accident rates)
2. To improve business performance and their bottom
Policies
line. For example, companies may implement initiatives
to reduce energy consumption and, therefore, reduce
costs. Another example would be the implementation Dual Objectives
of training programs to develop human capital, Sustainability
Management
increasing both efficiency and productivity.

lts
System

Ac
u

t
s

i
Re

on
Laws Ensure Compliance
s
and Mitigate Impact
on Stakeholders

Reactive
Legal
Remain compliant with legal
requirements (e.g., corruption,
discrimination, labor disputes)
and minimize risk for stakeholders

4 18
EcoVadis considers an effective sustainability management POLICIES
system to be one that develops policies, implements Policies, objectives, targets, governance
actions and reports on results.
These three management layers are further categorized ENDORSEMENTS
into seven management indicators: Commitments, Endorsement of external sustainability
Endorsements, Actions, Certifications, Coverage – initiatives and principles
Deployment of Actions, Reporting KPIs and 360° (e.g., UN Global Compact)
Watch Findings (360).
These elements originate from the PDCA (plan–do–
check–act) method, a four-step iterative process that
forms the basis for a wide range of management Policies
standards around the world.

REPORTING Sustainability
PDCA Cycle Reporting information includes the Management
quality, transparency and level of key

s
PDCA (plan–do–check–act or plan–do–check– System MEASURES

Act
t
performance indicators (KPIs).

l
adjust) is an iterative four-step management Actions implemented (e.g., procedures,

u
These indicators should pertain to

s
method used in business for the control and training, equipment)

i
e
the scope of the assessed company,

o
R

n
continuous improvement of processes. cover all operational sites, be recent
s
(i.e., within the last two years) and be
The concept of PDCA is based on the scientific CERTIFICATIONS
readily available to stakeholders (e.g.,
Certifications, labels, third-party audits
method, as developed from the work of Francis KPIs on total energy consumption in
Bacon (Novum Organum, 1620). The scientific KWh within the last two calendar
method can be written as “hypothesis”– years) COVERAGE
Level of deployment of certificates
”experiment”– ”evaluation” or plan, do and check. or actions throughout the company
360º WATCH FINDINGS
Stakeholder viewpoints (e.g., administrative
and judicial authorities, trade unions, NGOs)

5 18
 21 Sustainability Criteria
Sustainability Issues Covered: The
Reference Model Environment Labor & Human Ethics
When assessing a company’s sustainability management
system, it is important to define what is covered. The
Rights
Operations • Corruption
assessment considers a range of sustainability issues that Human Resources
• Energy Consumption & GHGs • Anticompetitive Practices
are grouped into four themes. The sustainability issues • Employee Health & Safety
are based on international sustainability standards such • Water • Responsible Information
• Working Conditions
as the Ten Principles of the UN Global Compact1, the • Biodiversity Management
International Labour Organization (ILO) conventions2 , the • Social Dialogue
• Air Pollution
Global Reporting Initiative’s (GRI)3 standards, the ISO • Career Management
26000 standard4 , the CERES Roadmap5 and the UN • Materials, Chemicals & Waste & Training
Guiding Principles on Business and Human Rights.6 Products Human Rights
Sustainable
• Product Use • Child Labor, Forced Labor & Procurement
• Product End-of-Life Human Trafficking
Note that the environmental themes cover impacts • Supplier Environmental
throughout the entire life cycle of products: impacts from • Customer Health & Safety • Diversity, Equity & Inclusion
Practices
production processes, product use and end-of-life. • Environmental Services & • External Stakeholder Human
Sustainability issues in the supply chain are also Advocacy Rights • Supplier Social Practices
integrated into the Reference Model to take into account
issues caused not only by direct suppliers but also Tier 2
and 3 suppliers. The issues covered in each assessment
are based on the relevance of the 21 sustainability issues
to a company’s context, such as industry, size and
operational locations.

1. The UN Global Compact is a voluntary initiative based on CEO commitments to implement universal sustainability 3. GRI is a leading organization in the sustainability field. GRI Standards help businesses, governments and other 5. The Ceres Roadmap for Sustainability presents 20 goals in the areas of governance, stakeholder engagement,
principles and take steps to support UN goals. The UN Global Compact’s Ten Principles are derived from the Universal organizations understand and communicate the impact of business on critical sustainability issues (source: GRI website). disclosure and performance that companies should seek to meet by 2030 to transform into truly sustainable enterprises
Declaration of Human Rights, the International Labour Organization’s Declaration on Fundamental Principles and Rights (source: Ceres website).
at Work, the Rio Declaration on Environment and Development, and the United Nations Convention Against Corruption 4. ISO 26000 provides guidance on how businesses and organizations can operate in a socially responsible way. This
(source: UN Global Compact website). means acting in an ethical and transparent manner that contributes to the health and welfare of society (source: ISO 6. In 2011, the United Nations Human Rights Council unanimously endorsed the UN Guiding Principles on Business and
website). Human Rights, a set of guidelines for states and companies to prevent and address human rights abuses committed in
2. Since 1919, the International Labour Organization has maintained and developed a system of international labor business operations (source: OHCHR website).
standards aimed at promoting opportunities for women and men to obtain decent and productive work in conditions of
freedom, equity, security and dignity (source: ILO website).

6 18
 Criteria Plastic Products Manufacturer Software Company
Environment

Context-Specific Rating Energy Consumption & GHGs × ×

To fully understand a company’s impacts, the assessment Biodiversity
framework is customized based on its industry, size and
operational locations. These parameters are identified
Air Pollution ×
when a company registers on the EcoVadis ratings
platform and shape the questionnaire it subsequently
Materials, Chemicals & Waste × ×
receives. The following table gives an example of how the Product Use
relevance of sustainability issues differs based on
industry*: Product End-Of-Life ×
Customer Health & Safety ×
Environmental Services & Advocacy × ×
Labor & Human Rights

Employee Health & Safety × ×

Working Conditions × ×
Social Dialogue × ×
Career Management & Training × ×
Child Labor, Forced Labor & Human Traf-
ficking ×
Diversity, Equity & Inclusion × ×
External Stakeholder Human Rights × ×

7 18
 Question on Actions Implemented

Criteria activation is also based on the size of the

company. This translates into the adaptation of questions Transport of Road Freight Consulting Services
that companies receive and the assessment methodology
applied. Several criteria or even an entire theme can be
deactivated for very small companies (i.e., less than 26 ENV314: What actions are in place regarding the reduction ENV313: What actions are in place regarding the reduction
employees) to reflect the parameters of their of fuel consumption and GHG emissions? of energy consumption and GHG emissions?
sustainability management system. Customization is also • Use of IT tools for optimizing route planning • Reduction of energy consumption through employee
performed at the criteria level. For example, as the awareness programs
• Promotion of off-peak distribution to clients
approach that a consulting company uses to manage its • Significant use (>20% of energy mix)
• Provision of live traffic information to drivers of renewable energy
exposure to climate change risks will be very different
from that taken by a road freight company to reduce its • Systematic optimization of truck loads • Reduction of energy consumption through innovative
GHG emissions, the questionnaires that these companies • Provision of regular eco-driving training to employees technologies (please specify)
receive will fundamentally differ. EcoVadis analysts • Provision of tools for clients to optimize transport demand • Monitoring of direct CO2 emissions
perform a bottom-up analysis of each industry to inform • Monitoring of indirect CO2 emissions
• Provision of "carbon compensation" transport options for clients
this process. • Measures to optimize transport or reduce CO2 emissions
• Provision of "CO2 emissions count" transport options for clients
from transport
• Others (please specify)
• Official emissions offsetting program (e.g., carbon-neutral
program)
• Monitoring CO2 emissions per type of service
• Company sponsoring of research projects on climate change
(please specify)
Important • Measures to reduce CO2 emissions from business travel (e.g.,
The questionnaire is used as a tool teleconferencing, video-conferencing)
to engage the company and collect • Measures for Green IT (e.g., efficiency of data centers or office
supporting documentation. It is not hardware, virtualization, data life cycle management, etc.)
directly used to score the company’s • Others (please specify)
sustainability management system.

8 18
A. Supporting Documents and Data B. Document Analysis
During the questionnaire process, EcoVadis requires organizations can also be submitted. We also partner with Our sustainability experts conduct a comprehensive
companies to submit formal, recent and credible specialized data providers, such as external compliance document analysis, looking for tangible evidence of
documentation related to their company’s sustainability databases, to identify potential regulatory, commercial declarations made in the questionnaire. Analysts verify
management system, including sustainability reports, and reputational risks. The data collected through these the questionnaire responses and reject or approve
codes of conduct, employee handbooks, certificates, partnerships serves as additional input for the analysis of declarations based on the supporting documentation
supplier CSR charters, policies, procedures and training every assessment. and methodology requirements. Evidence in supporting
materials. On-site audits performed by third-party documents is not considered unless declared in the
questionnaire.

ts On
en bo
ar
em
v

di
ro

01. Onboarding 02. Assessment 03. Results 04. Improvements

ng
Imp

Full-Service Online registration and Sustainability expert Easy to use and dynamic Online Corrective Action
Solution qualification (e.g., analysis combining scorecard available on Plan feature available to
industry, size, location) of multiple data sources the EcoVadis ratings drive continuous
all rated companies. (e.g., online questionnaire, platform. Quantitative improvement.
As

supporting documents, and qualitative results

s
lts

es

sm
Resu en
t 360° Watch Findings). published.

9 18
C. Stakeholder Opinion – 360° Watch Findings Government Bodies NGOs International Specialized Press
• European Economic and • China Labor Watch (China) Organizations • China CSR Map (China)
EcoVadis continually strives to increase the use of
Social Committee (Europe) • Human Rights In China • European Court of Human • Novethic (France)
external sources (stakeholders) providing information on
the rated company. The methodology integrates • European Environment (China) Rights • Corpwatch (International)
thousands of external sources (e.g., NGOs, trade unions, Agency (Europe) • Greenpeace (International) • EU Ecolabel • OneWorld network (Inter-
international organizations, local authorities, auditors, and • Conseil de la Concurrence • WWF (International) • Global Compact national)
other third-party organizations) via our online smart- (France) • Movimento Difesa del • International Labor • Illegal Logging (UK)
crawler tool (360° Watch Findings). For example, the • Competition Commission Cittadino (Italy) Organization • Lawyers & Settlements (US)
integration of data from external compliance databases (UK) • Friends of the Earth Middle • United Nations
enables us to screen and monitor companies against • Environmental Protection East (Middle East) Environment Program
global sanctions lists and identify companies with close Agency (US) • Milieudefensie • World Bank
ties to politically exposed people (those with higher • Food and Drug (Netherlands) • Extractive Industries
exposure to risks related to corruption, money laundering, Administration (US) • Silicon Valley Toxics Transparency Initiative
etc.). Here is an illustrative list of some of the sources
Coalition (US)
qualified to provide key information on everything from
innovative practices used by companies to ethics issues
and scandals:

Trade Unions Sustainability Networks

Major trade unions in: Algeria, • AccountAbility (International)
Australia, Belgium, Canada, • Instituto Ethos de Empresas e Responsabilidade Social (Brazil)
Ecuador, France, Germany, • Business for Social Responsibility (International)
India, Ireland, Italy, Japan, • CSR Europe (International)

360°
NGO’s

Mexico, Peru, Portugal, • World Business Council for Sustainable Development

Scotland, Spain, Switzerland, (International)
UK and US. • Business Social Compliance Initiative (International)
Watch Findings
• Business In The Community (UK)

10 18
The data collection process has been designed Increasingly, EcoVadis uses crowdsourced information
to enable a permanent flow of information from the web from NGOs and compliance data sourced from
to EcoVadis and from EcoVadis to requesting companies. regulatory bodies. Examples of sources used for
With this architecture (see diagram below) in place, monitoring labor conflict in China and collecting
companies can access a daily stream of stakeholder environmental compliance data in the US are shown
opinions and, in turn, react more rapidly to any in the right-hand column.
concerns raised.
EcoVadis may contract an independent auditor
to conduct an on-site verification on the assessed
company as a complementary part of the document-
based assessment. The audits are conducted for internal
Crawl Engine (Delta & RSS)
quality assurance and methodology verification purposes.
We obtain information from the on-site verification
Extractor process to supplement the company-provided evidence, Source: http://maps.clb.org.hk/strikes/en
striving for more reliable scorecards and assessment
Entity Recognition
processes. The site verification protocol is based
on SA8000.

Indexation

Entity Admin
Admin Console Web Search API
(Internal) (Dev)

Articles Index Source Entities

Search API

Source: https://echo.epa.gov/facilities/enforcement-case-search

EcoVadis Backend
11 18
D. Scoring Process

All analysis module information is combined to provide The scoring of the seven management indicators is based
the analysts with an overview (see the diagram below) upon strict scoring guidelines that are applied by all
of all the sustainability management system elements analysts. Regular training and internal quality controls are
identified in the document analysis stage. This summary performed to ensure consistent scoring among analysts.
will facilitate the scoring of the management indicators. Each scoring level is associated with a clear list
A score from 0 to 100 is allocated to each management of requirements. These guidelines are customized for
indicator in each theme. each of the themes under review.

0 25 50 75 100
Insufficient Partial Good Advanced Outstanding

No tangible elements Not all main criteria Main activated Particularly advanced Comprehensive and
identified. activated covered criteria covered by practices on all innovative practices.
or sufficiently acceptable practices. activated criteria. External recognition.
addressed.

12 18
The seven management indicator scores will then Weight
generate a score for each theme based upon the Labor & Sustainable Same Weight +
weight allocated to each management indicator. Environment Human Ethics Adjustments
Procurement
Rights
The three management layers, commitments, To Size/Country
actions and results are given the following
respective weights: 25%, 40% and 35% Policies 50 50 50 25

Policies
(see diagram).
25%
Endorsement of
0 0 0 0
Sustainability Initiatives
Measures/
50 75 25 25
Actions

Actions
Certifications/Labels/
100 50 50 50 40%
Audits
Implementation
50 25 50 25
Coverage
Reporting/
50 25 0 25

Results
KPIs
35%
360º Controversies/
75 75 75 75
Awards

Weight
Depends on industry and 28% 36% 18% 18%
size

60/100 50/100 50/100 40/100 52/100

13 18
 E. Scoring Scale

The overall score is a weighted average of the theme The assessment score enables companies to understand where their sustainability performance stands in absolute
scores. The activation and weight of each theme depend terms and to benchmark their performance against industry peers. The scoring scale is applicable for each theme
on the company’s industry, size and operational locations, and for the overall score. It has been intentionally designed to leave room for companies to improve their
enabling the unique characteristics of each company to sustainability practices.
be taken into account. Here are some examples of how
theme weights differ across industries:
Sustainability Likely
Performance Outcome

Road Freight IT Services • Structured and proactive sustainability approach

Best in • Policies and tangible actions on major issues with
Class High detailed implementation information
Environment 33% 22% 85-100 Outstanding Opportunity • Comprehensive sustainability reporting on actions
and key performance indicators
Labor & Human 33% 34% • Innovative practices and external recognition
Rights
• Structured and proactive sustainability approach
Ethics 17% 22%
• Policies and tangible actions on major issues with
Medium
Sustainable 65-84 Advanced Opportunity
detailed implementation information
Procurement
17% 22% • Significant sustainability reporting on actions
and key performance indicators

• Structured and proactive sustainability approach

45-64 Good Engaged • Policies and tangible actions on major issues
• Basic reporting on actions or performance indicators

• Minimum structured sustainability approach

25-44 Partial Medium Risk • Few policies or tangible actions on selected issues
(reactive)

• No policies or tangible actions regarding

Insufficient sustainability
0-24 High Risk
• Evidence in certain cases of misconduct
Increasing (e.g., pollution, corruption)
Risk

14 18
F. Strengths and Improvement Areas G. Validation and
Publication
In addition to scoring, a set of strengths and improvement areas are highlighted for each
theme in the EcoVadis Scorecard. These are presented in the scorecard according to the When scoring is
three management layers: commitments, actions and results. Strengths reflect valuable completed and
sustainability practices demonstrated by rated companies, while improvement areas the strengths and
indicate areas for corrective action implementation. Each improvement area has improvement areas are
a suggested priority level for potential corrective action plans. identified, the assessment
Analysts utilize a database of more than 2,000 strengths and improvement areas enters the validation
and are able to add assessment-specific information to customize the strengths or stage. The validation
improvement areas activated. stage consists of verifying
whether methodology
rules have been followed.
Following the validation
stage, a scorecard is
Room For Improvement Valuable Practices published online for
both the requesting
0 25 50 75 100 organization and the rated
Insufficient Partial Good Advanced Outstanding company.

IMPROVEMENT AREAS STRENGTHS

15 18
Quality Management
The EcoVadis Quality Management System is made
up of the following elements:
Process Approach Training Curriculum
The formalization and continual review of organizational Training is an essential part of our Quality Policy. A formal
processes, procedures, work instructions and methods training curriculum has been developed for new analysts.
are crucial for supporting the Quality Policy, collecting In addition, regular training is provided to analysts to
feedback and monitoring overall quality assurance. ensure they remain up to date on methodology
requirements and evolving sustainability standards.

Quality Check Forms

Scientific Committee
Quality Check Forms are issued at each stage of the
assessment process and are used to identify quality The assessment process and scoring methodology are
issues, define training and decide on internal corrective regularly reviewed by an external committee composed
actions. of international sustainability and sustainable
procurement experts. The members of the Scientific
Committee are publicly disclosed on our website.
Continuous Improvement Process
The Methodology Committee meets on a quarterly basis Traceability & Confidentiality
to review and update the assessment methodology to
reflect best practices and the latest sustainability Our IT system not only enables rigorous traceability of the
standards. process but also keeps data and information provided by
rated companies strictly confidential. No information is
shared without agreement from the rated company.

16 18
Moving Forward
Executives around the world are increasingly integrating sustainability into the selection
and management of their portfolios and trading partners. This practice will be
accelerated by regional and global regulations aimed at verifying whether organizations
have robust due diligence in place to tackle sustainability issues throughout their
operations, value chains and portfolios.
The need for a simple, reliable and global sustainability rating service is becoming
critical, and EcoVadis works continuously to set the market standard for effective
business sustainability ratings. By providing reliable and verified sustainability
assessments, we aim to facilitate the emergence of a global continuous improvement
cycle on sustainability issues.

EcoVadis 7 Principles
Evidence Based
Industry, Location and Size Matter
Diversification of Sources
Technology Is a Must
Assessment by International Sustainability Experts
Traceability and Transparency
Excellence Through Continuous Improvement

17 18
 How EcoVadis Helps: From Risk Mitigation
to Performance & Impact
EcoVadis provides sustainability ratings and intelligence used in global value chains, finance and commerce, offering detailed
insights into environmental, social and ethical risks across more than 200 industry categories and 160 countries. The EcoVadis
Intelligence Suite covers:

Risk Mapping Sustainability Ratings Engagement Service, Support

and Monitoring and Improvement Tools and Community
EcoVadis IQ maps your
entire supply base or your EcoVadis Ratings engage Detailed scorecards provide Enterprise offerings include
entire trading partner companies in benchmarking feedback and guidance for program management
landscape for inherent risk and monitoring, to mitigate improvements. The Carbon support — change
and identifies additional due risk and improve their Action Module engages management, journey
diligence needs. sustainability performance. deeper on measuring, mapping, global
A robust methodology reporting and reducing GHG deployment, supplier/rated
covering 21 criteria and a emissions. The Corrective company onboarding,
360° Watch that scans Action Plan enables dashboarding and reporting
external inputs (e.g. trade collaboration between etc. — and training options
unions, NGOs, watchlists, purchasers and suppliers, for requesting (buyers,
news, etc.) yield reliable investors and portfolio investors, lenders)
ratings on a 0-to-100 scale companies, or lenders and companies and for rated
that integrate easily into borrowers, to prioritize companies.
procurement or investment improvements. An e learning
strategy, and other business academy provides
decisions. selfguided courses to help
build knowledge.

Copyright: No part of this document may be reproduced, modified or distributed in any form or manner without prior written permission of EcoVadis.
No warranty: This document is intended for informational purposes only, and EcoVadis does not warrant the accuracy, reliability, completeness of the information, content, text, and graphics herein, and is subject to changewithout notice.
Limitation of liability: In no event shall EcoVadis or its subsidiary companies be liable for any direct, indirect, special, incidental or consequential damages arising out of the use of any opinion or information expressly or implicitly contained
in this publication.

Copyright © 2022 EcoVadis SAS (Paris, France) All Rights Reserved

18 18