Firms 'mostly stagnant' on supply chain sustainability

Will Green is news editor of Supply Management
30 October 2019

Companies around the globe remain “mostly stagnant” on efforts to improve supply chain sustainability, according to research.

EcoVadis’s latest annual Global CSR Risk and Performance Index showed sustainability and risk scores have remained consistent over the past three years, but sustainable procurement remains the lowest-scoring theme.

Pierre-Francois Thaler, co-CEO of EcoVadis, said: “While we’re seeing slight year-on-year improvements across most themes, and many headline-grabbing public promises, this year’s analysis shows companies remain mostly stagnant around supply chain sustainability.

“With most global enterprises spending 50-70% of revenue in the supply chain, it’s the most natural and effective foundation for driving the structural change these commitments are intended to create.”

EcoVadis, which provides business sustainability ratings, evaluated data from 30,000 companies worldwide between 2016 and 2018 across 21 CSR criteria covering four themes: environment, labour practices and human rights, business ethics and sustainable procurement. Scores range from zero to 100, where less than 25 represents high risk, 25-44 medium risk, 45 and above “engaged”, and above 65 “advanced to outstanding”.

Half (50.7%) of firms scored 45 or higher in 2018, compared to 49.2% in 2017 and 50.5% in 2016.

However, 68% of firms still have no measures in place to promote equality and inclusive working environments, with only 32% implementing at least one measure to address discrimination and harassment, such as effective whistleblowing procedures, awareness training and anti-discrimination recruitment tactics.

EcoVadis said results highlighted an urgent need for organisations to engage with supply partners to uncover risks. “When left unmanaged, the deepest tiers of the supply chain can expose organisations, people and society to serious issues, including slavery, forced labor, dangerous working conditions, environmental waste, corruption and more,” the company said.

Thaler said: “There needs to be a conscious effort to improve supply chain visibility, transparency and collaboration – with a focus on risk identification and improvement. Stated more bluntly: enterprises can’t mitigate the risks they don’t see.

“Procurement leaders have immense power to spark change, reduce exposure and move the dial on corporate purpose and responsibility.”

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