Despite overall sustainability performance remaining mostly steady, EcoVadis’ latest CSR Risk and Performance Index shows significant differences between regions and industries.
Recently, we at EcoVadis released our third edition of the Global CSR Risk and Performance Index report, filled with data from 40,000 assessments of more than 30,000 companies. It provides the widest coverage of evidence-backed business sustainability ratings in the world; and offers comprehensive snapshots of nine sectors, plus performance comparisons by region and company size. The scores range from 0-100, where a score less than 25 represents high risk, 25-44 represents medium risk, 45+ is considered engaged, and 65+ is considered advance to outstanding.
Despite overall sustainability performance remaining mostly steady, the report shows significant differences between regions and industries.
How regions are performing
The world average CSR score is 41.3 for large companies, and 42.1 for small and medium-sized companies. European companies, of all sizes, lead the way with scores above these averages. Europe’s score has steadily improved over the last three years, giving them a 10-point lead over Greater China, North America, Latin America and the Caribbean, and AMEA (Africa, Middle East and Asia, excluding Greater China). The results are even more impressive for large European companies: they are the first group ever to achieve an overall average score that exceeds 50.
On the other end of the spectrum is Greater China. The region’s large companies received an average of 33.6 — an improvement from last year, but still not enough. Chinese authorities continue to intensify environmental inspections, but the region still lags behind the rest of the world — especially when it comes to labor and human rights standards.
Companies in North and South America maintain consistent scores around 40, which suggests advanced sustainability practices are not strictly correlated with countries’ development levels or risk factors.
A breakdown of sectors: Manufacturing, Food and Beverage lead the way
Before examining CSR performance among sectors, it’s important to note that large, small and medium-sized companies perform very differently between industries. For large companies, the Heavy and Advanced Manufacturing sectors achieve the best scores (44.9 and 45.2). Manufacturers tend to address sustainability topics more actively than, for example, companies in service-related industries.
The Food and Beverage sector leads the way (45.7) for small and medium-sized companies. Large Food and Beverage companies saw a significant improvement over last year; and for the first time, surpassed global average scores to reach what can be considered a reasonably mature performance. With industry-wide pressure to comply with strict regulations, such as ISO 22000, we expect to see continuous improvements in the sector.
At the lower end of the spectrum, large companies in the Wholesale, Services and Professionals division underperformed for three straight years. Wholesale plays a crucial role in sustainable supply chain management; but the concerned actors oftentimes neglect sustainability issues, given they are not directly involved in manufacturing processes. Also, at the lower end, and somewhat surprisingly, small and medium-sized ICT companies performed particularly poorly, significantly lagging behind their larger counterparts. This shows that large businesses have been able to benefit from the organizational and financial leverage that smaller companies don’t have.
Looking ahead in CSR
Wherever your industry and company fall, the good news is that improvement is always possible. 81 percent of small and medium-sized companies and 75 percent of large companies that have been assessed at least twice by EcoVadis maintained or improved their performance in their latest assessment.
Now’s the time to plan for next year’s CSR improvements. Learn from the trends, strengths and weaknesses of years passed in the 2019 Index, and check out the Index Online — our web-based tool that includes additional insight on particular sectors and geographic areas.
Want to know how your organization or suppliers compares? Contact EcoVadis to get assessed today.