EcoVadis 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, 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); finance; legal; and consulting. The index was built using EcoVadis scores, which are based on 21 CSR criteria across four themes — environment, labor practices and human rights, business ethics and sustainable procurement — 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 those scoring below 25 are considered high risk.
In addition to industry divisions, scores were analyzed across five geographic regions and two groups — small and medium sized businesses (SMEs — companies with 26-999 employees) and large organizations (1,000 or more employees). 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. Food and beverage SMEs (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. Food and beverage SMEs (47.7) and large ICT companies (43.3) were the highest performers in this theme.
- Sustainable procurement practices need more attention. Food and beverage SMEs 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. Food and beverage SMEs 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 SMEs, 48.4. In comparison, large North American companies scored 40.8, with SMEs scoring 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. North American SMEs 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,” said Pierre-Francois Thaler, co-CEO of EcoVadis. “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.”
What's the latest in impact investing?
Explore the latest tools, guides, platforms and organizations making it easier than ever for investors to put their money where their values are — at New Metrics '19, Nov. 18-20.
While the overall average score of both size groups were close, the average score of SMEs 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,” Thaler added.
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 their 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 its environmental score.
To view the EcoVadis Index Online, a web-based tool that includes additional data views and graphs for a closer look at industries and geographic areas, please visit index.ecovadis.com.