Sustainability Performance Varies Across Industry

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Despite similarities in the movement to achieve sustainability, especially with supply chains, performance in the area varies greatly between industries, a study from EcoVadis shows.

The fifth edition of the Business Sustainability Risk & Performance Index published by the business sustainability ratings provider shows that highly regulated industries such as food manufacturing and electronics demonstrate better sustainability performance and year-over-year improvements while the finance, legal and consulting services do the best jobs in the area. Wholesale services and transportation have the highest room for sustainability growth, according to the report.

The EcoVadis report analyzed nine industries and 46,000 businesses of all sizes across five regions from 2016-2020. Organizations are scored on 21 sustainability issues across four areas, including environment, sustainable procurement, ethics and labor and human rights. Anything scored above 45 is considered a good performance and above 64 is advanced, which no industry as a whole is achieving.

The finance, legal and consulting services scored highest on EcoVadis’ analysis with a 51.0 score. Transportation has the most work to do, with the lowest score of 44.9, which didn’t change much from 2019’s report.

Many of the industries EcoVadis looked at score well and are improving in the environmental areas the study looks at and had an average score of 48.2. On the other hand, sustainable procurement is low across all industries the report analyzed.

That area is the lowest scoring issue in the analysis, dropping for the fifth straight year. EcoVadis says the trend may indicate that companies are unprepared to meet increasing supply chain regulations.

The company says there was growth on supplier assessments, but supply chain risk analysis remains low and fewer than 35% of the companies looked at in the report have policies on sustainable procurement, even as supply chain accountability continues to grow as an industry concern. When the first index was released in 2016 just 24% of companies had supplier assessments in place.

Most of the supply chain data EcoVadis looked at was from first and second tier suppliers and the company included areas of supply chain regulation in its analysis for the first time. The European Parliament has made these supply chain issues a priority and policies are starting to become more common in many regions.

Overall, EcoVadis says North America is gaining on Europe in terms of corporate sustainability. Europe has close to half of the world’s most sustainable publicly listed companies. Although, North America as a region scored 46.5, a new high for the region.

China was the lowest scoring region in the report, and EcoVadis says that is concerning and shows sustainability risks in the country’s supply chains. A recent power crunch in the country shows the vulnerability of supply chains in the region.

The report also found that mid-sized companies outperform small- and large-sized companies in sustainability.