#1—In this issue...
EthoWork Consulting, LLC
We help companies to implement environmental, social, and ethical practices in their supply chains.
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Navigating the Financial Storm: Understanding the Economic Impact of Climate Change?
A recent study from Maximilian Kotz et al., published by Nature Portfolio showcases how climate change will economically impact the world. By 2049, global income could see a reduction of 19% due to climate-related factors, even if current emissions levels do not increase. This forecast, based on data from over 1,600 regions worldwide over the past 40 years, starkly illustrates the dire financial consequences of both action and inaction. It's clear that the costs of climate mitigation are significantly outweighed by the damages we face if current practices persist. Now is the time for policymakers, businesses, and individuals to unite in forging sustainable solutions that address these urgent financial realities.?
The EcoVadis Assessment: A Crucial Step for Small and Medium-Size Enterprises (SMEs)?
EcoVadis’ Sustainability Rating?
Sustainability is no longer a buzzword, but a business imperative, especially for SMEs. With the increasing scrutiny of corporate responsibility, SMEs are under growing pressure to demonstrate their commitment to sustainable practices. The EcoVadis sustainability assessment emerges as a pivotal tool in this scenario, providing a detailed evaluation of companies' environmental performance and social responsibility. The need for verifiable sustainability credentials has intensified as regulatory mandates tighten and consumer preferences shift towards more ethical brands. Read more about supply chain sustainability regulations and compliance at EcoVadis’ website. SMEs, often pivotal links in global supply chains, are discovering that sustainability is good ethics and business. By integrating EcoVadis assessments into their operational strategy, SMEs align themselves with the larger market trends favoring sustainability.?
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What is the EcoVadis Assessment??
The EcoVadis assessment is robust, covering a wide spectrum of critical criteria for a company’s sustainability standards. These include environmental impact, labor and human rights, ethics, and sustainable procurement practices. This breadth ensures that all facets of a company’s operations are scrutinized for sustainable practices. Upon completion of the assessment, companies receive a score that translates into one of the four distinct medal levels: bronze, silver, gold, or platinum. This scoring system not only benchmarks a company’s performance against universal sustainability standards but also against industry peers, providing a clear target for improvement and excellence in sustainability efforts. The company was founded in Paris in 2007 with a mission to:?
“Provide reliable, globally recognized sustainability ratings and insights, enabling all companies to reduce risk, drive improvement, and accelerate positive impact on our planet and society.”?
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Why Complete the EcoVadis Assessment??
Regulatory and Market Drivers?
The landscape of global business is rapidly evolving with an increasing number of due diligence laws coming into effect, such as the European Union’s Corporate Sustainability Due Diligence Directive (CSDDD), which has recently seen significant developments that will impact suppliers up and down the supply chain. Read more in this article from the Council of the European Commission. Another—the Corporate Sustainability Reporting Directive (CSRD)—will require SMEs to report on sustainability matters starting with the financial year 2024, for reports to be published in 2025. Read more in this article from the European Commission. The European Green Deal is a set of policy initiatives to make Europe climate neutral by 2050. Read more about the regulations emerging from this initiative in this article from Makersite.?
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Such regulations mandate companies to be more transparent about their operations, pushing SMEs to adopt standardized assessments like EcoVadis. Additionally, there is a palpable shift in investor expectations, with many now factoring sustainability into their investment decisions. Consumers, too, are more informed and prefer to patronize brands that demonstrate responsibility towards people and the planet. This changing economic environment makes EcoVadis a tool for compliance and a strategic asset in building long-term business resilience and tapping into new market potentials.?
Consumer Pressures?
In their Global Trends Report 2023, Ipsos found that 64% of consumers are willing to pay more for responsibly-produced products. In 2024, consumers are “Greenwashed Out” and just want organizations to step up and show proof of their eco pledges, according to Global Consumer Trends reporting from Euromonitor International.?
Greenwashing Risks?
According to this article from Fast Company, 68% of executives believe their company is guilty of greenwashing. 2,000+ climate-related lawsuits have been filed to date globally.?
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The EcoVadis Assessment Process?
Most often, a larger entity asks an SME to complete the EcoVadis Assessment. The SME receives an email notification with information about the “reporting company” (i.e., who is asking them to complete the assessment), EcoVadis, and the assessment.?
Then, the SME will register itself on the EcoVadis registration page. This kicks off the assessment process.? First, you’ll be expected to share information about your company name, size, location(s), and industry. From this information, EcoVadis will create a customized questionnaire and the price for your assessment.?
Once your submission has been received and processed, you’ll be notified and can begin completing your customized questionnaire and uploading your supporting documentation across the 21 question areas and the four themes of environmental impact, labor and human rights, ethics, and sustainable procurement practices. EcoVadis allows a company three weeks to complete the questionnaire, with one extension request. You’ll then choose a subscription plan and submit your payment to EcoVadis to submit your questionnaire.?
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What is the Investment??
Assessment Cost: While the EcoVadis assessment represents a significant return on investment, there is an ongoing annual cost based on the size of the company, the plan chosen, and the term. Below are the published costs for US companies at the time of posting. For the latest information, go to EcoVadis’ Plans and Pricing.?
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What is the Time Commitment for Completing the EcoVadis Assessment??
Typically, the assessment process spans between a few weeks and three months. This involves a period of rigorous preparation by the company—gathering and verifying data—followed by a 3-week window granted by EcoVadis to complete the questionnaire, then up to 8 weeks for EcoVadis to conduct their evaluation and issue the scorecard and medal. The sample below from the questionnaire shows how thorough EcoVadis’ process is. It ensures a comprehensive evaluation of the company's sustainability practices.?
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This Questionnaire is IN-DEPTH and LONG! Who Can Help Me Complete It??
An EcoVadis Training Partner is a third-party company that plays a crucial role in helping businesses understand and improve their sustainability performance in preparation for the EcoVadis assessment. After all, a company's rating from EcoVadis will be in place for an entire year before the assessment can be retaken. EcoVadis endorses two types of training partnerships: Strategic and Approved. Strategic Training Partners collaborate closely with EcoVadis on advanced training and methodology development, catering to companies needing customized sustainability solutions. These partners are ideal for larger or more specialized firms, though they come at a higher cost. On the other hand, Approved Training Partners deliver standardized training across various regions, making it more accessible and cost-effective for SMEs starting their sustainability journey. This distinction helps SMEs choose the right training partner based on their specific needs and budget constraints, ensuring they receive the appropriate level of support for their sustainability efforts. ?
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EthoWork is an EcoVadis Approved Training Partner. Contact EthoWork?
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An Approved Training Partner can also guide you in practical matters. For example, according to EcoVadis, the top five most asked questions by companies about their assessment are:?
Costs for engaging an EcoVadis Approved or Strategic Training Partner vary, depending upon the company's needs. For example, one company may need a few adjustments to their assessment for their next submission. Others may need a Training Partner to guide them through the entire assessment process.?
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Benefits of Completing the EcoVadis Questionnaire?
Effects on Profitability?
Engaging in sustainable practices examined in the EcoVadis assessment can lead to profitability boosts of up to 36%. This increase stems from enhanced operational efficiencies, risk reduction, and a stronger brand reputation, often leading to increased customer loyalty and avenues for new business opportunities. Studies and client testimonials suggest that these assessments encourage companies to innovate and optimize, driving tangible gains in efficiency and market position. Read more in EcoVadis’ whitepaper Return on Sustainability.?
Improving Your Sustainability Management Systems?
Companies who invest their time and money in an EcoVadis assessment gain a valuable opportunity to capitalize on insights and data that are aligned with global frameworks so they can pinpoint performance gaps, benchmark against peers, and outline clear paths for enhancement. The benefit is a structured and recognized approach to mastering sustainable practices that enhance business credibility and operational success. Read more at EcoVadis’ website here.?
Sharing Your Scorecard Publicly or within Your Supplier Network?
By displaying the results of their EcoVadis scorecard, companies demonstrate transparency and commitment to sustainability. This fosters trust and strengthens relationships with stakeholders, ultimately boosting their competitive edge and facilitating access to sustainability-linked opportunities such as Sustainability-Linked Loans (SSLs). Read more about SSLs in this article from Bloomberg.?
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Conclusion?
For SMEs navigating the complexities of modern markets, the EcoVadis assessment offers more than a sustainability score—it provides a pathway for improving business practices, aligning with global standards, and enhancing competitiveness. The strategic benefits, cost-effectiveness, and potential for profitability improvement make the EcoVadis assessment an essential investment for any SME committed to sustainable business growth. In embracing these assessments, SMEs are preparing to meet the current demands but are also gearing up for a sustainable and profitable future.?
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Empowering Change: How Global Consensus Shapes Our Climate’s Future?
A groundbreaking survey involving over 80 countries and nearly 1 million participants highlights an extraordinary global commitment to tackling climate change. With around 90% of respondents supporting active climate policies and 80% willing to personally finance these efforts, the data demonstrates a powerful global consensus on the urgency of environmental action. Such compelling statistics emphasize the critical role of informed voting and civic engagement in driving sustainable policies. Together, we can catalyze significant change, leveraging this widespread support to foster a globally proactive climate stance. Explore the full study by Peter Andre et al. published at Nature Portfolio.?
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EthoWork is an Approved Training Partner for EcoVadis, the world's most trusted sustainability rating company. Contact us today.?