EcoVadis: Vendor Analysis (Part 1) — Background & Solution Overview

For many industries and regions, corporate social responsibility (CSR) and sustainability are de rigueur. In several cases, there is also legislation to back them up, and there are no signs the resulting regulations are going away anytime soon.

Despite this, may companies pay CSR little more than lip service. There are numerous reasons for this. For one, CSR often has a hard time competing for budget and investments relative to other “hot” projects focused on short-term cost savings. This is a shame, because when CSR is extended to the supply base, it can actually be used to demonstrate not just regulatory/customer compliance but also to tap supplier innovation, lower costs, reduce supply risk and increase brand leverage.

The bigger tactical issue, however, is that extending CSR out to suppliers is simply hard to do cost effectively — especially if you want to do it properly. Getting hundreds (or thousands) of suppliers to adhere to basic contract terms and a vague supplier code of conduct document is one thing, but getting them to comply with more impactful and enforceable clauses for CSR/sustainability is even more challenging. If you’re a buying organization that’s truly concerned with de-risking your supply chain and looking beyond “check the box” compliance, you need to have a way to engage your suppliers in a more compelling way. Suppliers have many demands on their time and investments, too, so offering them something more than an edict is necessary.

But perhaps the most vexing question begins with measuring success. When you get down to it, how do you even define sustainability and responsibility? How do you measure it? And how do you know whether your performance against those measurements is good or bad for your industry or overall, especially when core requirements for CSR and sustainability differ across dozens of industries and hundreds of categories?

It takes expertise, and not just software. EcoVadis knows this, and that's why it has more than 150 CSR experts on staff to evaluate supplier profiles, documents and third-party audits to objectively gauge the corporate social responsibility of a company against a benchmarked numeric scale. It integrates this expertise into a unique combination of automated supplier surveys, certifications (gathering, analysis, validation, and publishing), benchmarking and training across 21 major CSR factors (with potentially hundreds of atomic level questions) derived from a combination of major global CSR standards — and augmented by best practice. It’s pretty cool when you see it in action.

In this Spend Matters PRO analysis, we’ll dive into EcoVadis’ company background, its solution offering and some recommendations on how the firm is best used to maximize value. Part 2 of this analysis will focus on strengths, weaknesses and production selection guidance. Part 3 will then wrap up with SWOT Analysis, competitive analysis, shortlist guidance and final commentary and recommendations.