Ecovadis Introduction

Measuring sustainability An introduction to EcovadisMore information: John Rees, Ecovadis Alliances Director T: +44 (0) 207-484-5151 M: +44 (0) 7450-285-800 E: [email protected]

ECOVADIS SUSTAINABILITY RATING AND MONITORING

mailto:[email protected]

mailto:[email protected]

An introduction to Ecovadis

MANAGEMENT SUMMARY Ecovadis delivers accurate, simple and actionable supplier sustainability ratings. Our ratings are used by tens of thousands of organisations across the world for 5 key reasons;

1. EXPERTISE We have proven expertise and more than 140 organisations across industry sectors rely on Ecovadis sustainability ratings.

2. METHODOLOGY Our evidence-based methodology is based on 7 years experience of assessing tens of thousands of suppliers, so it’s proven to work.

3. STANDARDS We incorporate all recognised and emerging global standards from the United Nations, International Labour Organization, International Organization for Standardization (ISO) and others, that affects a supplier’s sustainability and risk.

4. PEOPLE Our team of more than 250 people are highly qualified experts with an in-depth knowledge of sustainability.

5. PLATFORM The Ecovadis platform is a secure cloud-based solution where buyers and suppliers can collaborate to manage risk and drive improvements in trading relationships. It stands alone and can also be integrated with many procurement and ERP systems such as SAP, Ariba and Oracle.

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THE SUSTAINABILITY CHALLENGE With todays’ complex and global supply chains, you are responsible for the actions you and your suppliers take. That’s why selecting the right suppliers and monitoring them against acknowledged sustainability measures (Environmental, Social, Legislative and Supply Chain) is so important.

But just complying isn’t good enough. The leaders go beyond compliance and use ethical business practices to drive innovation and growth.

Of course profit is important, because without it we wouldn’t create the wealth that drives global prosperity. But if you create the right environment and business practices, you can drive even more growth by doing the following;

• Treating people fairly so they are happier and more productive;

• Minimising waste and environmental impact to reduce cost and create new business opportunities;

• Acting ethically to mitigate risk and ensure continuity and security of supply.

Managing this is difficult, expensive and inefficient for buyers and suppliers.

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Suppliers are asked the same questions and audited many times by different buyers. Often these questions are not appropriate, or badly worded. They can be too complex and longer than needed, or too short with ‘yes/no’ answers that provide no real insight into how well the supplier manages sustainability.

The result is that suppliers resist completing questionnaires or do a poor job.

Buyers must develop a process for developing, interpreting and using questionnaires to assess a supplier’s sustainability profile. If they do ask for supporting evidence, they must ensure it’s authenticity and relevance.

They must also keep up to date with anything that has an impact on sustainability, which means consuming multiple data sources to make informed judgements on what they see.

This is time-consuming, expensive and usually managed as a manual or spreadsheet process, so there’s duplication of effort and a high risk of errors.

The challenge for both buyer and supplier is that far too much time is spent answering and understanding questionnaires and audits, and far too little time is spent improving sustainability.

In 2008, EcoVadis combined a unique methodology and expertise with a collaborative software platform to deliver a simple and reliable sustainability rating and monitoring service.

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HOW ECOVADIS WORKS

The Ecovadis service has 3 elements, a robust, evidence-based methodology, experts who use it to create ratings and a collaborative software platform to manage risk and drive improvements across the supply chain.

1.Methodology Our unique methodology provides the framework from which ratings are produced. It incorporates the leading international standards such as Global Reporting Initiative, United Nations Global Compact, ISO 26000 and International Labor Organisation.

These are arranged into 21 key sustainability indicators split across 4 groups - Environmental, Social, Ethical and Supply Chain.

Our dynamic questionnaires are customised for a supplier based on size, geographical location and industry profile. A supplier must answer questions and provide evidence such as documents, reports, certificates and policies.

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2. Expertise Our team of sustainability experts use a robust methodology to analyse questionnaire responses and authenticate supporting evidence. They also evaluate the supplier against data from trade and industry bodies, government and non-governmental organisations, media and specialist data providers.

This produces a Supplier Sustainability Scorecard which shows how the supplier rates against defined Environmental, Social, Ethical and Supply Chain criteria. This is published and available on our software platform.

3. Platform This enables buyer and supplier to collaborate to monitor sustainability performance. The Supplier Scorecard identifies areas of risk and opportunity that can be managed through Corrective Action Plans. These focus attention on actions required to address a problem or drive improvement.

The platform is a single point of access to all questionnaires, data analysis, scoring tools, Corrective Action Plan status and regulatory news. It also has global reach with details of 20,000+ suppliers covering 150 purchasing categories across 140 countries.

And because it easily integrates with other procurement and supply chain systems, the sustainability information is available to other functions throughout the organisation.

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MAKING IT HAPPEN EcoVadis provides services to guide you through the implementation phase.

A dedicated programme manager will work with you to create a personalised project plan. This will define the suppliers you want to evaluate and the steps required to onboard them as efficiently as possible.

The Supplier Engagement team will then get involved. They will communicate with suppliers on your behalf, and help them to register on the platform to complete the questionnaire and provide supporting evidence which is used to create their rating.

Each project goes through the same stages and the ‘typical’ timescale for a project is between 12-14 weeks. The time to complete depends on the number of suppliers to be rated.

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OUR CREDENTIALS

EcoVadis makes sustainability rating and monitoring much more efficient, faster, accurate and less expensive than ever before for buyers and suppliers.

Our intuitive platform enables suppliers to provide information once, and share it many times with different buyers. This not only eliminates questionnaire and audit fatigue, it can also create new business opportunities.

Suppliers can also improve by benchmarking themselves against their peers. This improves performance and promotes best practice which can drive business growth.

EcoVadis has firmly shifted the focus from collecting and analysing data, to driving real and meaningful improvement across the supply chain. The service is trusted by more than 140 global, organisations such as Air-France, Alcatel-Lucent, Axa, Bayer, Centrica, Coca Cola, Heineken, Johnson & Johnson, Nestle, Renault and Vodafone.

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BUSINESS MODEL

Ecovadis is an annual subscription service and fees are based on a sliding scale related to annual revenues. There are 8 bands ranging from under €500 million to more than €60 billion. Fees range from €10,000 to €110,000. The service includes the following;

• Assess an unlimited number of suppliers;

• Have as many users of the Ecovadis service as you choose;

• Dedicated hotline with local language support;

• Complete supplier on-boarding service;

• Data validation;

• Dedicated project manager to co-ordinate project roll-out;

• No additional charge for suppliers already registered on EcoVadis.

Ecovadis also offers additional services such as ERP and Spend Management integration. Fees depend on required workflow and can be quoted after a more detailed review.

Corrective Actions Plans are generated and included as part of the standard service. An optional extra is Corrective Action Plan Monitoring (CAPM) where Ecovadis will monitor and manage CAP’s on a client’s behalf. Fees range from £300 to £175 per supplier per annum.

Supplier subscription There is also an annual subscription for suppliers who are assessed. There are 3 options available;

Basic is the entry level subscription which costs €480.

Premium provides more capabilities for improvement and costs €1200.

Corporate is the highest level and enables suppliers to assess up to 25 of their own suppliers and consolidate data from 25 subsidiaries. The annual fee is €4896.

We always work with suppliers to determine the best level to meet their needs. Full details on this and other aspects of the Ecovadis service are available at www.ecovadis.com.

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http://www.ecovadis.com

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Ecovadis Introduction