EcoVadis Report: Reshaping Supply Chains for Growth

EcoVadis, a premier provider of business sustainability ratings, has unveiled its 2024 Sustainable Procurement Barometer report.

Developed in collaboration with Accenture, the Barometer sheds light on the latent power of procurement to enhance business value via sustainable supply chain initiatives, becoming a pivotal force for organisational resilience and growth amidst dynamic global shifts.

Key findings and challenges

Following the pandemic and amid growing business risks like climate change and regulatory shifts, sustainability has become pivotal in reshaping procurement. A recent Accenture and United Nations Global Compact study highlights CEOs' focus on supply chain social impacts, with 54% prioritising visibility and 33% incentivising ESG outcomes.

However, EcoVadis' Barometer reveals that many companies are in early stages of integrating sustainability into procurement, with limited visibility into supplier tiers and insufficient engagement in sustainability assessments. Only a fraction have digitally integrated ESG into procurement processes.

For instance, the study reveals that just around half of companies possess visibility into more than 50% of their Tier-1 suppliers, with even fewer for lower tiers.

Supplier engagement practices lack depth, as fewer than half of programmes involve suppliers in sustainability assessments. Moreover, merely 6% to 25% of companies have ESG digitally integrated into their procurement processes.

“Business is at a pivotal juncture where leaders are recognising sustainable procurement’s strategic role for long-term business resilience and growth,” says Pierre-Francois Thaler, Co-Founder and Co-CEO of EcoVadis.

“While many companies are adjusting to this change, the most advanced programmes are continuously tuning strategies and investments to accelerate the transformation needed to thrive in a new era of business that also benefits people and the planet."

Strategies for sustainable growth

Through an analysis of the top 10% of high-performing programmes, coined 'leaders', the Barometer reveals five strategies to empower organisations in reshaping their procurement programmes into pivotal drivers of sustainable growth and innovation throughout their business.

• Deepen supplier engagement to hasten the uptake of sustainable practices, including corrective action plans and carbon reduction, fostering ESG improvement and data enrichment
• Embed supplier sustainability data into end-to-end procurement strategy. Programmes with robust integration are significantly more likely to engage with C-suite stakeholders at a strategic level
• Enhance ESG technology and digital foundations to convert data into actionable insights, driving more impactful sustainability initiatives
• Leverage new tools for increased visibility across N-tier suppliers. Risk mapping aids in prioritising decarbonisation efforts and identifying risks, guiding engagement strategies and investments in responsible sourcing
• Engaging internal and C-suite stakeholders with sustainable procurement data is critical to realising benefits and supporting programme expansion. Between 72% and 93% of leaders can strategically engage or operationally inform critical business functions, such as CFO/finance, sales, product design, operations, risk and compliance, with their supplier ESG data and insights, nearly double the rest of the sample.​​​​​​​

How sustainability can help the bottom line

“Financial success and sustainability aren’t mutually exclusive,” adds Matias Pollmann-Larsen, Accenture’s global lead for sustainable value chain.

“Embedding sustainability practices with procurement can be an engine for broader enterprise value creation, reducing cost and improving brand reputation and stakeholder relationships.

“Aligning procurement with broader ESG goals makes supply chains not just more compliant but also more agile and resilient overall.”

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