EcoVadis: group- or entity-level assessment?

When an organization is considering launching into an EcoVadis assessment, several parameters must be taken into account to find out what is the best approach between a group or an entity evaluation.

In this article, our EcoVadis experts share with you the keys to identify which approach is best suited to your business

‍

EcoVadis group or entity assessment: the parameters to take into account

The expectations of your Stakeholders

The expectations of your stakeholders, whether customers or investors, is one of the key parameters to take into account when choosing an evaluation.

If your stakeholders expect detailed and specific information for each entity, an evaluation by entities may be more appropriate.

Conversely, if an overview of the group is sufficient, a group assessment may be considered.

The nature of your Activities

If the activities of the entities in your group are very different, it can be difficult to draw meaningful conclusions from a group assessment.

For example, an entity in the textile sector will have sustainability challenges that are very different from those of an entity in the service sector.

In this case, evaluations by individual entities will provide a better understanding of specific performances and the identification of specific areas for improvement.

Attention, conglomerates cannot pass the assessment as a group.

Sustainability Maturity

If your organization already has a well-established sustainability strategy, a group assessment may be easier to manage.

On the other hand, if you are in the early stages of your CSR approach, we recommend that you start with an assessment at the entity level to obtain a more detailed analysis.

Available Resources

The resources you have (staff, time) and how they are distributed across the organization help you choose which approach to take.

If you have dedicated resources at the group level that can coordinate the assessment, a group assessment may be more effective.

Conversely, without a coordinator, the group assessment may lack consistency and you may be disappointed with your EcoVadis score.

‍

The Advantages and Disadvantages of an EcoVadis Group Assessment

The benefits of an EcoVadis assessment at the group level

Less expensive: A large group assessment may be less expensive than several smaller evaluations.

Simplified communication: A single score can be easier to share with partners and can benefit all entities.

Common strategy: Facilitates the definition of a common strategy and the harmonization of practices across the group.

The disadvantages of an EcoVadis assessment at the group level

Less specific: Entity performance can be diluted in the group average, making areas for improvement less actionable.

More complex: More difficult to achieve for large groups with diversified activities.

Harder score to get: With higher expectations for larger businesses, it can be more difficult to get a good score.

The Advantages and Disadvantages of an EcoVadis Entity Assessment

The benefits of an EcoVadis entity-level assessment

More precision: The assessment is accurate and proposes areas for improvement that are clearly identified for each entity.

More consistency: Easier to carry out with greater consistency in each evaluation, which avoids having data that is not harmonized.

Specific: Assessing a specific entity that is at high environmental or social risk can increase your transparency and make it possible to detect key areas for improvement.

‍

The disadvantages of an EcoVadis evaluation at the entity level

Higher costs: May result in higher costs due to multiple evaluations.

More complicated to communicate: May cause confusion for partners with multiple scores.

Less easy to share: The results cannot be used by other entities in the group that do not carry out the evaluation.

‍

When should you opt for an EcoVadis Group Assessment?

Coherent activities: If the activities are similar across the group.

Group level CSR strategy: If a global sustainability strategy exists or is in development.

Centralized resources: Whether group-level resources can coordinate the assessment.

Overview: If you want to understand the general maturity of your group and facilitate communication with a common score.

‍

When should you opt for EcoVadis Entity Assessments?

Diversified activities: If the entities have very different activities with specific sustainability challenges.

Lack of a group-level strategy: If there is no comprehensive sustainability strategy in place.

Decentralized resources: If the key resources are within the entities.

Specific needs: If entities need their own assessments for specific strategic reasons (high environmental or social risk).

‍

Conclusion

In conclusion, the choice between a group and an entity evaluation depends on the nature of your activities, your sustainability maturity, the expectations of your stakeholders and the resources available.

Each approach has its pros and cons, and it's important to analyze all these factors well to make the right decision.