Ecovadis--How Green is Your Supply Chain?

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With thanks to VentureBeat for finding them and writing an excellent article on them....

Start up Ecovadis provides companies with a software platform that lets them weigh the environmental and humanitarian impacts of their supply chains — even those that circle the globe. Essentially, it scores suppliers based on sustainability and social responsibility criteria, helping their clients make more informed decisions, the company says.

What makes Ecovadis’ platform unique is its collaborative features. When companies are determining how to best create reliable and efficient supply chains, they gather input from their procurement departments (obviously), but also their engineering and design divisions to better understand what is necessary and why. Ecovadis takes this team approach into account, allowing for direct and continuous communication between engineering and procurement personnel so that the overarching company can optimize its transactions while still acting sustainably. This collaboration also includes the suppliers themselves, so that they can hold open dialogue with customer companies on how they can make their processes more sustainable. For example, a company could suggest that a particular vendor use less packaging, or more recycled material.

Ecovadis specializes in suppliers in four categories: retail, automotive, IT and pharmaceuticals. Each of these areas comes with its own set of environmental and humanitarian concerns. The company says its platform is intended to highlight labor issues, as well as environmental or conservation problems. So, for example, in the retail sector, supplier scorecards take a hard look at child labor risks. For IT, they examine energy efficiency and recycling capabilities, etc.

By highlighting these problems early on, ideally before a company’s supply chain has been finalized, Ecovadis spares its customers risks, in terms of finances and reputation. Just think of the number of companies that have taken a public hit due to poor overseas labor practices. Also, with the federal government looking to institute more stringent energy and carbon reporting standards, more companies are scrambling for services like Ecovadis’ so that they can answer for their suppliers’ emissions and activities. The start up even suggests that its platform could lure the growing number of investors looking for sustainable portfolio companies.

Ecovadis rates suppliers across 150 categories, including batteries, plastic packaging, labels, freight transfer, waste management, temporary labor, office furniture — and the list goes on. For each of these service providers, it looks at labor relations, health and safety compliance, potential discrimination, corruption, anti-competitive practices and truth in marketing — in addition to its environmental analysis.