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WBCSD-NA and EcoVadis podcast to Q&A

Type: Podcast

Here is a Q&A from Bill's recent podcast with Pierre-Francois Thaler, co-CEO of EcoVadis, a member of WBCSD, who discussed climate change, EcoVadis’s new Carbon Action Module, and why climate action lies in Scope 3 emissions. Enjoy!

Bill Sisson: What is EcoVadis, and what is its mission?

Pierre-Francois Thaler: EcoVadis is the world’s most trusted provider of business sustainability ratings, intelligence and collaborative performance improvement tools for global supply chains. We empower procurement teams with sustainability intelligence such as: scalable risk mapping and predictive profiles; actionable, easy-to-use ratings; and scorecards with detailed insight into environmental, social and ethical risks. Our methodology covers 7 management system indicators, and 21 sustainability criteria in four themes: Environment, Labor & Human Rights, Ethics and Sustainable Procurement. And, we’ve just announced our vision to extend this platform with the Carbon Action Module, an enhanced set of tools focused on driving reductions in GHG emissions in the supply chain.

Bill: Last month, EcoVadis announced it would participate in WBCSD’s SOS 1.5 initiative, which is an initiative to help companies reach Net Zero before 2050. What is EcoVadis’ role in this initiative, and what do you hope to achieve?

Pierre-Francois: EcoVadis’ goals and work align so well with WBCSD’s mission. We already have engaged customers in plans and roadmaps to achieve the SOS 1.5 initiatives, and in doing so, realized many things:

  • Companies cannot achieve the reductions needed to reach a Net Zero world without including their value chains – this includes tier-1 and small and medium sized (SME) suppliers.
  • Millions of suppliers (across all tiers) represent the greatest opportunity to reduce emissions. Value chain emissions, upstream and downstream, account for more than 70% of total emissions for manufacturers and up to 80% for consumer-goods organizations.
  • Last year’s EcoVadis Business Sustainability Risk and Performance Index revealed a massive shortfall in supplier carbon reporting and action.

Thus, about a year ago, we launched the effort to build the Carbon Action Module. An essential step in developing new solutions and tech is to engage practitioners early on and all along the path.

Bill: Driving down emissions in a company’s supply chain is a little bit like the Wild West—how will EcoVadis work with a company to assess their Scope 3 emissions inside their supply chain?

Pierre-Francois: This is definitely wild territory, but now that we have a new “Climate Sheriff” in the U.S. (President Biden) to back us up, companies may have a better chance at taming it! Our Carbon Action Module is designed to address those “wild” challenges. It goes beyond predictive models to scale up primary data collection; effectively prioritize who to engage first, second, next (and with what approach); and empower suppliers with tools and capacity building to succeed.

Bill: How far into a company’s supply chain will EcoVadis collect emissions data?

Pierre-Francois: We collect from Tier-1 to Tier-N. After ensuring suppliers have the tools to engage and begin reporting on Scope 1 and 2 emissions, the next step in the process is to estimate their scope 3 emissions - starting with predictive models. In the future, those Rated suppliers can extend the same assessment requests to their suppliers to reach deeper tiers. This will only improve with time and collaboration. We are already seeing it now with the “Rate My Trading Partner” feature in our EcoVadis ratings offer. This feature enables “Multi-tier” assessments by allowing suppliers to invite their suppliers to be rated. Stay tuned… we will have more news on this later in the year!

Bill: For small to mid-sized suppliers, what are the opportunities today for them to reduce their emissions?

Pierre-Francois: A key element of our rating methodology for small and medium-sized (SMEs) suppliers is to adapt the inquiry to the supplier’s profile, including size, industry, and geography. So essentially, we adapt to fit the needs of SMEs, not the other way around. Additionally, our process is a journey. One score or rating is only a starting point. The goal is to improve over time.

Although our EcoVadis Index shows only < 20% of SME suppliers are reporting on GHG emissions, our Impact report goes deeper to show there are already actions being taken by companies in the supply chain on Carbon reduction. Here are a few example indicators:

Bill:  Practically speaking, what is the process for small to mid-sized suppliers, and what are they asked to provide when assessing their emissions?

Pierre-Francois: In short: Transparency and engagement in a continuous improvement journey. For buyers, the first step to developing a successful supply chain engagement strategy is identifying and prioritizing the suppliers to engage, and what approach to take. This means first assessing and understanding their “maturity” via a Rating/Assessment of Management Systems for these key criteria, including emissions.

Bill:  We also saw significant shocks to a company’s supply chain from COVID over the past year. How are your customers using the EcoVadis platform to better understand and address vulnerabilities and build resilience in their supply base?

Pierre-Francois: Indeed, COVID-19 is showing us the essential role that sustainability performance plays in supply chain preparedness and resilience. Our methodology covers a rich set of criteria covering the underlying sustainability practices of those suppliers. Our customers need to drill into their portfolios of scorecards to uncover insights on specific vulnerabilities. So, in response to COVID-19, we developed a series of “KPI bundles” which include guidelines on extracting health and safety data as it relates to crises preparedness, labor practices and working conditions, anti-discrimination criteria, and climate and Carbon/GHG emissions.

Please listen to the full podcast episode here. It can also be found on Apple Podcasts, Google Play, and Spotify. 

Bill Sisson is executive director, North America, World Business Council for Sustainable Development, New York City.

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