EcoVadis and Coupa: Streamlining Supplier Sustainability in Supply Chain Management
Today's post is written by guest author David McClintock. At EcoVadis, David leads content, communications, and data thought leadership to inspire and galvanize sustainable business action and impact worldwide. EcoVadis is a certified CoupaLink Technology Partner that provides supply chain sustainability ratings, benchmarks, and scorecards to organizations of all sizes. EcoVadis enables Coupa customers to drive strategic purchasing and supplier relationship management decisions.
Sustainable supply chain management is now a critical concern in supplier partnerships as customers look beyond products and services to the processes and value chains that support their production.
Recent research underpins this shift: According to research firm Deloitte, 65% of consumers now expect companies to improve business supply chain sustainability, while a study published in Cleaner Logistics and Supply Chain (Volume 3, March 2022) found that green products had an "incremental additive effect" — customers were willing to pay more for partially or entirely green products.
The challenge for companies? Developing a sustainable supply chain. With EcoVadis and Coupa, businesses can streamline supplier management through comprehensive sustainability ratings. Here's how.
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Exploring the EcoVadis framework
While some providers see sustainable supply chain management as a risk and compliance exercise, EcoVadis views it as an opportunity. Using an in-depth, 100-point scale that provides benchmarks across four themes, EcoVadis is able to create a comprehensive and current view of supplier sustainability practices through a detailed scorecard.
The methodology covers 21 criteria in four sustainability themes:
- Environment: EcoVadis assesses components such as carbon emissions and reduction practices along with biodiversity.
- Ethics: Ethics speaks to supplier efforts around reducing corruption and ensuring consistent business practices.
- Labor and human rights: Analysis of workforce management, fair pay, and workplace conditions provide labor and human rights data.
- Sustainable procurement: EcoVadis asks suppliers about their own supplier sustainability processes. Are they asking their material and product providers for confirmation of sustainable supply chain management practices?
Validating supplier data
To ensure sustainability data is accurate and complete, EcoVadis ratings leverage three key sources: the supplier itself, sanctions and watchlists, and news sources.
Obtaining data from the supplier directly starts with a custom-built survey that speaks to each supplier’s business. Along with answers to sustainability questions, suppliers are also asked to provide documentary proof such as labor and environmental policies, relevant ecolabels and ISO certifications, or reporting/record keeping which confirms that ESG claims are accurate and current.
Next, a 360 Watch of external inputs is cross-compared to determine if suppliers have been engaged in any activity that could positively or negatively impact their overall sustainability score. Sources include data providers such as Regulatory Data Corp, which monitors current PEP, sanctions, and watchlists. Other lists include OFAC, Inter-American Development Bank, and World Bank Sanction lists. Finally, a scan of all current news sources is conducted.
Once this process is complete, the supplier sustainability rating and scorecard are created. Companies looking to work with the supplier can access and compare scores to benchmarks and identify potential opportunities. Suppliers receive a scorecard they can use to pinpoint improvement areas which can be shared with other potential partners.
Bringing these insights directly into the tools procurement organizations use daily is essential as they look beyond price, quality, and on-time delivery when buying. They’re also vital for initiating and sustaining long-term supplier relationships.
As the need for sustainability insights grows, many suppliers have been onboarded to the EcoVadis network. Coupa customers can also request that a supplier be added — and EcoVadis manages the onboarding campaign with a survey process adapted to each supplier’s purchasing category, size, and location.
Customizing sustainability requests with Coupa
Within Coupa, customers have a tailored interface that allows them to directly request supplier ratings. With 90% of the workflow completed in Coupa, complexity is reduced and speed is increased, making it easier for companies to get the supply chain sustainability data they need when they need it.
Integration with EcoVadis also gives organizations the ability to enable sustainability scores within Coupa's supplier health score to better assess calibrated risk.
This health score includes an overall financial score, judicial score, new sentiment score, status on screening lists, and the EcoVadis score out of 100. Taken in aggregate, this provides a solid starting point for companies looking to partner with new suppliers or evaluate current partnerships.
At scale, EcoVadis and Coupa make it possible for companies to leverage CSR efforts as an opportunity rather than a barrier to growth. Consider the increasing consumer interest in CSR initiatives. This may seem like an obstacle at first, because if companies can't develop and improve their supply chain sustainability, they could lose revenue and suffer reputation damage. Improved sustainability creates an opportunity for increased sales and elevated margins. As noted above, consumers are willing to pay more for goods that are sustainability produced. They're also more likely to remain brand-loyal if companies continue to prioritize CSR initiatives, creating a sustainable customer base.
The future of sustainability management
With sustainability ratings for 100,000 companies across 175 countries and over 200 industries, EcoVadis is the world's only universal sustainability ratings provider. They are committed to ensuring that organizations have the data they need to make smart supply chain decisions.
From full-featured Coupa integration that delivers bidirectional sustainability data to the rollout of new carbon action and greenhouse gas (GHG) emission models within the platform, EcoVadis is devoted to helping companies create a future more grounded in supply chain sustainability.
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