ESG vs. EcoVadis: What’s the Difference and Why You Should Be Familiar With Both

By David Smith, Garnica North America

In today’s corporate landscape, the convergence of profitability and environmental responsibility is more than a mere trend — it’s a necessity. Concurrently, distinguishing between various frameworks has also become a crucial component of informed decision-making. Two terms in particular that are garnering more attention in recent years are ESG and EcoVadis. But what’s the difference and why are they so important?

Understanding ESG and EcoVadis

ESG is a broad concept encompassing three pillars — Environmental, Social and Governance —which together evaluate a company’s impact on society and the environment. EcoVadis on the other hand is a global platform that specializes in assessing and guiding companies on their journey toward sustainability and equality. It provides a comprehensive evaluation across four key metrics: environment, resources and human rights, sustainable procurement, and ethics. While ESG sets the overall direction, EcoVadis offers a detailed roadmap for implementation. Participating in EcoVadis enables businesses to measure, improve and communicate their sustainability performance effectively. It also allows for a standardized comparison with peers, fostering healthy competition and promoting best practices across industries.

EcoVadis: How it Works

EcoVadis is a global platform that moves beyond conventional ESG assessments offering a nuanced perspective on sustainability management. The EcoVadis score, ranging from 0 to 100, serves as a barometer for a company’s sustainability management efficacy at a given juncture. To receive an EcoVadis assessment, companies must register and then answer a series of questions accompanied by supporting documents. Once submitted, the information is analyzed, and a scorecard is awarded to the company.

EcoVadis Medals and Badges

EcoVadis Medals and Badges recognize businesses that exhibit robust sustainability management systems, emphasizing their dedication to each of the four key assessment metrics (environment, resources and human rights, sustainable procurement, and ethics).

Medals are awarded based on percentile ranks:

• Platinum: Top 1% (99+ percentile).

• Gold: Top 5% (95+ percentile).

• Silver: Top 15% (85+ percentile).

• Bronze: Top 35% (65+ percentile).

A company must meet a minimum score of 30 across the four metrics to be eligible for a medal. The percentile rank, calculated across all industries, offers a standardized comparison, fostering inter-industry best practices.

Badges are designed to recognize companies making commendable strides in sustainability.

• Committed Badge: Minimum score of 45.

• Fast Mover Badge: Score between 34-44, with a minimum 6-point improvement compared to the previous assessment in an 18-month period.

It is important to note that companies working in specific industries may not be eligible for EcoVadis medals or badges. Currently, these include but are not limited to the manufacturing of tobacco products, weapons and ammunition manufacturing, coal or lignite mining, and companies with substantial revenue from coal sources and/or producing a substantial portion of coal-based power generation.

A Call to Business Leaders

For business leaders and entrepreneurs, the integration of ESG principles and engagement with platforms like EcoVadis present multifaceted advantages:

• Enhanced Reputation: A robust ESG framework, coupled with accolades from esteemed platforms, signifies a brand’s commitment to ethical practices, fostering trust among employees, customers and stakeholders.

• Risk Mitigation: Proactive sustainability measures can preempt regulatory challenges and potential environmental liabilities, ensuring long-term viability.

• Competitive Advantage: Embracing sustainability propels innovation and encourages healthy competition as other companies adapt to keep pace, paving the way for differentiated offerings in the market.

As ESG frameworks continue to gain traction, embracing platforms like EcoVadis is not merely a strategic choice, it’s an ethical imperative. As an example, Garnica, a leader in premium sustainable plywood, epitomizes the transformative impact of embedding ESG principles into business operations. Garnering global recognition, Garnica ranks in the top 1% for sustainable procurement and the top 2% for environmental management within the forestry sector, underscoring the tangible benefits of ESG integration. For businesses poised to make a lasting impact, the journey toward sustainability begins with a single, decisive step: a commitment to holistic ESG integration and a relentless pursuit of excellence.

David Smith is the President of Garnica’s North American Division and brings over 28 years of industry expertise to his role. Prior to joining Garnica, he held senior positions at EGGER Group and Arclin USA, later founding The David Smith Group, a consulting firm focused on sustainable building materials. With a proven track record in customercentric solutions, David specializes in dynamic market leadership through sustainable innovation. Learn more about Garnica at www.garnica.com.