EcoVadis assessment: a group or entity approach?

When an organization is considering embarking on an EcoVadis assessment, several parameters need to be taken into account to determine the best approach between a group or entity assessment.

In this article, our EcoVadis experts share with you the keys to identifying which approach is best suited to your company.

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EcoVadis group or entity assessment: parameters to take into account

Your stakeholders' expectations

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

If your stakeholders expect detailed and specific information for each entity, an entity-by-entity assessment 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 your group's entities are very different, it can be difficult to draw meaningful conclusions from a group valuation. 

For example, an entity in the textile sector will have very different sustainability challenges to one in the service sector.

In this case, evaluations by individual entities will provide a better understanding of specific performance and identify precise areas for improvement.

Please note that conglomerates cannot pass the assessment as a group.

Maturity in Sustainability

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

On the other hand, if you're in the early stages of your CSR approach, we advise you to start with an entity-level assessment to obtain a more detailed analysis.

Available resources

The resources at your disposal (staff, time) and their distribution within the organization help you choose which approach to adopt.

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

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

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Advantages and disadvantages of an EcoVadis Group assessment

The benefits of an EcoVadis assessment at group level

Less costly: One large group assessment can be less costly than several smaller ones.

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 group level

Less specific: the performance of individual entities may be diluted within the group average, making areas for improvement less exploitable.

More complex: more difficult for large groups with diversified activities.

Harder to score: As expectations are higher for larger companies, it can be more difficult to achieve a good score.

Advantages and disadvantages of an EcoVadis assessment by entity

The benefits of an EcoVadis assessment at entity level

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

Greater consistency: Easier to carry out, with greater consistency in each assessment, thus avoiding data that is not harmonized.

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

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Disadvantages of an EcoVadis assessment at entity level

Higher costs: May lead to higher costs due to multiple assessments.

More complicated to communicate: Can be confusing for partners with multiple scores.

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

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When to opt for a Group EcoVadis Assessment?

Consistent activities: If activities are similar across the group.

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

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

Overview: If you want to understand your group's overall maturity and facilitate communication with a common score.

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When to opt for EcoVadis assessments by entity?

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

No group-level strategy: If no global sustainability strategy is in place.

Decentralized resources: If key resources are located within entities.

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

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Conclusion

In conclusion, the choice between group and entity assessment depends on the nature of your business, your sustainability maturity, the expectations of your stakeholders and the resources available .

Each approach has its advantages and disadvantages, and it's important to analyze all these factors carefully to make the right decision.