EcoVadis: 80% of Tier 1 Suppliers Have No Process for Managing Sustainability Risks in Their Own Supply Chains

Ratings Data Highlights Strong Supplier Progress on Climate Action and Human Rights, but Capability Gaps Prevent This From Cascading Deeper Into the Supply Chain

PARIS and NEW YORK, July 1, 2026 /PRNewswire/ -- Companies in tier 1 supply chains are making progress on climate goals and human rights inside their own operations. Move one tier deeper into the supply chain and that progress stalls.

Four out of five (80%) companies rated by EcoVadis have no documented process for identifying or managing sustainability risks within their own supply chains. Seventy-three percent have no Scope 3 upstream emissions reporting and 77% have no downstream tracking. Only 2% have an external grievance mechanism that workers deeper in the supply chain can actually use to flag human rights violations. There is also a transparency bottleneck, with fewer than 1% reporting granular, decision-grade sustainability data to buyer organizations.

These figures come from the 10th edition of the EcoVadis Sustainability Ratings Index, drawn from nearly 200,000 scorecards of the more than 100,000 companies rated globally between 2021 and 2025. The data captures the performance of these – typically tier 1 suppliers within the network of 1,400+ leading multinationals and buyers using the EcoVadis platform. It highlights that, while rated companies are spending on sustainability, they are not yet tracking it through their own supply chain.

Indeed, companies are making real progress on sustainability inside their own operations. Climate is a focus area, with 46% of rated suppliers purchasing or generating renewable energy and 38% running climate training for employees. However, 78% of rated companies have no science-based carbon reduction targets.

Environmental scores saw the largest gain of any theme evaluated, rising 9.6 points on average over four years. The share of companies reaching Advanced+ status (scores of 65 or above on the EcoVadis 0-100 scoring scale) more than doubled from 17% in 2021 to 38% in 2025. Rated companies are performing best on the Labor & Human Rights theme, with an average global score of 59.5. Eighty percent have formal DEI policies and 78% have employee health and safety policies in place.

Procurement practices tell a different story with verification of supplier performance remaining concentrated on paperwork. Forty-two percent of companies still rely on unverified supplier questionnaires, and just 46% require suppliers to sign a sustainability code of conduct. Only 20% conduct on-site audits, a number that has barely moved in four years.

Companies attempting to use AI tools are confronted with a similar data-readiness hurdle. According to the companion EcoVadis Barometer 2026 report, 68% of corporate buyers have deployed AI tools in their sustainable procurement programs, with carbon data validation cited as a top application by 62% of those buyers. However, the supply base is largely unequipped to support these systems: 30% of suppliers provide no carbon data and 26% supply only aggregated estimates.

"Organizations have built sophisticated tools to analyze supplier sustainability data. The suppliers either don't have that data or can't report it in a form the tools can use," said Sylvain Guyoton, Chief Rating Officer at EcoVadis. "Better software does not close that gap. The measurement problem lives in the supply base itself, and closing it requires sustained engagement over time: structured assessment, scored performance, and documented follow-through."

But much of this supplier capability gap can be closed with targeted engagement and a roadmap for improvement. Across sizes and sectors, companies with multiple EcoVadis ratings outperform those rated for the first time by 12 points on average, 63.2 versus 51.5. This means more suppliers improving their sustainability practices and reporting decision-grade data up the chain.

"Companies willing to treat supplier engagement as an ongoing process, rather than a one-time compliance exercise, close the distance between what they intend and what they can actually verify," added Guyoton.

About the EcoVadis Sustainability Ratings Index

The tenth edition of the EcoVadis Sustainability Ratings Index covers anonymized ratings data from companies assessed on the EcoVadis platform during the 2021-2025 calendar years. All scores are reported on the EcoVadis 0-100 scale, evaluating management systems across seven key indicators spanning Environment, Labor & Human Rights, Ethics, and Sustainable Procurement.

For more information and to download the full report, visit ecovadis.com/insights/index-2026. 

ABOUT ECOVADIS

EcoVadis is a purpose-led business embedding sustainability intelligence into decisions across global supply chains. Its ratings, risk, carbon, e-learning, and worker voice solutions equip organizations to understand supplier performance, manage regulatory and operational risk, drive greenhouse gas emissions reductions, and build more resilient value chains. In 2024, EcoVadis acquired Ulula, a specialized worker voice platform, expanding its capabilities for human rights due diligence and direct worker insight. More than 175,000 businesses across 250 industries and 185 countries use EcoVadis, including Johnson & Johnson, L'Oréal, Unilever, Bridgestone, BASF, and JPMorgan.

Learn more at ecovadis.com and LinkedIn.

SOURCE EcoVadis