EcoVadis Finds 80% of Tier 1 Suppliers Can't Track Supply Chain Risk

Most large suppliers are making measurable gains on climate and human rights inside their own operations, but that progress collapses the moment it has to extend to the businesses one tier below them. That is the central finding of the tenth EcoVadis Sustainability Ratings Index, which reports that four in five companies it rates have no documented process for identifying or managing sustainability risks within their own supply chains. The result exposes a structural gap in corporate sustainability: firms are spending on their own performance but cannot yet see, let alone manage, what happens deeper down the chains they depend on.

 

The Progress Is Real, but Shallow

 

Inside their own walls, rated suppliers are moving in the right direction. Climate has become a genuine focus, with 46 percent of companies purchasing or generating renewable energy and 38 percent running climate training for staff, and environmental scores posted the largest gain of any theme, rising 9.6 points on average over four years. The share of companies reaching the top Advanced+ tier more than doubled, from 17 percent in 2021 to 38 percent in 2025. On labour and human rights, the strongest-performing theme, most rated firms now have formal diversity and health-and-safety policies in place.

The problem is depth, not effort. Seventy-three percent of rated companies have no reporting of upstream Scope 3 emissions and 77 percent have no downstream tracking, meaning the majority cannot account for the emissions embedded in their supply chains at all. On human rights the visibility is thinner still: only 2 percent operate an external grievance mechanism that workers deeper in the chain could actually use to flag violations. So while a supplier may run a credible programme for its own operations, that discipline rarely cascades to the next tier, which is where much of the real environmental and social risk sits.

 

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The AI Tools Have Run Ahead of the Data

 

A second gap is emerging as buyers reach for technology to solve the visibility problem. Drawing on the companion EcoVadis Barometer, the index reports that 68 percent of corporate buyers have deployed AI tools in their sustainable procurement programmes, with carbon data validation the most common application. The trouble is that the suppliers those tools are meant to analyse cannot feed them: 30 percent provide no carbon data at all, and a further 26 percent supply only aggregated estimates rather than the granular figures the systems need.

That mismatch reframes where the real bottleneck lies. Chief Rating Officer Sylvain Guyoton argued that better software does not close the gap, because the measurement problem lives in the supply base itself rather than in the analytical tools buyers have built on top of it. The point is a corrective to a common assumption that AI can automate its way past poor supply-chain data. If the underlying information does not exist or cannot be reported in a usable form, sophisticated validation tools have nothing to work with, and the fewer than 1 percent of suppliers reporting decision-grade data up the chain illustrates how far that gap runs.

 

Procurement Still Runs on Paperwork

 

Part of why the data is so thin is that the methods used to verify supplier performance have barely evolved. Verification remains concentrated on documentation rather than inspection: 42 percent of companies still rely on unverified supplier questionnaires, and just 46 percent require suppliers to sign a sustainability code of conduct. Only 20 percent conduct on-site audits, a figure that has scarcely moved in four years.

That reliance on self-reported paperwork is a weak foundation for the kind of granular, verified data that AI systems and regulators increasingly demand. It also helps explain a striking headline number, that 78 percent of rated companies still have no science-based carbon reduction targets, despite the broad uptake of renewable energy and training. Activity is not the same as accountability, and much of the current effort produces documents rather than the measured, auditable performance that closing the supply-chain gap would require.

 

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What Actually Moves the Needle

 

The index does point to a workable path, and it is engagement over time rather than any single tool. Companies with multiple EcoVadis ratings outperform those rated for the first time by 12 points on average, 63.2 against 51.5, across sizes and sectors. That gap suggests that sustained assessment, scored performance and documented follow-through steadily lift both practices and reporting quality, turning a one-off compliance snapshot into genuine improvement.

The implication for buyers is that treating supplier sustainability as an ongoing relationship, rather than a one-time box-ticking exercise, is what closes the distance between what a company intends and what it can actually verify. As mandatory Scope 3 and supply-chain due-diligence rules tighten across major markets, the firms that have built that measurement capability into their supply base will be far better placed than those still relying on questionnaires. Whether the wider market shifts from paperwork to sustained engagement, and whether suppliers gain the capability to report data their buyers can use, will determine how quickly the deeper tiers of global supply chains catch up with the progress already visible at the top.

 

Source: EcoVadis