Four out of five (80%) companies rated by EcoVadis have no documented process for identifying or managing sustainability risks when it comes to the activities deeper into their supply chains. Seventy-three percent have no Scope 3 upstream emissions reporting and 77% have no downstream tracking. EcoVadis, a provider of business sustainability and ESG (Environmental, Social, and Governance) ratings finds that 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.

“Companies in tier 1 supply chains are making progress on climate goals and human rights inside their own operations,” said the authors of the EcoVadis Sustainability Ratings Index, released July 1. “Move one tier deeper into the supply chain and that progress stalls.”

The Index’s 10th edition, drawn from nearly 200,000 scorecards of the more than 100,000 companies EcoVadis rated globally between 2021 and 2025, highlights the problem that, while rated companies are spending on sustainability, they are not yet tracking it comprehensively through their supply chains.

EcoVadis said that companies are making real progress on sustainability inside their own operations. 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 and 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.

But 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, the report’s authors said.

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. 

“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.