Under EcoVadis methodology, our assessment scope is specific to the legal entity under assessment and also covers dependent subsidiaries/sites at the national or international level (if any). Subsidiaries/sites in which the rated company has operational control or holds over 50% of shares will be included in the assessment scope. Similarly, the parent company of the rated company that satisfies the above conditions is considered related to the assessment scope as well. Sister company is considered unrelated to the assessment scope due to the independence in operations.
Questionnaire answers and most supporting documents provided are recommended to be as specific to the assessment scope as possible. The sustainability performance of the rated company could be under or overestimated if the evidence is provided solely from your subsidiaries/sites and/or parent company. Therefore, under certain circumstances, policies, actions and results from your subsidiaries/sites and/or parent company might not be fully credited due to uncertainty that the information provided is applicable to the scope of assessment.
Here is a brief summary of how we analyze parent level and subsidiary level information for the following management indicators:
- Evidence coming from your parent company is fully credited, as it is a common practice to have group-wide policies issued by the headquarter and passed down to the subsidiaries, rather than having multiple subsidiaries to develop their own sustainability policies and strategies.
- Evidence solely from your subsidiary can be accepted if it represents a significant portion of the operations of the assessment scope as we need to ensure that the policies are communicated across the Group.
- Measures are specific to the entity being assessed because implementation is unique for each subsidiary or site. Actions taken by your parent company are only credited when there is reasonable assurance that the measures are also applicable to your company. Factors such as industry sector, geographical proximity would be considered when analyzing information at the parent company level.
- Evidence from your subsidiaries is fully accepted and credited.
- It is a common practice for large corporations to provide aggregated reporting at the group level. However, parent-level reporting will only be partially credited as it does not give a precise view of the scope under assessment. Key performance indicators (KPIs) specific to the scope under assessment are expected because they give a clearer picture of the sustainability performance of the rated company. We believe that if reporting is consolidated at the group level, it would be possible to disaggregate it to obtain the KPIs matching the exact perimeter of the company’s assessment.
- Evidence solely from your subsidiary can be accepted only if it represents a significant portion of the operations the assessment scope. You may also consult the “How-to-Guides‟ on developing a report, available in the Sustainability Guidance tab under the Useful Resources section.
Click here to read more about the format and validity period of the supporting documents.