Firms in Asia Pacific beat North American peers on environmental performance

Around 89,000 companies examined across four sustainability themes.

It looks like businesses in Asia Pacific are doing something right environment-wise.

Releasing the ninth edition of its Global Supply Chain Sustainability Risk & Performance Index, sustainability ratings firm EcoVadis noted: "Asia Pacific (APAC) stood out as making the strongest gains in 2024, with companies there increasing their average score by three points across all four sustainability themes (environment, labor & human rights, ethics, and sustainable procurement).

"APAC companies pulled ahead of North America on environmental performance and are rapidly closing the gap on sustainable procurement, a key driver of resilience and ROI (return on investment). While APAC still lags behind North America and Europe in areas like ethics and labor & human rights, its rapid progress is reshaping the global landscape."

According to EcoVadis – whose ratings assess the quality of firms' sustainability management systems through their policies, actions, and results – the average score in 2024 improved to 53.4. This leap placed the typical rated company under EcoVadis' "good" category when it comes to sustainability.

Sylvain Guyoton, chief rating officer at EcoVadis, commented: "In a noisy political environment, supply chain performance tells a clearer story. The Index takes that sentiment one step further, offering evidence that supply chain partners are following through.

"Companies that stay committed to business sustainability efforts are reaping the benefits – risk reduction, resilience, supply chain performance, cost savings, and growth – and setting the pace for the rest of the market."

Having examined nearly 89,000 organisations across more than 250 industries and 150 countries, EcoVadis highlighted that the number of sustainability ratings conducted over the past five years has surged by 167%. In 2024 alone, 49,000 ratings were conducted.

"More companies are not just assessing their sustainability risks, they're committed to making measurable progress over time, even as public discourse remains polarised," EcoVadis said.

"In fact, 27% of companies with multiple ratings are now classified as top performers, more than double the number from 2020. This shows that long-term efforts to improve business sustainability efforts are starting to deliver real progress."

Notably, more than a third of those who were rated for the first time in 2024 scored below 45, pointing to weaknesses in operational and supply chain risks management.

EcoVadis reported: "Amongst companies rated more than once, 86% scored above the risk threshold (a score of 45 or higher), showing that regular assessment helps reduce risk and build stronger sustainability practices.

"Companies made the most progress in sustainable procurement – how they choose and work with suppliers – but it's still the weakest area overall. 60% of all rated companies (and 75% of first-timers) still fall into the higher-risk category."

Firms are advised to translate their sustainability efforts into deeper, supplier-level action, particularly in terms of procurement.