EcoVadis has recently released a report entitled “The Fight Against Corruption: Insights Into Ethical Performance in Global Supply Chains”, which studies organizations’ performance in tackling corruption and critical ethical issues.
The research investigated more than 20,000 companies from 100 countries and 150 industries, and scores from 0 to 100 were given after evaluation. One key finding in the report is that most of the companies hold a reactive attitude towards corruption risks, but there are not much structured approaches to address them.
It is reported companies’ performance on business ethics vary among countries, as the North American and European companies generally get a higher score (above 45) that the other countries, and more than half of them have adopted a formal anti- corruption policy. This may be attributed to the implementation of stricter regulatory measures, such as scrutiny, disclosure obligations and penalties, in some countries.
Regarding the measures for tackling corruption problems, it is discovered that some of the common best practices across the globe are whistleblowing, anti-corruption training and internal audits/ controls, while the use of some basic measures, such as corruption risk assessments, is not common in most of the companies. Moreover, it is revealed that less than 10% of the investigated companies report on business ethics KPIs, indicating an unsatisfactory performance in the disclosure of business ethic issues.
In addition, as shown in the findings about industry performance, companies in the industries of finance and insurance, power transmission and generation, information and communication technology, real estate, and legal and consulting are the top performers in managing and tackling corruption risk, whereas the scores of some industries, which include wholesale, transportation and storage, construction and the light and heavy manufacturing, fall below the world’s average, implying that they have face a higher corruption risk.
According to Pierre-Francois Thaler, Co-CEO of EcoVadis, companies should not only adopt anti-corruption policies through a code of conduct, but should also carry out concrete internal control measures, so as to prevent the potential threat to companies’ revenue and reputation.
It is advised that management personnel should introduce structured and comprehensive risk mitigation program to help increase transparency, hold all parties responsible, and encourage collaboration on performance improvements.
