Supply Chain Impact

Research by the International Labor Organization estimates that forced labor generates annual profits of $150 billion per year. Among those profiting are corporations, which may purchase products or source materials from companies that disregard basic human rights, use child labor, or have unsafe working conditions.


Components

A major factor in how Americans defined corporate JUSTness involved safe and fair treatment of workers in a company’s supply chain. Below are the Components that Americans defined as important in measuring JUST supply chain activity, and how we are measuring corporate performance for each of them. Click on the Component metrics to learn more.


Does Not Have Suppliers with Abusive Conditions

Does the company buy from suppliers who subject their employees to abusive conditions? 94% of respondents said that forced labor, child labor, and generally abusive conditions were important to measuring JUST supply chain impact.

Commitment to Supply Chain Policy & Practices

Description: Commitment to supply chain policy and practices, comprising assessments of whether the company:

  1. has a policy to improve employee health & safety in its supply chain;
  2. trains its executives or key employees on employee health & safety in the supply chain;
  3. has implemented any initiatives to ensure the protection of the rights of all people it works with. “N” indicates that the company has not explicitly disclosed any such efforts in its most recent Annual or Company Responsibility reports;
  4. has implemented any initiatives to reduce the social risks in its supply chain. Social risks might include poor working conditions, the use of child or forced labor, lack of a living, fair or minimum wage etc. “N” indicates that the company has not explicitly disclosed any such efforts in its most recent Annual or Company Responsibility reports; and
  5. has implemented any initiatives to ensure the prevention of child labor in all parts of its business.  “N” indicates that the company has not explicitly disclosed any such efforts in its most recent annual or company responsibility reports.

Each of these five data points awarded a value of 2 if TRUE and summed.

Data Source(s): 

  1. ASSET4
  2. ASSET4
  3. Bloomberg
  4. Bloomberg
  5. Bloomberg

Metric Type: Management
Geography: Global
Unit of Measurement: Score (0-10)


Controversies in Human Rights in Supply Chain

Description: Number of severe and very severe cases (major scandals or systematic risk incidents) in influential and highly influential news sources occurring globally over the past three years that pertain to human rights abuses.

Data Source(s): RepRisk
Metric Type: Controversy
Geography: Global
Unit of Measurement: Number


Does not Cause or Contribute to Conflict Abroad

Does the company directly or indirectly support international conflict? According to our 2015 Survey, 78% of respondents said that determining whether companies support conflict in sourcing materials was important to measuring JUST supply chain impact.

Commitment to Conflict-Free Sourcing

Description: Commitment to conflict-free sourcing, comprising assessments of:

  1. the extent to which companies are at risk of incurring regulatory compliance costs, reputational damage, or supply chain disruptions resulting from reliance on raw materials that originate in areas associated with severe human rights and labor rights abuses. The range of scoring depends on the material, with different materials relevant for different industries. In general, companies able to trace the origin of their raw materials and certify that they were obtained in a way that minimizes social harm (e.g. slave labor, funding for groups engaged in human rights violations) score higher on this key issue, while companies that do not work with their suppliers and use no certified materials score lower on this key issue.
  2. the quality of a company’s formal policy commitment to eliminate conflict minerals from its products and its supply chain (i.e. an internal strategy). The term “conflict minerals” refers to tantalum (coltan), tin (cassiterite), tungsten (wolframite) – the 3Ts – and gold, which have originated in the Democratic Republic of Congo (DRC) and have been linked to the illegal trafficking of these mineral ores, and to egregious human rights violations in the eastern conflict regions of the country.
  3. the strength of the company’s initiatives to eliminate conflict minerals from its products and its supply chain. The term “conflict minerals” refers to tantalum (coltan), tin (cassiterite), tungsten (wolframite) and gold (commonly referred to as the 3TG), which have originated in conflict-affected or high-risk regions and may be used to financially support the conflict or human rights abuses. The most prominent example is the Democratic Republic of Congo (DRC), where conflict minerals have been linked to the illegal trafficking of these mineral ores, and to egregious human rights violations in the eastern conflict regions of the country.

Data point 1 averaged with [(average of data points 2 and 3)/10]

Data Source(s): 

  1. MSCI
  2. Sustainalytics
  3. Sustainalytics

Metric Type: Management
Geography: Global
Unit of Measurement: Score (0-10)


Controversies in Conflict Regions

Description: Number of severe and very severe cases (major scandals or systematic risk incidents) in influential and highly influential news sources occurring globally over the past three years that pertain to conflict minerals.
Data Source(s): RepRisk
Metric Type: Controversy
Geography: Global
Unit of Measurement: Number


Does Not Do Business with Repressive Governments

Does the company do business with repressive governments? According to our 2015 Survey, 76% of Americans said that avoiding this type of business was important to measuring JUST supply chain impact.

Controversies in Business with Repressive Governments

Description: Number of severe and very severe cases (major scandals or systemic risk incidents) in influential and highly influential new sources occurring in countries flagged by the US Treasury Department Active Sanctions Program, over the past three years. Countries include: Belarus; Burundi; Central African Republic; Cuba; Democratic Republic of the Congo; Iran; Iraq; Ivory Coast; Korea (Democratic People’s Republic); Lebanon; Libya; Myanmar; Somalia; Sudan; South Sudan; Syrian Arab Republic; Ukraine; Venezuela; Yemen; and Zimbabwe.

Data Source(s): RepRisk
Metric Type: Controversy
Geography: Global
Unit of Measurement: Number