Highlights of the EcoVadis Global CSR index 2017

Document Classification: EcoVadis Public

Rising scores drive supply chain

performance


Presenters

Rosey HurstFounder Impactt

Sylvain GuyotonVP Research

EcoVadis


1. Highlights EcoVadis Global CSR Index 2017 – Sylvain Guyoton

2. Taking a Human Rights perspective: The challenges and opportunities in Global Supply Chains – Rosey Hurst

3. Q&A session

Agenda


Data Universe

799,250evaluation data points

used

640,770documents evaluated by

EcoVadis

24,984evaluations

194EcoVadis ISIC

categories

21,927unique

companies

144countries

28portfoliosindustry

divisions

2size

groups

3

1

10World

Regions


Methodology


Results overview

0

0,5

%

0,4

%

00-14 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85-100

5%

10%

15%

20%

25%

30%

6%

4%

24%

21%

25%

25%

28

%

30%

13%

16%

3%

4% 0,2

8%

0,4

1%

0 % 0 %

% of evaluations in that year in score range

Year 2015 Year 2016

Scorerange

0

10

20

30

40

50

42

,4

44

,0

43,2

43

,8

45

,4

44,6

44

,0

45

,3

44,7

39

,3

41

,5

40,5

36

,9

38

,6

37,8

Year 2015 Year 2016

Universe figures

2 Years


AMEA - EUROPE - AMERICAS – WORLD: Who is leading?

Europe dominates the world average, and the 2 other world regions across 2015 and 2016


AMEA - EUROPE – AMERICAS – WORLD: Does the size matter?


Portfolios’ score

The results are overall positive, with most portfolios

edging closer to being considered low CSR risk. Yet, certain portfolios continue to

hold medium to high CSR risks

X axis - number of companies in portfolio Y axis - % change in average overall CSR

score from 2015 to 2016


Top performing industry per theme


Industry zoomM

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When comparing to our 2013 study, this year we see a

convergence between the US and Europe on the same top

three drivers and priorities for SP programs: Brand

Reputation, Risk Mitigation, and Compliance.

The other side of the coin: procurement organizations


“ Multi-tier visibility and traceability to the origins of

our supply chains and transparent reporting on this to our stakeholders is rapidly becoming a requirement for

us”.

Top 5 Pharmaceutical Company

Global Supply Chain Coverage Expands Drastically


• How do you engage your supply chain to drive improvements on sustainability issues (multiple choice)?

• Sustainability/CSR clauses in contracts

• Sustainability assessments and/or on-site audits

• Set performance targets with recognition and/or incentives

• Collaborate on improvement plans and/or education on CSR

Poll question

Taking a Human Rights perspective

The challenges and opportunities in Global Supply Chains

Rosey Hurst, Founder and Director, Impactt Limited

What workers say

It was a dream to work in the gulf countries as no opportunities back at home. Now I am here and do not want my relatives to be here, and work as an ox in the field. I want to go to home but do not have my passport in my hand, so I have to work till the contract finishes with my employer. I swear, I will not come back to construction work in the gulf.

Nepali worker, Qatar

What workers say

I am not happy with the life, after doing so much hard work and not being able to fulfil my dreams.

Worker, India

What workers say

Supervisors show little respect to workers: shouting, telling us to work faster, not allowing us

to go to the toilet…

Worker, UK

In the news

2010 2011 2012 2013 2014 2015 2016 2017

UNGPs

US Business Supply Chain Transparency Act introduced

UK Bribery Act Focus on Supply Chains

E.O. 13627: Strengthening Protection Against Trafficking in

Persons in Federal Contracts

UK Modern Slavery Act

California Transparency in Supply Chains Act Australian Slavery, Slavery-Like

Conditions and People Trafficking Act

EU Directive on Preventing and Combatting Trafficking in

Human Beings EU Directive on ESG Disclosure

US Business and Supply Chain Transparency on Trafficking

and Slavery Act 2015 introduced

Key legislation

Dutch Child Labour Due Diligence Law

Swiss responsible business initiative launched

French ‘Duty of Care’ Law

UNGP – The 3 pillars

PROTECTRESPECT

REMEDY

SDGs

Directly work towards SDG 8 Targets:• Eradicate forced labour and modern slavery• End child labour in all its forms• Protect labour rights for migrants and those in precarious

employment• Promote safe and secure working environments

Contribute towardsWork towards

Forced Labour

Discrim-ination

FoA

Living Wages

Child Labour

Secure work

Working Hours

H&S

Respect

Worker pie – the trade off

RespectBetter future for family

Income security

• Having a voice• Confidence you will be

listened to• Status at home and in the

factory

• Personal development opportunities

• Promotion opportunities

• A fair wage in a normal working week

• Paid in full on time• Job security

IdentifyMapping the process

Understanding the risksUnderstanding any breaches

RemediateAddressing identified risks

Righting any wrongs

EliminateLooking ahead and proactively ensuring risks are eliminatedPutting in place systems that close off risks one by one

Re-thinking the business to further reduce risks moving forward

In practice

Where are the risks?Who works in your operations and supply chain?

Levels of oversight Directly employedIndirectlyemployed

Auxiliary

Locals

National Migrants

InternationalMigrants

Wage gapsAverage monthlytake home wage

(USD)*

Living Wage Estimate

(Monthly / USD)**

Monthly wage Gap (USD)

Monthly wage gap

% shortfall

Bangladesh 97 452 355 79%

Cambodia 226 472 246 52%

India 168 364 196 54%

Vietnam 258 280*** 22 8%

UK 2098 2239**** 141 6%

China 532 692 160 23%

• Impactt database • **Asia Floor Wage 2017 • ***Global Living Wage Coalition Figures, focusing on Garment sector workers 2016. No updated Asia Floor Wage available for Vietnam)• ****UK Living Wage Foundation, based on Living Wage Outside of London (£8.25/hour)

Prevalence in China from 2007 to Q3 2017

CHINA PREVALENCE INDEX*

Forced labour Hours over

60/weekNon-payment of minimum wages

Child labour No robust age

verification system

No union or ineffective

union

2007 77% 79% 82% 28% 77% 100%

2008 89% 95% 73% 36% 89% 87%

2009 73% 86% 38% 8% 66% 71%

2010 80% 93% 65% 22% 71% 74%

2011 71% 91% 47% 24% 70% 53%

2012 56% 88% 27% 36% 62% 89%

2013 45% 93% 23% 16% 53% 81%

2014 21% 98% 27% 13% 48% 64%

2015 10% 100% 17% 26% 50% 33%

2016 19% 98% 45% 2% 35% 79%

2017 6% 100% 50% 10% 48% 88%

Source : Impactt data * Years 2007-2015 are from August to July, e.g. 2014 is August 2013 to July 20142016 is from August 2015 to December 2016

2017 aligns with the calendar year – ask Impactt for further details

Services in UAE - 2017

Source : Impactt data

64%

56%

100%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Hours over60/week

Forced labour No union orineffective

workerrepresentation

In the food sector too - 2017Impactt have visited 121 food processing sites since 2012, including:

• Nut harvesting areas of the Amazon• Tea plantations in Kenya• Chicken and Turkey killing sites in the UK and

Ireland• Turkish apricot orchards• Berry-growing areas of Morocco


9%

32%

50%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Forced Labour Discrimination Hours over60/week

Finally, the UK

UK PREVALENCE INDEX

Discrimination Abuse

2012 10% 32%

2013 39% 39%

2014 31% 19%

2015 20% 22%

2016 26% 25%

2017 11% 20%


Identify

In practice

REMEMBER

FINDING A PROBLEM IS A GOOD THING!

Human Rights issues are everywhere…If you not finding them, you are not

looking hard enough!

Identification – Some best practice tips

• Review what you already do to understand what is missing to identify issues/risks• What more/different is needed?• How to leverage current processes and what new is needed?

• Supply chain mapping • Beginning at the first tier, eventually moving to second and third tiers.

• Risk assessment (including mapping risk by country, and worker type risk mapping)• Audits can support in this process• Due diligence beyond audit once risk is identified, for example understanding more

about your suppliers’ and your operation labour forces, etc.• Talking with suppliers to understand more about their business, their challenges, their

labour supply chains and ways of recruiting.• Talking with workers. • Ensuring your commercial teams are aware of key issues to spot• Using publicly available resources to determine risk spots, such as NGO reports or

media stories

Key elements

Remediation

Remediation - Don’t Panic

There are practical ways to remediate instances almost all types of exploitation

SLAVERY HARSH TREATMENT EXCESSIVE HOURS

Eliminate

In practice

Elimination

Elimination

Good regulation

Business caseRe-humanisation

What does good reporting look like?

Dos• Be honest, simple and

transparent• Focus on the greatest

(salient) risks to people• Show how it connects to the

business overall• Get specific – share examples• Set clear and realistic

commitment• Show your understand your

supply chain• Demonstrate impact• Be open about challenges• Explain gaps• Look forward

Don’ts• Leave gaps to the imagination• Be too top-level without

giving details• Only share success• Share bits and pieces without

showing how they connect• Make it hard to find connected

information

For more information on Impactt contact:

[email protected] / [email protected]

020 72426777

For more information on EcoVadis contact:

[email protected] / [email protected]

0182838609

Q&A session

mailto:[email protected]


