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KnowTheChain Benchmarks
Benchmarks can play a powerful role in encouraging companies to uphold labor standards and protect workers’ rights. In 2016 KnowTheChain has benchmarked 60 large global companies in the Information & Technology Communication, Food & Beverage, and Apparel & Footwear sectors on their efforts to address forced labor and human trafficking in their supply chains.
Benchmark
Information & Communications Technology
An evaluation of ICT companies' efforts to protect workers in their supply chains from forced labor.
key findings
Worker Voice
ICT companies are taking little action to ensure workers have a voice throughout their supply chain.
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Traceability & Risk Assessment
ICT companies are taking steps to trace their supply chains beyond first-tier suppliers.
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Recruitment
While some firms have leading policies on recruitment fees, more action is needed across the sector.
Benchmark
Food & Beverage
An evaluation of Food & Beverage companies' efforts to protect workers in their supply chains from forced labor.
key findings
Recruitment
Action needed to protect migrant and seasonal agriculture workers during recruitment.
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Traceability
Companies have started to trace commodities, but efforts are limited in scope.
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Purchasing Practices
Integration of labor standards needs to be accompanied by efforts to reward suppliers with strong labor practices.
Benchmark
Apparel & Footwear
An evaluation of Apparel and Footwear companies' efforts to protect workers in their supply chains from forced labor.
key findings
Recruitment
Action needed to protect workers during recruitment process.
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Worker Voice
Apparel companies taking little action to ensure workers have a voice throughout their supply chain.
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Remedy
Greater commitment needed by apparel companies to address and remediate abuses.
FAQS
about know the chain
What is KnowTheChain?
KnowTheChain is a resource for businesses and investors who need to understand and address forced labor abuses within companies’ supply chains. It benchmarks current corporate practices, develops insights, and provides practical resources that inform investor decisions and enable companies to comply with growing legal obligations while operating more transparently and responsibly.
KnowTheChain’s partner organizations have significant expertise in addressing forced labor worldwide. KnowTheChain is a collaborative partnership between
the Business & Human Rights Resource Centre, Humanity United,Sustainalytics and Verité. KnowTheChain is backed by a network of supporters and advisors who help promote and inform our work.
KnowTheChain is a project of Humanity United, a foundation dedicated to bringing new approaches to global problems that have long been considered intractable. It builds, leads, and supports efforts to change the systems that contribute to problems like human trafficking, mass atrocities, and violent conflict. Humanity United is closely involved in the project management and communication efforts of the benchmarks.
The non-profit Business & Human Rights Resource Centre, which tracks the human rights policy and performance of over 6,000 companies, contributes to the development, company and stakeholder outreach, analysis, and project management of KnowtheChain’s benchmarking activities.
The research provider Sustainalytics, the largest independent provider of sustainability research and analysis to investors, undertakes the data collection and analysis for the benchmarks.
The labor consultancy, Verité, provides guidance and resources for companies, with concrete steps on how to address forced labor.
What are the KnowTheChain Benchmarks?
To drive awareness and continued corporate action on the issue of forced labor in supply chains, KnowTheChain will be assessing corporate policies and practices across three sectors where forced labor is particularly acute: information & communications technology (ICT), food & beverage, and apparel & footwear. The benchmarks are a measurement of companies’ disclosures on their policies and practices to mitigate the risk of forced labor and human trafficking in their supply chains.
Why do you benchmark companies?
KnowTheChain believes benchmarking can drive awareness and continued corporate action on the issue of forced labor in supply chains. Benchmarking helps clarify what companies with comparable risks and supply chains are doing to appropriately address forced labor in their supply chains. By distinguishing between leaders and laggards, benchmarks can help reward those companies taking action and incentivize others to follow their leadership. Benchmarks also help to identify the leading practices that companies are currently using to address possible issues in their supply chains. Existing benchmarks such as the Access to Medicine Index for the pharmaceutical sector, Oxfam’s Behind the Brands ranking of global food companies, and Ranking Digital Rights for information and communications technology companies, have demonstrated how this approach can drive tangible improvements in companies’ policies and practices.
Why are you focused on forced labor?
Forced labor is a pervasive problem across all corporate supply chains. Despite efforts from policy makers, civil society, investors, and companies themselves, the International Labour Organization estimates that 21 million people are victims of forced labor globally. Forced labor in the private economy generates USD$150 billion in illegal profits each year.
In the wake of forced labor abuse revelations in global supply chains, companies are increasingly expected by consumers, investors, media, and governments to maintain transparent and responsible supply chains.
about the benchmark
What sources of information are considered in a company’s evaluation?
The benchmarks are based on information that is made publicly available by the companies assessed in each benchmark. In addition, each company is invited to provide answers to a set of engagement questions about their policies and practices to address forced labor risks in their supply chains.
Stakeholders interested in additional third-party information on each of the benchmarked companies are invited to visit the website of KnowTheChain partner Business & Human Rights Resource Centre, which tracks global news and reports on corporate human rights policies and practices.
KnowTheChain will continue to strive to improve its methods of evaluating companies, especially with regard to their practices, and will continue to explore areas not covered, such as third-party information.
How did you select the sectors and companies?
Companies were selected using two primary criteria: exposure to forced labor risk and market cap.
The information & communications technology, food & beverage, and apparel & footwear sectors have been identified as having particularly high exposure to forced labor risks; Companies in those sectors are sourcing many products and commodities from countries where labor regulation is poor and/or not enforced. Each of these sectors has been identified by the U.S. Department of Labor as having goods or inputsproduced using forced labor. Likewise, Verité’s Forced Labor Commodity Atlas implicates different commodities in the supply chains of all three sectors.
Furthermore, companies in these three sectors tend to compete for low prices of consumer products, which often leads to pressure on suppliers and subcontracting.
Lastly, migrant workers are very common in the supply chain of these sectors, a group which is particularly vulnerable to forced labor and trafficking.
Can companies decline to participate in the benchmark?
No. The benchmark is intended to be an objective tool for companies and investors. As such, companies cannot opt-out of or opt-in to the benchmark.
Who created the methodology?
The methodology was created by the KnowTheChain partners, Business & Human Rights Resource Centre, Humanity United, Verité, and Sustainalytics, by bringing together their extensive experience on addressing forced labor as well as by building on existing resources from other stakeholders. The benchmark partners undertook a year-long process that included a pilot framework and a series of consultations with relevant actors from civil society, investors, and business.
Are companies engaged in the research process?
Yes, each company has the opportunity to engage with KnowTheChain. When the research process begins, the KnowTheChain research lead, Sustainalytics, reaches out to the relevant company and offers them the opportunity to provide additional information (either by updating their own websites or by providing answers to engagement questions that are posted on the Business & Human Rights Resource Centre website).
Will the benchmarks be updated and if so, how frequently?
KnowTheChain is committed to benchmarking companies in the sectors identified to have high risks of forced labor. The project partners will review the optimal frequency at which the benchmarks will be updated.
Does the benchmark methodology take into account recent and emerging regulatory disclosure requirements (e.g., UK Modern Slavery Act and California’s Transparency in Supply Chain Act)?
Any information that a company makes publicly available will be taken into consideration when evaluating the disclosure of companies’ efforts to address forced labor in their supply chains.
As not all regulations apply to all companies that are benchmarked, KnowTheChain does not explicitly evaluate whether a company complies with regulation on forced labor.
That said, the elements evaluated are intended to help companies understand what type of practices generally demonstrate best practices and compliance with supply chain transparency laws. In fact, those regulations were considered in the creation of the methodology for the benchmark.
Which industries will you be focusing on going forward?
In 2016, KnowTheChain has benchmarked companies from the information and communications technology, food & beverage, and apparel & footwear industries. KnowTheChain will continue to explore ways to benchmark companies that have a significant exposure to forced labor in their supply chains, including by spotlighting risks in specific regions and contexts. KnowTheChain will begin by benchmarking three industries with high exposure to the issue, and in the future it may consider additional industry benchmarks.
Are you looking only at the top tier of the supply chains of these companies, or also looking at commodity and raw material level?
Forced labor often happens at the commodity and raw material level, which is why the benchmark aims to encourage companies to look beyond the first tier of their supply chains. That said, the benchmark also acknowledges efforts of companies to understand and work with their first tier suppliers, as clear expectations towards these suppliers enables them to cascade those expectations down to their own suppliers. In the future, the benchmark may consider ways to focus more strongly on the commodity and raw material level.
How does this research differ from other benchmarks covering the same sectors?
There are a number of different benchmarks out there which cover the same sectors. However, each of those benchmarks focuses on different types of impacts companies are having through their products, services, and business relationships.
ICT sector : Ranking Digital Rights is an initiative that measures ICT companies’ commitments and disclosed policies affecting users’ freedom of expression and privacy. Given the different focus of this initiative and the different risk exposures of companies in the ICT sector, there is currently only one company which is covered by both benchmarks.
Food & Beverage : Oxfam’s Behind the Brands Index focuses on the ten largest food and beverage companies globally, analyzing their agricultural sourcing policies, which also looks at respecting workers’ rights in the supply chain more broadly. The Access to Nutrition Index covers many of the same companies, but focuses on a different aspect: companies’ nutrition-related commitments, practices, and performance.
Multi-sector : The Corporate Human Rights Benchmark will provide a comparative snapshot of the human rights performance of the largest 500 companies globally, aiming to incentivize better human rights performance. It measures company policies, systems, processes, practices and responses to human rights risks and impacts. It looks at forced labor as a key risk for some industries, but does not focus on this exclusively. The pilot benchmark to be released in March 2017 covers 100 companies in the agricultural products, apparel and extractive industries.
How does a company’s participation in key industry initiatives, such as the Electronic Industry Citizenship Coalition, impact the evaluation?
The benchmark encourages companies’ participation in multi-stakeholder or industry initiatives focused on forced labor and human trafficking and hence gives some credit for participation in relevant initiatives. Further, where a company participates in an initiative with stringent requirements, it may automatically receive some credit for adopting the standards required by the relevant initiative.
About using the Benchmark
Can companies be compared across benchmarks?
Since respecting human rights in supply chains requires similar processes across sectors, the methodology is largely the same across each benchmark.
However, when comparing companies, KnowTheChain focuses primarily on comparing companies in the same sector, as progress on a specific issue (or lack thereof) is often linked to industry-specific risks, allegations, or incidents, as well as industry-specific standards and initiatives. That said, companies are encouraged to learn from leading practices across sectors.
How can companies use the benchmark?
The benchmark provides a gap analysis for companies and highlights specific areas of improvement. It identifies and shares best practices so that companies can adopt standards and practices that protect workers’ well-being.
The benchmark is further intended to help companies identify the leading practices within their industry and emerging leading practices outside their industry.
Even companies that are not a part of the benchmark can benefit from learning about the practices being implemented by others within their sector.
Lastly, the benchmark helps companies to understand where they can have a significant impact on reducing their risk of forced labor, which includes areas such as recruitment practices, worker empowerment, and purchasing practices. KnowTheChain has also developed additional resources to help companies understand in more detail what steps can be taken to address forced labor in their supply chains.
How can investors use the benchmark?
The KnowTheChain benchmarks can help investors understand the degree to which companies in their portfolio are exposed to the risk of forced labor and human trafficking in their supply chains.
The benchmarks can further help investors identify which companies in their portfolio are taking appropriate steps to address these risks.
Lastly, the benchmarks highlight key areas in which investors can engage with companies on this issue, which include recruitment practices, worker empowerment, and purchasing practices. It further provides specific recommendations for engaging companies that are covered by the benchmark.
While an investor should consider additional elements when evaluating a possible investment and company engagement strategy, these benchmarks can help inform this decision-making process and identify specific entrypoints for engagement, as well as possible risks to the investor’s own reputation.
How can civil society use the benchmark?
Civil society organizations can use the benchmark in their advocacy and communications efforts. The benchmarks can help civil society to understand how they engage with companies on this issue in order to drive meaningful impact. For example, they can encourage stronger practices from specific companies, highlight strong practices, or call for improvements from any of the benchmarked sectors in specific areas of how sectors address forced labor risks.
How do I contact KnowTheChain if I have another question?
If you have any questions, please contact us at info@KnowTheChain.org.