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Danone 38/100

(ENXTPA:BN) 11 of 38 (2018)

Danone S.A. (Danone), a French company producing dairy products, beverages, baby food, and medical nutrition products, ranks 11th out of 38 companies, disclosing more information on its forced labor policies and practices than its peers on all themes except worker voice and remedy. Compared to 2016, the company improved its score by ten points. This is because the company discloses stakeholder engagement on forced labor, a forced labor risks assessment and some outcomes, a supplier code which prohibits worker-paid recruitment fees and requires suppliers to cascade the standard, and the expansion of its grievance mechanism to include human rights related grievances. Notably, the company discloses that the Social Responsibility Committee of its board will have regular meetings on human rights due diligence and forced labor beginning in 2018. Additional steps the company could take to address forced labor risks in its supply chains include disclosing policies and practices on the themes of recruitment, worker voice, and remedy.

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38 /100

2018 Ranking: 11 of 38

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28

Danone was evaluated both in 2016, when it ranked 12th out of 20 companies, and in 2018, when it ranked 11th out of 38 companies. Compared to 2016, the company improved its score by ten points, increasing from 28/100 to 38/100 in 2018. This is because the company discloses stakeholder engagement on forced labor, a forced labor risk assessment and some outcomes, a supplier code which prohibits worker-paid recruitment fees. Further, it started to require suppliers to cascade the standard, and expanded its grievance mechanism to include human rights-related grievances.

2016 BENCHMARK

38

The average score for the sector was 30/100, matching the average score in the 2016 benchmark. Compared to 2016, the number of companies assessed in 2018 increased from 20 to 38. Since 2016 the methodology has been strengthened, making it harder for companies to achieve the same score. The 19 companies benchmarked in both 2016 and 2018 saw their average score increase from 30/100 to 33/100, which is positive given the changes to the methodology.

METHODOLOGY

2016

28

Danone was evaluated both in 2016, when it ranked 12th out of 20 companies, and in 2018, when it ranked 11th out of 38 companies. Compared to 2016, the company improved its score by ten points, increasing from 28/100 to 38/100 in 2018. This is because the company discloses stakeholder engagement on forced labor, a forced labor risk assessment and some outcomes, a supplier code which prohibits worker-paid recruitment fees. Further, it started to require suppliers to cascade the standard, and expanded its grievance mechanism to include human rights-related grievances.

2016BENCHMARK

2018

38

The average score for the sector was 30/100, matching the average score in the 2016 benchmark. Compared to 2016, the number of companies assessed in 2018 increased from 20 to 38. Since 2016 the methodology has been strengthened, making it harder for companies to achieve the same score. The 19 companies benchmarked in both 2016 and 2018 saw their average score increase from 30/100 to 33/100, which is positive given the changes to the methodology.

METHODOLOGY

THEME AND INDICATOR SCORE

The benchmark methodology has seven themes, selected to capture the key areas where companies need to take action to eradicate forced labor from their supply chains. There are a total of 23 indicators across the seven themes. For each theme, a company can score a total of 100 points.

Commitment and Governance

This theme evaluates a company's commitment to addressing forced labor, whether it discloses supply chain standards, and to what extent it has management processes and board oversight, training programs, and engagement with stakeholders on forced labor in place.

OVERALL 65
INDICATORS
Commitment
100
Supply Chain Standards
50
Management and Accountability
75
Training
50
Stakeholder Engagement
50

Traceability and Risk Assessment

This theme measures the extent to which a company demonstrates an understanding of its suppliers and their workforce by disclosing relevant information (such as supplier names or sourcing countries) and assesses and discloses forced labor risks across its supply chains.

OVERALL 44
Traceability
12.5
Risk Assessment
75

Purchasing Practices

This theme assesses to what extent a company adopts responsible purchasing practices (such as providing price premiums and procurement incentives) and integrates supply chain standards into supplier selection and supplier contracts, and whether it cascades them down the supply chain.

OVERALL 53
Purchasing Practices
60
Supplier Selection
0
Integration into Supplier Contracts
50
Cascading Standards through the Supply Chain
100

Recruitment

This theme measures a company's approach to reducing the risk of exploitation of supply chain workers by recruitment agencies, eliminating workers' payment of fees during recruitment processes throughout its supply chains, and protecting the rights of migrant workers.

OVERALL 25
Recruitment Approach
0
Recruitment Fees
50
Monitoring and Ethical Recruitment
0
Migrant Worker Rights
50

Worker Voice

This theme measures the extent to which a company engages with workers in its supply chains, enables freedom of association, and ensures access to effective and trusted grievance mechanisms.

OVERALL 8
INDICATORS
Communication of Policies
0
Worker Voice
0
Freedom of Association
0
Grievance Mechanism
30

Monitoring

This theme evaluates a company's process for auditing suppliers (including whether audits include non-scheduled visits, review relevant documents such as wage slips or contracts, interview workers, and audit lower-tier suppliers) and providing disclosure on the outcomes of supplier audits.

OVERALL 45
Auditing Process
70
Audit Disclosure
20

Remedy

This theme measures the extent to which a company has corrective action plan processes for non-compliant suppliers and ensures remedy is provided to workers in its supply chains who are victims of forced labor. Publicly available allegations of forced labor in a company's supply chains that occurred in the past three years, and how a company has responded to and addressed those allegations, are also assessed as part of this theme.

OVERALL 25
Corrective Action Plans
50
Remedy Programs and Response to Allegations
0

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