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Nestlé 58/100

(SWX:NESN) 5 of 38 (2018)

Nestlé S.A. (Nestlé), the world's largest food company whose products include chocolate, confectionery, and coffee, among others, ranks fifth out of 38 companies, disclosing more information on its forced labor policies and practices than its peers across all themes. Compared to 2016, the company improved by disclosing the list of its palm oil suppliers, a requirement for suppliers not to use "production targets or performance indicators that lead to forced labour or work above reasonable limits", and a collaboration with the Issara Institute, which provides workers in its Thai seafood supply chains access to grievance mechanisms. Notably, the company achieved the highest scores on themes of traceability and risk assessment, as well as monitoring, and it has strong and specific commitments to addressing forced labor in place. KnowTheChain identified three allegations of forced labor in the company's supply chains. The company discloses public responses to the allegations, and steps taken to address forced labor risks going forward. However, it did not disclose remedy outcomes for workers. Additional steps the company could take to address forced labor risks in its supply chains include strengthening its disclosure and practices on the themes of purchasing practices, worker voice, and remedy.

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58 /100

2018 Ranking: 5 of 38

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57

Nestlé was evaluated both in 2016, when it ranked third out of 20 companies, and in 2018, when it ranked fifth out of 38 companies. Nestlé has improved by one point since 2016 to score 58/100. The company improved by disclosing the list of its palm oil suppliers, a requirement for its suppliers not to use "production targets or performance indicators that lead to forced labour or work above reasonable limits," and collaborating with the Issara Institute, which provides workers in its Thai seafood supply chains access to grievance mechanisms.

2016 BENCHMARK

58

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

57

Nestlé was evaluated both in 2016, when it ranked third out of 20 companies, and in 2018, when it ranked fifth out of 38 companies. Nestlé has improved by one point since 2016 to score 58/100. The company improved by disclosing the list of its palm oil suppliers, a requirement for its suppliers not to use "production targets or performance indicators that lead to forced labour or work above reasonable limits," and collaborating with the Issara Institute, which provides workers in its Thai seafood supply chains access to grievance mechanisms.

2016BENCHMARK

2018

58

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 81
INDICATORS
Commitment
100
Supply Chain Standards
80
Management and Accountability
75
Training
50
Stakeholder Engagement
100

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 94
Traceability
87.5
Risk Assessment
100

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
50
Integration into Supplier Contracts
0
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 45
Recruitment Approach
30
Recruitment Fees
75
Monitoring and Ethical Recruitment
25
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 26
INDICATORS
Communication of Policies
0
Worker Voice
25
Freedom of Association
0
Grievance Mechanism
80

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 65
Auditing Process
70
Audit Disclosure
60

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 44
Corrective Action Plans
50
Remedy Programs and Response to Allegations
37.5

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