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Fast Retailing 43/100

(TSE:9983) 20 of 43 (2018)

Fast Retailing Co. Ltd. (Fast Retailing), the world's third-largest apparel retailer, ranks 19th out of 43 companies, disclosing more information on its forced labor policies and practices than its peers on all themes except Traceability & Risk Assessment and Recruitment. Compared to 2016, the company has improved its score by five points by disclosing more details on its supplier training, developing responsible procurement principles, and monitoring sewing and fabric partners. It improved some practices in relation to two of its nine brands, Uniqlo and GU. The company discloses the names and addresses of the "core partner factories" of both brands and established a hotline that suppliers' workers of the two brands can use to contact the company. Fast Retailing is the highest scoring of the companies based in Asia. Additional steps it could take include strengthening its disclosure and practices on the themes of Traceability & Risk Assessment, Recruitment, and Worker Voice and expanding its existing practices across its brands.

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43 /100

2018 Ranking: 20 of 43

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38

Fast Retailing was evaluated both in 2016, when it ranked 15th out of 20 companies, and in 2018, when it ranked 19th out of 43 companies. Since 2016, the company has improved by disclosing more details on its supplier training, developing responsible procurement principles, and monitoring sewing and fabric partners. It improved some practices at Uniqlo and GU, two of its nine brands.

2016 BENCHMARK

43

The average score for the sector was 37/100 compared to 49/100 in 2016. The number of companies assessed in 2018 increased from 20 to 43. Since 2016, the methodology has been strengthened, making it more difficult for companies to achieve the same score. The 19 companies benchmarked in both 2016 and 2018 saw their average score increase from 49/100 to 56/100, which is significant given the changes to the methodology.

METHODOLOGY

2016

38

Fast Retailing was evaluated both in 2016, when it ranked 15th out of 20 companies, and in 2018, when it ranked 19th out of 43 companies. Since 2016, the company has improved by disclosing more details on its supplier training, developing responsible procurement principles, and monitoring sewing and fabric partners. It improved some practices at Uniqlo and GU, two of its nine brands.

2016BENCHMARK

2018

43

The average score for the sector was 37/100 compared to 49/100 in 2016. The number of companies assessed in 2018 increased from 20 to 43. Since 2016, the methodology has been strengthened, making it more difficult for companies to achieve the same score. The 19 companies benchmarked in both 2016 and 2018 saw their average score increase from 49/100 to 56/100, which is significant 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 62
INDICATORS
Commitment
100
Supply Chain Standards
60
Management and Accountability
50
Training
75
Stakeholder Engagement
25

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 19
Traceability
12.5
Risk Assessment
25

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 55
Purchasing Practices
45
Supplier Selection
75
Integration into Supplier Contracts
50
Cascading Standards through the Supply Chain
50

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 6
Recruitment Approach
0
Recruitment Fees
0
Monitoring and Ethical Recruitment
0
Migrant Worker Rights
25

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 29
INDICATORS
Communication of Policies
75
Worker Voice
0
Freedom of Association
0
Grievance Mechanism
40

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 provide disclosure on the outcomes of supplier audits.

OVERALL 65
Auditing Process
90
Audit Disclosure
40

Remedy

This theme measures the extent to which a company has corrective action plans and 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 63
Corrective Action Plans
100
Remedy Programs and Response to Allegations
25

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