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COMPARISON TOOL

SK Hynix 18/100

(KRX:OOO660) 17 of 20 (2016)

SK Hynix Inc. (SK Hynix) provides limited disclosure on its approach to addressing forced labor risks in its supply chain, ranking seventeenth on the benchmark overall. The company discloses a commitment to prohibit forced labor, in addition to some information on its forced labor related training programs and its supply chain risk assessment and monitoring processes. In order to improve its benchmark performance, SK Hynix is encouraged to disclose evidence of a Supplier Code of Conduct that meets international standards, purchasing practices that take into consideration forced labor, and an approach to recruitment of workers in its supply chain that minimizes forced labor risk.

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18 /100

2016 Ranking: 17 of 20

HOW DO THEY COMPARE?

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18

SK Hynix was evaluated both in 2016, when it ranked 17th out of 20 companies, and in 2018, when it ranked 26th out of 40 companies. Despite a strengthened methodology which makes it harder to achieve the same score, the company's score increased its score by one point to 19/100 since 2016 by disclosing that it requires suppliers to cascade its standards to lower tiers of its supply chains.

METHODOLOGY

19

The average score for the sector was 32/100, compared to 39/100 in 2016. The drop in score is due in part to the increase in number of small and mid cap companies from 20 to 40, as well as the changes made to the methodology that strengthened it. The 20 companies benchmarked in both 2016 and 2018 saw their average score improve from 39/100 to 40/100, which is notable given the changes to the methodology.

2018 BENCHMARK

2016

18

SK Hynix was evaluated both in 2016, when it ranked 17th out of 20 companies, and in 2018, when it ranked 26th out of 40 companies. Despite a strengthened methodology which makes it harder to achieve the same score, the company's score increased its score by one point to 19/100 since 2016 by disclosing that it requires suppliers to cascade its standards to lower tiers of its supply chains.

METHODOLOGY

2018

19

The average score for the sector was 32/100, compared to 39/100 in 2016. The drop in score is due in part to the increase in number of small and mid cap companies from 20 to 40, as well as the changes made to the methodology that strengthened it. The 20 companies benchmarked in both 2016 and 2018 saw their average score improve from 39/100 to 40/100, which is notable given the changes to the methodology.

2018BENCHMARK

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 22 indicators across the seven themes. For each theme, a company can score a total of 100 points.

Commitment and Governance

The company's top-level commitments on forced labor, supply chain standards, management processes, training programs and stakeholder engagement

OVERALL 44
INDICATORS
Awareness and Commitment
100
Supply Chain Standards
20
Management and Accountability
0
Training
50
Stakeholder Engagement
50

Traceability and Risk Assessment

The extent to which the company traces its supply chain and conducts forced labor risk assessments, and discloses information about these processes.

OVERALL 38
Traceability and Risk Assessment
50
Transparency
25

Purchasing Practices

The company's awareness and action on purchasing practices that can exacerbate forced labor risks, and its process for selecting suppliers, integrating standards into contracts and cascading them down the supply chain.

OVERALL 0
Purchasing Practices
0
Supplier Selection
0
Integration into Supplier Contracts
0
Cascading Standards through the Supply Chain
0

Recruitment

The company's approach to reducing exploitation by recruitment agencies and eliminating workers' payment of fees for their jobs.

OVERALL 0
Recruitment Approach
0
Recruitment Fees
0
Recruitment Audits
0

Worker Voice

The extent to which the company proactively communicates with workers through the supply chain, enables freedom of association and ensures access to effective and trusted grievance mechanisms.

OVERALL 0
INDICATORS
Communication of Policies
0
Worker Voice
0
Worker Empowerment
0
Grievance Mechanism
0

Monitoring

The company's process for auditing (including whether it includes non-scheduled visits, document review, worker interviews) and disclosure about the audit process and findings.

OVERALL 33
Auditing Process
25
Audit Disclosure
40

Remedy

The extent to which the company has corrective action plans for non-compliant factories, as well as processes for remedying workers who are victims of forced labor, and reports on remedies provided.

OVERALL 13
Corrective Action Plans
25
Remedy Programs
0

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