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Broadcom 33/100

(NASDAQ:BRCM) 13 of 20 (2016)

Broadcom LTD. (Broadcom) discloses relatively limited information on its management approach of forced labor risks in its supply chain, ranking thirteenth on the benchmark overall. The company discloses an awareness of the risks of forced labor and ranks above the benchmark average in the area of commitments and governance, which is due to its disclosure of human trafficking and supply chain policies and standards. However, Broadcom has an opportunity to improve its benchmark performance in the areas of recruitment, worker voice, and remedy, since it ranks below the benchmark average across each of these areas.

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33 /100

2016 Ranking: 13 of 20

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33

Broadcom was evaluated both in 2016, when it ranked 13th out of 20 companies, and in 2018, when it ranked 37th out of 40 companies. Since 2016, its score decreased substantially, from 33/100 to 6/100. In addition to a strengthened methodology which makes it harder to achieve the same score, this decrease is due in large part to the decrease in information made available by the company on its efforts to address forced labor and human trafficking. For example, the company no longer discloses a modern slavery statement, a Human Rights Policy nor a Sustainability Report. It is also no longer a member of the Responsible Business Alliance.

METHODOLOGY

6

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

33

Broadcom was evaluated both in 2016, when it ranked 13th out of 20 companies, and in 2018, when it ranked 37th out of 40 companies. Since 2016, its score decreased substantially, from 33/100 to 6/100. In addition to a strengthened methodology which makes it harder to achieve the same score, this decrease is due in large part to the decrease in information made available by the company on its efforts to address forced labor and human trafficking. For example, the company no longer discloses a modern slavery statement, a Human Rights Policy nor a Sustainability Report. It is also no longer a member of the Responsible Business Alliance.

METHODOLOGY

2018

6

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 70
INDICATORS
Awareness and Commitment
100
Supply Chain Standards
100
Management and Accountability
50
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 50
Traceability and Risk Assessment
50
Transparency
50

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 56
Purchasing Practices
0
Supplier Selection
25
Integration into Supplier Contracts
100
Cascading Standards through the Supply Chain
100

Recruitment

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

OVERALL 17
Recruitment Approach
0
Recruitment Fees
50
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 11
INDICATORS
Communication of Policies
25
Worker Voice
0
Worker Empowerment
0
Grievance Mechanism
20

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 25
Auditing Process
50
Audit Disclosure
0

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 0
Corrective Action Plans
0
Remedy Programs
0

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