EMPTY STATE
COMPARISON TOOL

Apple 71/100

(NasdaqGS:AAPL) 3 of 40 (2018)

Apple Inc. (Apple) ranks third out of the 40 companies, disclosing more information on its forced labor policies and practices than its peers across all themes. It has the highest score in the benchmark on the theme of worker voice and the joint-highest score on the theme of monitoring. Since 2016, its score has improved from 62 to 71. This is because it has stated that it undertook supply chain risk assessments that include forced labor, engaged stakeholders on forced labor, and integrated forced labor standards into its supplier contracts. KnowTheChain identified one allegation of forced labor in Apple's supply chain. A letter to employees from the company regarding the allegation, in which the company explained how it improves working conditions in its supply chain, is publicly available. However, the company did not disclose a detailed response to the allegation, nor outcomes of remedy 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 traceability and risk assessment, purchasing practices, and worker voice.

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71 /100

2018 Ranking: 3 of 40

HOW DO THEY COMPARE?

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62

Apple was evaluated both in 2016, when it ranked second out of 20 companies, and in 2018, when it ranked third out of 40 companies. Despite a strengthened methodology which makes it harder to achieve the same score, it improved its score by ten points since 2016 (62/100 to 72/100). This is because it has stated that it undertook supply chain risk assessments that include forced labor, engaged stakeholders on forced labor, and integrated forced labor standards into its supplier contracts.

2016 BENCHMARK

71

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.

METHODOLOGY

2016

62

Apple was evaluated both in 2016, when it ranked second out of 20 companies, and in 2018, when it ranked third out of 40 companies. Despite a strengthened methodology which makes it harder to achieve the same score, it improved its score by ten points since 2016 (62/100 to 72/100). This is because it has stated that it undertook supply chain risk assessments that include forced labor, engaged stakeholders on forced labor, and integrated forced labor standards into its supplier contracts.

2016BENCHMARK

2018

71

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.

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, supply chain standards, management processes and board oversight, training programs, and engagement with stakeholders.

OVERALL 84
INDICATORS
Commitment
100
Supply Chain Standards
70
Management and Accountability
75
Training
100
Stakeholder Engagement
75

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, and assesses and discloses forced labor risks across its supply chains.

OVERALL 75
Traceability
75
Risk Assessment
75

Purchasing Practices

This theme assesses to what extent a company adopts responsible purchasing practices and integrates supply chain standards into supplier selection and supplier contracts. It also assesses the degree to which a company cascades their standards down its supply chains.

OVERALL 45
Purchasing Practices
30
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 76
Recruitment Approach
30
Recruitment Fees
100
Monitoring and Ethical Recruitment
100
Migrant Worker Rights
75

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 58
INDICATORS
Communication of Policies
50
Worker Voice
100
Freedom of Association
12.5
Grievance Mechanism
70

Monitoring

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

OVERALL 90
Auditing Process
100
Audit Disclosure
80

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 which 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 69
Corrective Action Plans
100
Remedy Programs and Response to Allegations
37.5

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