EMPTY STATE
COMPARISON TOOL

Applied Materials 27/100

(NasdaqGS:AMAT) 23 of 40 (2018)

Applied Materials Inc. (Applied Materials), a semiconductor equipment supplier to companies such as Intel, ranks 23rd out of 40 companies. It discloses more information on its forced labor policies and practices than its peers on the theme of commitment and governance and recruitment, and some information on all other themes. 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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27 /100

2018 Ranking: 23 of 40

HOW DO THEY COMPARE?

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27

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

2018

27

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 65
INDICATORS
Commitment
100
Supply Chain Standards
100
Management and Accountability
50
Training
50
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, and assesses and discloses forced labor risks across its supply chains.

OVERALL 19
Traceability
37.5
Risk Assessment
0

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 29
Purchasing Practices
15
Supplier Selection
0
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 31
Recruitment Approach
0
Recruitment Fees
75
Monitoring and Ethical Recruitment
0
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 18
INDICATORS
Communication of Policies
50
Worker Voice
0
Freedom of Association
0
Grievance Mechanism
20

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 10
Auditing Process
10
Audit Disclosure
10

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 19
Corrective Action Plans
37.5
Remedy Programs and Response to Allegations
0

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