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Ericsson 55/100

(NASDAQ:ERIC) 6 of 20 (2016)

Ericsson demonstrates above average disclosure of its policies and practices for mitigating the risk of forced labor in its supply chain, ranking sixth on the benchmark overall. The company exhibits leading practice with respect to its purchasing practices, scoring the highest in this area compared to its peers. In addition, the company's overall ranking performance is driven by its commitment to addressing forced labor, a supply chain standard that supports this commitment, its processes for monitoring and auditing suppliers, and its remedy programs. To enhance its benchmark performance, Ericsson may consider improving its disclosure of its supply chain traceability and risk assessment processes, developing and disclosing a responsible approach to the recruitment of workers in its supply chain, and communicate its human trafficking and forced labor policies and standards to workers in the supply chain in their local languages.

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55 /100

2016 Ranking: 6 of 20

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55

Ericsson was evaluated both in 2016, when it ranked 6th out of 20 companies, and in 2018, when it ranked 11th out of 40 companies. The company's score decreased since 2016 from 55/100 to 46/100, as a strengthened methodology makes it harder to achieve the same score, and as the company seems to have taken limited steps to strengthen its performance and disclosure since 2016. It has, however, disclosed that in addition to undertaking country-specific human rights impact assessments, it also works to understand the geographic risks of modern slavery and maps supplier categories in relation to such risks.

METHODOLOGY

46

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

55

Ericsson was evaluated both in 2016, when it ranked 6th out of 20 companies, and in 2018, when it ranked 11th out of 40 companies. The company's score decreased since 2016 from 55/100 to 46/100, as a strengthened methodology makes it harder to achieve the same score, and as the company seems to have taken limited steps to strengthen its performance and disclosure since 2016. It has, however, disclosed that in addition to undertaking country-specific human rights impact assessments, it also works to understand the geographic risks of modern slavery and maps supplier categories in relation to such risks.

METHODOLOGY

2018

46

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 71
INDICATORS
Awareness and Commitment
100
Supply Chain Standards
80
Management and Accountability
50
Training
100
Stakeholder Engagement
25

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 88
Purchasing Practices
50
Supplier Selection
100
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
0
Recruitment Audits
50

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 33
INDICATORS
Communication of Policies
50
Worker Voice
0
Worker Empowerment
0
Grievance Mechanism
80

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 68
Auditing Process
75
Audit Disclosure
60

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 63
Corrective Action Plans
75
Remedy Programs
50

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