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COMPARISON TOOL

Cisco Systems 51/100

(NasdaqGS:CSCO) 9 of 40 (2018)

Cisco Systems Inc. (Cisco) ranks ninth out of 40 companies, disclosing more information on its forced labor policies and practices than its peers across all themes, including particularly strong scores on the themes of commitment and governance and monitoring. It has improved its score since 2016 by disclosing and implementing the human rights risk assessment which it said it was developing in 2016. Notably, the company disclosed a commitment to assess additional lower-tier suppliers. Further steps the company could take to address forced labor risks in its supply chains include strengthening its disclosure and practices on the themes of recruitment, worker voice, and remedy.

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51 /100

2018 Ranking: 9 of 40

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58

Cisco was evaluated both in 2016, when it ranked 4th out of 20 companies, and in 2018, when it ranked 9th out of 40 companies. Compared to 2016, the company decreased its score from 58/100 to 51/100. However, a strengthened methodology makes it harder to achieve the same score, and since 2016 the company in fact improved by disclosing and implementing the human rights risk assessment which it said it was developing in 2016.

2016 BENCHMARK

51

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

58

Cisco was evaluated both in 2016, when it ranked 4th out of 20 companies, and in 2018, when it ranked 9th out of 40 companies. Compared to 2016, the company decreased its score from 58/100 to 51/100. However, a strengthened methodology makes it harder to achieve the same score, and since 2016 the company in fact improved by disclosing and implementing the human rights risk assessment which it said it was developing in 2016.

2016BENCHMARK

2018

51

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 81
INDICATORS
Commitment
100
Supply Chain Standards
80
Management and Accountability
75
Training
75
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 56
Traceability
37.5
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 58
Purchasing Practices
30
Supplier Selection
50
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 38
Recruitment Approach
0
Recruitment Fees
75
Monitoring and Ethical Recruitment
25
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 20
INDICATORS
Communication of Policies
50
Worker Voice
0
Freedom of Association
0
Grievance Mechanism
30

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 70
Auditing Process
100
Audit Disclosure
40

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 38
Corrective Action Plans
75
Remedy Programs and Response to Allegations
0

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