EMPTY STATE
COMPARISON TOOL

Hitachi 39/100

(TSE:6501) 12 of 40 (2018)

Hitachi Ltd. (Hitachi), an electronic equipment company supplying to companies such as Hewlett Packard Enterprise and Intel, ranks 12th out of 40 companies. It discloses more information on its forced labor policies and practices than its peers on all themes except worker voice and remedy and is the highest scoring of the eight Japanese companies assessed. It has increased its score by five points since 2016 by joining the Responsible Business Alliance (RBA) and adopting the RBA code which prohibits worker-paid recruitment fees as its supplier code of conduct. It has also started to train its suppliers on modern slavery and requires first-tier suppliers to cascade its standards to lower-tier suppliers. The company has an opportunity to improve its performance and disclosure on the themes of recruitment, worker voice, and remedy.

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39 /100

2018 Ranking: 12 of 40

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34

Hitachi was evaluated both in 2016, when it ranked 12th out of 20 companies, and in 2018, when it ranked 12th out of 40 companies. Despite a strengthened methodology which makes it harder to achieve the same score, it increased its score by five points since 2016 to 39/100 by joining the Responsible Business Alliance (RBA) and adopting the RBA code as its supplier code of conduct which prohibits worker-paid recruitment fees. It has also started to train its suppliers on modern slavery and requires first-tier suppliers to cascade its standards to lower-tier suppliers. The company now ranks in the top half of the benchmark.

2016 BENCHMARK

39

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

34

Hitachi was evaluated both in 2016, when it ranked 12th out of 20 companies, and in 2018, when it ranked 12th out of 40 companies. Despite a strengthened methodology which makes it harder to achieve the same score, it increased its score by five points since 2016 to 39/100 by joining the Responsible Business Alliance (RBA) and adopting the RBA code as its supplier code of conduct which prohibits worker-paid recruitment fees. It has also started to train its suppliers on modern slavery and requires first-tier suppliers to cascade its standards to lower-tier suppliers. The company now ranks in the top half of the benchmark.

2016BENCHMARK

2018

39

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 38
Traceability
0
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
50
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 9
INDICATORS
Communication of Policies
25
Worker Voice
0
Freedom of Association
0
Grievance Mechanism
10

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 55
Auditing Process
80
Audit Disclosure
30

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 13
Corrective Action Plans
25
Remedy Programs and Response to Allegations
0

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