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COMPARISON TOOL

Hitachi 34/100

(TYO:HTHIY) 12 of 20 (2016)

Hitachi LTD. (Hitachi) provides average disclosure of its policies and practices aimed at addressing human trafficking and forced labor risk in its supply chain, ranking twelfth on this benchmark overall. The company discloses several policies where it commits to addressing human trafficking and forced labor, including its business Code of Conduct and its Human Rights Policy. It also discloses relevant information in areas such as supply chain governance, training programs, and purchasing practices. Hitachi has an opportunity to improve its disclosure with respect to cascading its forced labor requirements beyond first-tier suppliers. Furthermore, the company may consider strengthening its approach to responsible recruitment practices in its supply chain and disclosing evidence that it ensures supply chain workers' voices are heard.

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34 /100

2016 Ranking: 12 of 20

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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.

METHODOLOGY

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.

2018 BENCHMARK

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.

METHODOLOGY

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.

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 73
INDICATORS
Awareness and Commitment
100
Supply Chain Standards
40
Management and Accountability
100
Training
50
Stakeholder Engagement
75

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 38
Traceability and Risk Assessment
50
Transparency
25

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 38
Purchasing Practices
50
Supplier Selection
100
Integration into Supplier Contracts
0
Cascading Standards through the Supply Chain
0

Recruitment

The company's approach to reducing exploitation by recruitment agencies and eliminating workers' payment of fees for their jobs.

OVERALL 0
Recruitment Approach
0
Recruitment Fees
0
Recruitment Audits
0

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 10
INDICATORS
Communication of Policies
0
Worker Voice
0
Worker Empowerment
0
Grievance Mechanism
40

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 13
Corrective Action Plans
25
Remedy Programs
0

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