Measure legal, compliance and reputational risks relating to workers in your international supply chains.
"I really like this tool. It is a great way for businesses to start thinking about how they manage the compliance, ethical and reputational risks that sit in their supply chains. I especially like how the tool models effectiveness as the combination of measurement and response - and the budget optmizer is very impressive. Most people will find the model thought-provoking and it will lead them to review how their supply chain labour rights due diligence budget is being spent."
Lead Consulting Partner, Sustainability at a global consulting firm.
The app is only suitable for use on a desktop or laptop screen.
Why should you try out the app? Our free and sophisticated evaluation tool allows you to: - Use our default assumptions and get immediate results -Easily understand the baseline labor rights risks that affect your supply chains - Assess whether your strategies to manage those risks are effective and optimal - Understand how geographical changes to your sourcing strategy can influence the level of risk you have - Experiment and try out combinations of approaches to challenge whether your current strategy is optimal and to see the potential impact that alternative strategies might have Most importantly, the tool is totally and instantly responsive. Move a slider and the result changes instantly. Add a country and you can immediately see the effect. Switch in a new HRDD tool, you see what it achieves. You can use our tool straightaway. Our default assumptions will get you going. You can then change any assumption yourself to personalise the approach so it reflects your own views. Systems like this normally cost US$50k+ per year. Our app is free and a fully working system.
Is this the whole app? Yes. Our free app is gives you a full picture at a high level of your supply chain and the impact of the actions you take to manage your reputational and labour rights risks with suppliers. It is a sophisticated but simple tool that you can use to assess the impact your ethical sourcing / responsible sourcing team is delivering given the strategies that they are using. Moving forward. you should take professional advice from qualified consultants on supply chains and related management of reputational risks. Most consultants will advise that you should create a more detailed picture that runs at supplier-level rather than country-level, taking into account the specific situation, culture and operation of each supplier and the extent to which you (as a customer) have leverage in the relationship,
Why is the app free? We believe that this app can help companies to do a better job in managing their reputational risks and the labour rights risk in their supply chains. There is a direct link between the effectiveness of the actions that business takes and the impact that is achieved in working communities. This tool is designed to get you thinking clearly about what you currently do, and whether there are more effective strategies you could take without increasing your efforts or budgets.
Methodology: Global Risk Countries are assigned a risk level where 100 is very risky and 0 is no risk. The risk level is derived from indices published by well-known international organisations commenting on relevant risk factors: ITUC is the International Trade Union Confederation. Their Global Rights Index is available here and is their view of the extent to which worker rights are being violated: https://www.ituc-csi.org/global-rights-index Transparency International publishes an annual "Corruption Perceptions Index" which measures the extent to which corruption is part of the way a country's society operates: https://www.transparency.org/en/cpi/2024 The International Labor Organisation (ILO) publishes extensive statistics on working populations and the level of non-citizens of working age in each country. Migrant workers are often subject to greater risk of rights abuse than nationals: https://ilostat.ilo.org/methods/concepts-and-definitions/description-international-labour-migration-statistics/ WJP is the World Justic Project and they publish indices by country that reflect how the rule of law is properly observed. The measure that is used here is measure 4.8 which specifically looks at the extent to which fundamental labour rights are effectively guaranteed: https://worldjusticeproject.org/rule-of-law-index/global/2024/Fundamental%20Rights/ Walk Free is a not-for-profit organisation focussing on reducing modern slavery around the world. Their index assesses the prevalence of modern slavery in every country: https://www.walkfree.org/global-slavery-index/ These indices work in slightly different ways, so the data has been normalised to a range between 0 and 100 (0 is good, 100 is bad) to enable their inputs to be used simply within the model. Users can use the sliders on panel 1 to change the weightings for the indices to create their own global risks map. If there is no data for a country, the country is not shown in the map.
Methdology: Baseline Risk The baseline risk is calculated by the user selecting sourcing countries from the map or using the country selector. Clicking on a country on the map will select it. There are zoom buttons on the left hand size enabling the map to be made larger. As a default, each country is given a weighting of 10 when selected. The calculations will work if this is left un-changed, and the resulting baseline risk will be the average of the countries selected. If the user wants to be more sophisticated, then the weighting can be raised or lowered reflecting the contribution of that country to the overall supply chain. If this is done, then the resulting baseline risk becomes the average weighted by those weightings. A country with a higher weighting will have a larger influence on the resulting baseline risk. Users might choose different weightings based on: - The value of goods and services being sourced from the country - The number of suppliers - The number of workers
Methdology: from Baseline Risk to Managed Risk Businesses have two decisions to make when it comes to managing their reputation risk in supply chains and their labour rights due diligence processes: What due diligence to carry out? (Panel 3 - HRDD strategy) How to react if issues are found? (Panel 4 - Response strategy) Simply put, the effectiveness of the overall approach is a function of these two elements - which, in combination, can reduce the risk level experienced by the business to the "managed risk" outcome indicated.
Panel 3: HRDD strategy We provide 6 options for the tools available, grouped into 3 categories: - Worker voice (continuous or survey) - Audit (surprise audits arranged externally, or self-arranged/announced to the supplier) - Passive (self-assessment questionnaires that suppliers fill in, or desktop analysis done remotely) Users use the sliders to indicate, for each tool individually, how much of their supply chain is covered by it. If 100% of the supply chain is covered by a given tool, the slider would move all the way to the right. If the tool is not used, the slider would move all the way to the left. Tools are assumed to be used in an overlapping manner - so there is no requirement for numbers to add up to 100% - the maximum total is theoretically 600% (all tools used with all suppliers) and the minimum is 0% (no tools used at all). For each tool, on the right hand side, the user can determine how effective that tool is at detecting issues. The more effective the process at detecting issues, the more the risks are being managed - and the more likely it is (provided responses are appropriate) that labour rights abuses will be lower. Users can make up their own minds about how effective different approaches are by moving the sliders on the right side. The only real data available in the public domain typically indicates that audits and supplier-controlled processes (questionnaires or self-arranged audits) are ineffective. At the bottom of the panel is a slider that influences the disposition of effort across countries by risk. If efforts are focussed on high risk countries, then move the slider towards the right. This would be typical.
Panel 4: Response strategy This is the "management" part of managing the labour rights risks in the supply chain. How a business responds to issues that may be found in it is supply chains is a critical factor in the level of risk it will be experience. A lack of action, especially if a supplier knows that that business is aware, will encourage further abuses. On the left hand side, users can use the sliders to indicate the different strategies that are used to deal with issues that are uncovered in the supply chain via whatever tool is used. Note that real-time dashboards are typically only available with continuous worker voice - so users should recognise that the setting of the top left slider should take into account the amount of continuous monitoring that is indicated on the previous Panel 3. On the right hand side, the sliders are used to indicate how effective a given response strategy is at dealing with issues raised and, more importantly, encouraging suppliers to behave properly (ie: observing the relevant laws) towards their workers. If businesses are not effectively dealing with issues, risks are elevated.
Panel 5: results - from Baseline Risk to Managed Risk The methodologies used are broadly based on the principle that effective transparency coupled with effective response results in risks being managed and therefore managed risks being reduced from the baseline. Panel 5 summarises your assumptions and shows you how the different elements in your strategy (HRDD and response) are impacting the risks you have ended up with - your "managed risk". Theoretically, tools which are capable of detecting all the risks, coupled with responses that deal with those risks in real time, will result in managed risks being very substantially lower than baseline risks. The model is set up that risks never become zero, as there are limits on what can be achieved in practice. There are two important mathematical adjustments made in the model: The overall effectiveness of the HRDD tools (panel 3) is determined using an aggregating model with diminishing returns. What this means is that doing more does deliver further positive results but the effectiveness of incremental efforts reduces as more effort is applied. This reflects the fact that tools are used in combination in the real world. As mentioned above, most businesses tend to prioritise their efforts on higher risk locations - where the tools have a greater impact. This is driven by the slider at the bottom of panel 3 and results in the "focus multiplier" on panel 5.