- Step 1: Engage Stakeholders and Partners
- Step 2: Assess risks and impacts
- Step 3: Develop code of conduct
- Step 4: Communicate and Train across your supply chain
- Step 5: Monitor compliance
- Step 6: Remediate violations
- Step 7: Independent review
- Step 8: Report performance
What to Include in Public Reporting
Public reports should include a description and discussion of all elements of the social compliance system, from the code of conduct, to community and multi-stakeholder involvement, risk assessment, training, auditing, remediation, independent verification and efforts to address root causes. Reports should also discuss the implementing environments in which the company’s social compliance system operates, and the challenges in those environments. Many social compliance reports also highlight the various individuals and organizations partnering with the company to help achieve the program’s goals.
Reports should be written in straightforward language that diverse audiences can understand and translated into relevant languages. They should present the aspects of the system that are working well, and also the elements that have been less successful, including lessons learned and plans for improvement. Being open about weaknesses while showing that your company understands and is actively addressing them is an important aspect of accountability in public reports.
It is important that public reporting, while maximizing transparency, at the same time avoids posing any risks to specific individuals or organizations. This could include workers, suppliers and other stakeholders. It is also important to keep in mind commercial confidentiality considerations.
If your social compliance report is embedded within a larger company sustainability or CSR report, guidance is available for developing such reports. A recommended resource is the Global Reporting Initiative (GRI), a network-based organization that produces a reporting framework widely used by companies around the world. The GRI framework sets out principles and performance indicators for reporting on companies’ environmental, social and governance performance. The framework is developed through multi-stakeholder, consensus-building process that includes business, civil society, labor, and academic and professional institutions. GRI makes available a database of company CSR and sustainability reports for free public use.
It should be noted that the GRI framework currently has limited indicators that are relevant for reporting on supply chains, but a GRI working group is developing recommendations for improved supply chain indicators to be included in the fourth generation of the GRI Guidelines (expected to be issued in spring 2013).
Ceres, the nonprofit that launched the GRI and continues to lead a group of investors and civil society organizations to engage companies to address social and environmental challenges, gives annual awards for social responsibility reporting. The award judging criteria are focused on completeness, credibility and communication style of public reports.
Below are some general guidelines on content to include in a social compliance report:
- A description of the risk assessment and due diligence processes your company undertakes in its supply chains.
- The countries from which your company sources. If there are countries where particular child labor or forced labor issues have been prevalent, these situations should be discussed.
- Your suppliers. For example, electronics company Hewlett-Packard has made its supplier list public since 2007.
- The factories/farms/mines from which you and/or your suppliers source. Publication of factory lists is a growing trend for many companies pursuing greater social and environmental responsibility. For example, outdoor sports gear retailer Patagonia publishes a list of the factories producing its products as well as an interactive map showing factory name, address, goods produced, languages spoken, and the number of employees by gender.
- The metrics or Key Performance Indicators (KPIs) your social compliance program uses to measure progress, and your performance against those metrics. When calculating performance against metrics, it is important for many companies to segregate performance within the company from performance in the company’s supply chain. Aggregating the two can mask the realities of supply chain performance.
Monsanto: Human Rights Metrics for Child Labor in Hybrid Cottonseed Production
Agricultural company Monsanto publishes data on its website on its human rights metrics to measure progress against child labor in hybrid cottonseed production in India. The metrics include the percentage of child labor in hybrid cottonseed production in India (showing change over time); the percentage of child labor in India by state; the number of Monsanto’s contract growers who are trained in Monsanto’s anti-child labor policies; and the number of employee handbooks distributed. The percentage of child labor in hybrid cottonseed production metric is based on audit data from Monsanto’s third-party auditors.
For more information, see Monsanto’s Human Rights Metrics.
- Your code of conduct, and the areas of your supply chain it covers, including any reviews or updates to the code that have occurred in the reporting period.
- A description of your engagement with stakeholders and local communities, including multi-stakeholder groups with which you are involved, outreach as part of your risk assessment, other outreach and grievance mechanisms. For example, the Timberland Company’s 2008-2009 social responsibility report won the CERES-ACCA 2009 Award for Best Sustainability Report in part for offering stakeholders new opportunities to engage with the organization on a range of issues. Seventh Generation’s website reports to the public on issues raised during stakeholder consultations and the steps the company has taken to improve.
- An overview of your social compliance training programs throughout your supply chains.
- Social audit data. This data should be as comprehensive and specific as possible. Some companies publish full audit reports, while others aggregate audit data and publish it in compiled form. For example, the FLA publishes “Tracking Charts” on its website that contain complete data from every audit carried out on factories, as well as the actions taken by FLA-affiliated companies to address the findings. The Hennes & Mauritz (H&M) website provides Supply Chain Data reports which include the number of audits conducted, percentage of unannounced audits, supplier scores and other data.
- A description of your remediation policies when violations are found.
Nike: Reporting on Remediation
In 2008, media reports put a spotlight on Hytex Apparel, Inc., a Malaysian company contracting with Nike, Inc. The reports focused on mistreatment of hundreds of migrant workers. Nike investigated and found that although Hytex was not breaking any of Malaysian immigration law, the dormitories for workers did not meet Nike’s standards. In addition, several of Hytex’s practices, including wage garnishment and withholding of personal documents such as passports, were in violation of Nike’s supplier code of conduct even if not of national law.
Nike worked with Hytex to return documents to workers, repay workers their garnished wages and improve the dormitories. Hytex also agreed to cover expenses for workers who wanted to return to their home countries. The situation with Hytex spurred Nike to develop its current policies and code provisions on migrant labor.
For more information, see Nike’s Hytex case study.
- Results from your independent verification assessment, and a discussion of how you are integrating and responding to those findings.
- Information on internal oversight and accountability for the social compliance program, including to clarify who is responsible for the program, and the Board and CEO’s levels of involvement.
- A discussion of the challenges your social compliance program faces, lessons learned, as well as your efforts to address root causes of labor abuse.
Mattel: Advancements and Remaining Challenges
“We acknowledge that the management of working hours in factories in China continues to be a challenge for Mattel as it is for many companies. In order to make progress on this issue we must actively engage with multiple stakeholders to find solutions that address the root causes of periods of excessive working hours. In order to achieve sustained progress it is necessary to promote a solution that ensures:
• Proper payment of wages
• All overtime being voluntary
• Continuous improvement
• Progress on implementing transparency
Although challenges remain, we believe progress continues to be made. ICTI CARE (the International Council of Toy Industries’ Caring, Awareness, Responsible, Ethical Program) has contributed to progress by promoting dialogue about the root causes with NGOs, retailers and licensors.”
Source: Mattel, Playing Responsibly: 2009 Global Citizenship Report.
- Case studies or highlights of specific activities during the reporting period.
- Procedures for providing feedback on the report.
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