Introduction

The guide provides benchmarks for companies in three high-risk sectors—Apparel & Footwear, Food & Beverage, and ICT—offering insights into corporate practices and disclosure expectations. The guide is particularly relevant for decision-makers and teams looking to design or improve supply chain human rights programmes. Investors can use the guide to assess corporate disclosure and practices, especially as regulatory expectations around HRDD evolve.

The guide underscores the importance of transparency, robust human rights due diligence (HRDD), and proactive corporate engagement in mitigating labour rights abuses. It focuses on forced labour risks and broader worker abuses in supply chains, offering clear guidance and examples for companies to enhance their HRDD practices. The guide emphasises that adopting good practices does not have to come at the expense of profitability, and provides real-life examples of successful corporate initiatives.

Board oversight

Companies should mandate their board of directors or a specific board committee with overseeing labour rights policies in supply chains. The guide highlights that this oversight should be clear and specific, going beyond general references to sustainability or human rights. For example, Fast Retailing’s Human Rights Committee oversees its forced labour policies, including the investigation of violations and implementation of remedies. Coles actively monitors modern slavery risks through quarterly reports on its ethical sourcing programme.

Supply chain traceability and transparency

The guide stresses the importance of mapping all business entities in supply chains, including subcontractors. Companies should disclose the names and addresses of suppliers across all tiers of the supply chain, with updates every six months. Examples of good practice include Sainsbury’s and Deckers, which disclose detailed supplier information, and Puma, which provides a full list of sourcing countries for high-risk materials like leather. The guide recommends gradual expansion of supplier disclosure to enhance transparency and stakeholder confidence.

Risk assessment

A robust human rights risk assessment process is crucial for identifying and mitigating labour rights risks in supply chains. The guide advises companies to use a range of sources, including civil society reports, third-party data, and direct worker insights. Companies should prioritise risks that are most severe or where delayed response would make them irremediable. Woolworths Group’s assessment identified extreme forced labour risks in Malaysia and among migrant workers in China and Vietnam. The guide recommends that companies disclose how they conduct risk assessments and the specific risks identified.

Purchasing practices

The guide advocates for responsible purchasing practices that ensure fair wages and prevent precarious working conditions. Companies like Walmart and Asics have implemented strategies such as maintaining steady order volumes, effective planning, and prompt payment terms to support ethical practices. Cisco has taken steps to safeguard workers by separating labour costs from production costs, thereby protecting workers during periods of supply volatility.

Living wage

Encouraging companies to analyse wages in their supply chains against living wage benchmarks, the guide highlights the importance of ensuring that workers earn enough to cover the cost of living. H&M has disclosed average monthly wages at supplier factories in nine production countries, while Puma reports the percentage of workers paid a living wage in its key production locations. These practices demonstrate a commitment to fair compensation for workers in global supply chains.

Recruitment

The guide promotes the “Employer Pays Principle,” which ensures that workers are not burdened with recruitment fees. Companies like Puma and Woolworths have taken significant steps to facilitate the repayment of recruitment fees to workers in their supply chains, helping to alleviate debt and exploitation. Cisco has also worked with suppliers to remove healthcare examination costs from workers, further aligning with ethical recruitment practices.

Freedom of association and collective bargaining

The guide emphasises the importance of engaging with unions to enable freedom of association and collective bargaining in supply chains. Tesco and H&M have entered into agreements with unions to support workers’ rights in key supply chains, while Lululemon has disclosed the percentage of suppliers with collective bargaining agreements in place. These actions underscore the role of collective bargaining in improving working conditions and protecting workers’ rights.