3.1 Purchasing Practices
About the data
KnowTheChain benchmarks current corporate practices, develops insights, and provides practical resources that inform investor decisions and enable companies to comply with growing legal obligations while operating more transparently and responsibly.
The KnowTheChain benchmarks aim to help companies protect the wellbeing of workers by incentivizing companies and identifying gaps in each sector evaluated.
The KnowTheChain methodology is based on the UN Guiding Principles on Business and Human Rights and covers policy commitments, due diligence, and remedy. The methodology uses the ILO core labor standards (which cover the human rights that the ILO has declared to be fundamental rights at work: freedom of association, the right to collective bargaining, and the elimination of forced labor, child labor, and discrimination) as a baseline standard. The methodology has been developed through consultation with a wide range of stakeholders and a review of other benchmarks, frameworks, and guidelines such as the OECD Due Diligence Guidance on Responsible Business Conduct.
Methodology
The company is taking steps toward responsible raw materials sourcing. Further, it is adopting responsible purchasing practices in the first tier of its supply chains, which it demonstrates through disclosing quantitative data points and providing procurement incentives to first-tier suppliers to encourage or reward good labor practices. Purchasing practices and pricing may both positively impact labor standards in the company's supply chains and increase risks of forced labor and human trafficking. The company:
(1) is taking steps toward responsible raw materials sourcing;
(2) is adopting responsible purchasing practices in the first tier of its supply chains, which include planning and forecasting;
(3) provides procurement incentives to first-tier suppliers to encourage or reward good labor practices (such as price premiums, increased orders, and longer-term contracts); and
(4) discloses two quantitative data points demonstrating that it has responsible purchasing practices in place that address the risk of forced labor and human trafficking.