The information challenge

1. The information challenge Using Information to measure and improve sustainability through the supply chain

2. Context “In 1975 approximately 80% of the value of the S&P 500 was based on tangible assets. By 2012 that had fallen to about 20%. “In other words, 80% of the value of today’s S&P 500 are things like brand reputationand loyalty – assets that can be destroyed overnight by failures in the supply chain, exposés for child labour and factory fires.” Martin Chilcott, CEO, 2Degrees

3. On 24 April 2013, RanaPlaza factory collapse, Bangladesh. 1,129 people died

4. Challenges – Lack of supply chain knowledge • March ‘14 survey results (IFF) • 80% of UK manufacturers aresure that their direct suppliers are not using slave labour • But only 47% are not sure about their tier 2 suppliers • 70% of are sure that their direct suppliers are not using child labour • But only 53% are not sure about their tier 2 suppliers • 57% are sure that tier 1 suppliers are not using conflict minerals • But this falls to 43% for tier 2 suppliers Reference: http://www.achilles.com/en/news/2783-ethics-gremlins-hiding-in-manufacturers-supply-chains

5. Challenges - Measurement? • Measurement is about • Gathering data • Checking data and converting it to trusted information • Maintaining the currency of the information • Scoringinformation to a context • Further verification of data through targeted audit

6. Challenges - Scoring? • To a procurers/buyers risk model • To an agreed community standard e.g. UVDB Verify • To an international standard e.g. iso 14065 • To interest-group or disclosure standards • E.g. for GRI, CDP etc • As data is scored a history of achieved scores is automaticallyavailable • Highlights positive or negative trends over a time period (by default, with Sustainability Model the latest year scores are compared with the previous years)

7. Challenges - Information Use? • Companies want to drive Sustainability improvement • Internally • How are they themselves changing? • How are their own sites performing? • How are they targeting improvements? • How successful are they at reducing costs/improving efficiency?

8. Challenges - Information Use? • Companies want to drive Sustainability improvement • Within their supply chain • How do their suppliers compare? • Are they improving? • What about other tiers of suppliers? • What about factory sites of other tiers? • What risks are present and unseen? • Provides evidence for Dow Jones/other indices and for other voluntary reporting

9. Solution Checklist • Ensure the information is searchable your way • Ensure compared information is comparable • Trust standards only to their scope • Information is for action • For you • Your suppliers • For general sustainability information ensure it is • Obtained at the organisation level – general risks and improvements • And obtained at a factory/site/office/mine level – detail diligence • Know your risks, and focus deep-diligence in these areas

10. Achilles for Sustainability? Our Resume • Delivering information to purchasers for 20 years • Deliveringfinancial data, CSR data, Carbon and GHG programmes, audit programmes and wider information sets for buyer/supplier communities • Deliveringrelevant facts on companies • Delivering in-depth validation of facts based on procurers risk models • Carbon Reduction – CEMARS • Prequalification audits – VERIFY • CSR audits – Environment and Social aspects

11. Jon Williams Jon.Williams@achilles.com Principal Product Manager