NGO Recommends Going Beyond Conflict Minerals Compliance
NGO rankings/ratings, regardless of the subject matter, always heighten program manager’s and even board room senses. Will the work that I, as the program manager, did for my company to comply be represented well? Will the level of compliance we, as the board room, decided to have, be enough for the NGO? Responsible Sourcing Network (RSN), in response to their recent report ranking 155 large cap companies for conflict minerals, discloses their intention of their efforts to identify trends and determine areas for improvement among companies, with the ultimate goal to encourage all companies to develop a robust conflict minerals program.
Responsible Sourcing Network, in their report, Mining the Disclosures: An Investor to Conflict Minerals Reporting In Year Two utilizes 21 indicators in 5 measurement areas to guide improvement: Commit, Assess, Respond, Report, Impact. Their report establishes key performance indicators (KPIs) for social performance; compares data to a baseline and rankings within industry groups; and, demonstrates how companies are rewarded for transparency.
In the recent webinar with RSN and Source Intelligence, Andrew Arriaga, Lead Report Author, discusses that across the board there is significant improvement to be had in “relationship building”. What exactly does that mean? He uses the example of supplier unresponsiveness as an area for improvement. The current process for many companies is to do the minimum per Dodd-Frank 1502 compliance. So, if a company has made auditable efforts to contact a supplier, and that supplier will not respond, a company technically has completed their due diligence. However, Arriaga suggests companies go beyond compliance by determining where information in the supply chain is missing. When there is a smelter a part of a company’s supply chain that is not on a list, when a supplier is unresponsive, it is important to seek to fill in the information gaps.
In addition, a key takeaway from the webinar is if a company is doing something that is not being reported or disclosed, that effort will not be judged and make it into RSN’s rankings report. So, for reporting year 2015 (or year three of conflict minerals reporting), it is encouraged companies offer full disclosure of their efforts and process to first identify where/if conflict minerals exist in the supply chain and secondly, to act on those findings.
The Responsible Sourcing Network Mining the Disclosures report is available here for download. Full access to the recent webinar is available here. The webinar is a must see as RSN and Source Intelligence provide a detailed look into current efforts by major publicly traded companies to meet or exceed investor expectations for responsible sourcing and regulatory requirements.
