GRI 414: Supplier Social Assessment 2016
EFFECTIVE DATE: 1 JULY 2018
Introduction
GRI 414: Supplier Social Assessment 2016 contains disclosures for organizations to report information about their social impacts in their supply chain, and how they manage these impacts. The disclosures enable an organization to provide information on its approach to preventing and mitigating negative social impacts in its supply chain.
The Standard is structured as follows:
- Section 1 contains a requirement, which provides information about how the organization manages its social impacts in its supply chain.
- Section 2 contains two disclosures, which provide information about the organization’s supplier assessment and social impacts in its supply chain.
- The Glossary contains defined terms with a specific meaning when used in the GRI Standards. The terms are underlined in the text of the GRI Standards and linked to the definitions.
- The Biblogrpahy lists authoritative intergovernmental instruments and additional references used in developing this Standard.
Background on the topic
This Standard addresses the topic of supplier social assessment.
An organization may be involved with negative social impacts either through its own activities or as a result of its business relationships with other parties. Due diligence is expected of an organization in order to prevent, mitigate, and address actual and potential negative social impacts in the supply chain. These include negative impacts the organization either causes or contributes to, or that are directly linked to its operations, products, or services by its relationship with a supplier.
These concepts are covered in key instruments of the United Nations: see the Bibliography.
Suppliers can be assessed for a range of social criteria, including human rights (such as child labor and forced or compulsory labor); employment practices; health and safety practices; industrial relations; incidents (such as of abuse, coercion or harassment); wages and compensation; and working hours. Some of these criteria are covered in other GRI Topic Standards (e.g., GRI 401: Employment 2016, GRI 403: Occupational Health and Safety 2018, GRI 408: Child Labor 2016, GRI 409: Forced or Compulsory Labor 2016).
1. Topic management disclosures
An organization reporting in accordance with the GRI Standards is required to report how it manages each of its material topics.
An organization that has determined supplier social assessment to be a material topic is required to report how it manages the topic using Disclosure 3-3 in GRI 3: Material Topics 2021 (see clause 1.1 in this section).
This section is therefore designed to supplement – and not replace – Disclosure 3-3 in GRI 3.
REQUIREMENTS
- 1.1 The reporting organization shall report how it manages supplier social assessment using Disclosure 3-3 in GRI 3: Material Topics 2021.
Guidance
The reporting organization can also disclose:
- the systems used to screen new suppliers using social criteria, and a list of the social criteria used to screen new suppliers;
- processes used, such as due diligence, to identify and assess significant actual and potential negative social impacts in the supply chain;
- how the organization identifies and prioritizes suppliers for assessment of social impacts; actions taken to address the significant actual and potential negative social impacts identified in the supply chain and whether the actions are intended to prevent, mitigate, or remediate the impacts;
- how expectations are established and defined in contracts with suppliers to promote the prevention, mitigation, and remediation of significant actual and potential negative social impacts, including targets and objectives;
- whether suppliers are incentivized and rewarded for the prevention, mitigation, and remediation of significant actual and potential negative social impacts;
- practices for assessing and auditing suppliers and their products and services using social criteria;
- a list of the type, system, scope, frequency, current implementation of assessment and audit, and which parts of the supply chain have been certified and audited;
- the systems in place to assess the potential negative impacts of terminating a relationship with a supplier as a result of assessing the supplier for social impacts, and the organization’s strategy to mitigate those impacts.
Social criteria or assessments of suppliers for social impacts can include the topics covered in other GRI Topic Standards (e.g., GRI 401: Employment 2016, GRI 403: Occupational Health and Safety 2018, GRI 408: Child Labor 2016, GRI 409: Forced or Compulsory Labor 2016).
Negative impacts can include those that are either caused or contributed to by an organization, or that are directly linked to its operations, products, or services by its relationship with a supplier.
Assessments can be informed by audits, contractual reviews, two-way engagement, and complaint and grievance mechanisms.
Actions taken to address social impacts can include changing an organization’s procurement practices, adjusting performance expectations, capacity building, training, changes to processes, as well as terminating supplier relationships.
Assessments and audits of suppliers and their products and services using social criteria can be undertaken by an organization, by a second party, or by a third party.
2. Topic disclosures
Disclosure 414-1 New suppliers that were screened using social criteria
REQUIREMENTS
The reporting organization shall report the following information:
- a. Percentage of new suppliers that were screened using social criteria.
GUIDANCE
Guidance for Disclosure 414-1
Social criteria can include the topics covered in other GRI Topic Standards (e.g., GRI 401: Employment 2016, GRI 403: Occupational Health and Safety 2018, GRI 408: Child Labor 2016, GRI 409: Forced or Compulsory Labor 2016).
Background
This disclosure informs stakeholders about the percentage of suppliers selected or contracted subject to due diligence processes for social impacts.
An organization is expected to initiate due diligence as early as possible in the development of a new relationship with a supplier.
Impacts may be prevented or mitigated at the stage of structuring contracts or other agreements, as well as via ongoing collaboration with suppliers.
Disclosure 414-2 Negative social impacts in the supply chain and actions taken
REQUIREMENTS
The reporting organization shall report the following information:
- a. Number of suppliers assessed for social impacts.
- b. Number of suppliers identified as having significant actual and potential negative social impacts.
- c. Significant actual and potential negative social impacts identified in the supply chain.
- d. Percentage of suppliers identified as having significant actual and potential negative social impacts with which improvements were agreed upon as a result of assessment.
- e. Percentage of suppliers identified as having significant actual and potential negative social impacts with which relationships were terminated as a result of assessment, and why.
RECOMMENDATIONS
- 2.1 When compiling the information specified in Disclosure 414-2, the reporting organization should, where it provides appropriate context on significant impacts, provide a breakdown of the information by:
- 2.1.1 the location of the supplier;
- 2.1.2 the significant actual and potential negative social impact.
GUIDANCE
Guidance for Disclosure 414-2
Negative impacts include those that are either caused or contributed to by an organization, or that are directly linked to its operations, products, or services by its relationship with a supplier.
Assessments for social impacts can include the topics covered in other GRI Topic Standards (e.g., GRI 401: Employment 2016, GRI 403: Occupational Health and Safety 2018, GRI 408: Child Labor 2016, GRI 409: Forced or Compulsory Labor 2016).
Assessments can be made against agreed performance expectations that are set and communicated to the suppliers prior to the assessment.
Assessments can be informed by audits, contractual reviews, two-way engagement, and complaint and grievance mechanisms.
Improvements can include changing an organization’s procurement practices, the adjustment of performance expectations, capacity building, training, and changes to processes.
Background
This disclosure informs stakeholders about an organization’s awareness of significant actual and potential negative social impacts in the supply chain.
Bibliography
This section lists authoritative intergovernmental instruments and additional references used in developing this Standard.
Authoritative instruments:
- United Nations (UN), ‘Guiding Principles on Business and Human Rights, Implementing the United Nations “Protect, Respect and Remedy” Framework’, 2011.
- United Nations (UN), Protect, Respect and Remedy: a Framework for Business and Human Rights, 2008.
- United Nations (UN), Report of the Special Representative of the Secretary-General on the Issue of Human Rights and Transnational Corporations and Other Business Enterprises, John Ruggie, 2011.
- United Nations Global Compact, Global Compact Business Guide for Conflict Impact Assessment and Risk Management, 2002.
- United Nations Global Compact and Principles for Responsible Investment (PRI), Guidance on Responsible Business in Conflict-Affected and High-Risk Areas: A Resource for Companies and Investors, 2010.