Understanding risk in global supply chains with the World Risk Poll

Responsible business membership organisation Sedex helps their members to map and understand their supply chains in order to operate and source more responsibly. Sedex’s technology and tools enable businesses to assess their suppliers and manage human rights and environmental risks in their supply networks.

Risk assessment is a critical part of this. Companies need to understand the various risks to human rights and the environment that can occur in industries and regions around the world, so they can take action to protect people, ecosystems and their own business from the risk of negative impact.

Radar: the Sedex risk assessment tool

Radar is Sedex’s comprehensive risk assessment and analysis tool. Businesses use Radar to understand what the most likely issues in their supply chains will be, even at the earliest stages of risk assessment. This allows their business to prioritise additional assessment, risk management, and improvement efforts depending on the most common or severe issues.

The tool works on two levels:

• Country and sector risk indications, based on third-party data including data from the World Risk Poll. Providing risk indication across 14 areas, from working hours to biodiversity, it helps companies understand the levels of inherent risk associated with countries and industries
• Supply chain and site-specific risk assessment. The tool combines inherent (country and sector) risk information with data from the suppliers connected to a business. This allows businesses that are Sedex members to identify suppliers operating in high-risk environments or with workers more vulnerable to labour exploitation, and to explore the risks associated with each individual site.

Incorporating World Risk Poll data to inform health and safety risk levels

Health and safety is one of the 14 areas in Radar, and one of the four core areas of a Sedex SMETA social audit. This is because businesses have an obligation to ensure safe, healthy workplaces that protect workers from physical and mental harm.

However, injuries and even deaths to workers can occur at work. The International Labour Organization (ILO) estimates that over 2.7 million people every year die as a result of occupational accidents or work-related disease.

Health and safety laws aren’t always enforced effectively, and some industries come with greater health and safety risks than others. For example, the ILO recognises agriculture, mining and construction as the three sectors that are most hazardous to workers.

Data from the World Risk Poll informs the health and safety risk indication scores in the Radar tool, where a higher score (on a scale of 0-10) indicates that workers are at a higher risk of exposure to dangerous and unhygienic working conditions.

In the screenshot here from the Sedex risk tool we see the risk indications for the mining and quarrying sector. There are global scores for each risk area, with “Health, safety & hygiene” showing as 6.7 (high risk), and the overall risk scores in different countries.

The World Risk Poll data points used in the Radar tool include:

• The proportions of people in different countries saying they have been injured at work
• The proportion of people in different countries who feel they can report safety issues to their employers without fear of punishment.

These measures support an overall picture of occupational health and safety in nations around the world.

“It’s essential that workers in supply chains are provided with a working environment safe from hazards, but we know that in reality standards often fall short of acceptable. Sedex tools help businesses to understand the countries and industry sectors that human rights issues are most likely to occur in.

“Data from the World Risk Poll enables Sedex members to identify where the risk of accidents and injuries is greater. They can then take steps to prevent and address occupational health and safety issues that may be occurring in their supply chains.”

Disclaimer: all blogs featured are the views of the author and not representative of Lloyd's Register Foundation.