Labor Solutions has proven the value proposition for our tools in every geographic market and a variety of manufacturing, packaging, and mining supply chains. From China to Chile and from the UK to South Africa our clients cover the globe, and we know that our tools are useful not just for factories, but for all kinds of multi-tier relationships, including commodities. But communities surrounding the production facilities, farming, and mining of commodities and products are often the most vulnerable, hardest to reach, and least likely to be engaged. Labor Solutions knew that responsibly and effectively collecting feedback from these communities and landscapes required a strong partnership with leaders in environmental conservation. "Collecting reliable data requires building trust with people and we take the responsibility associated with that trust seriously. We believe if we ask a question about issues of human rights we, or our partners, need to have the tools to address the issue and reach remedy," says Elena Fanjul-Debnam, CEO of Labor Solutions. LandScale, an initiative of Rainforest Alliance, Verra and Conservation International, and other partners, seeks to drive improvements at scale by making reliable information about landscape sustainability widely available to decision-makers. LandScale wants to include human rights and development in its data sets. To do this they turned to Labor Solutions. We are leveraging our partnerships to pilot worker surveys in new markets and networks, and are very excited to be working with Rainforest Alliance's LandScale initiative to put our surveys to work across whole geographic regions, not just specific agricultural supply chains and facilities. We piloted this approach in two areas initially, in Peru and Ecuador, and will continue to expand the use of these LandScale surveys incorporating our initial learnings. By deploying our surveys to assess human rights and well-being indicators across a whole region, we can better identify human rights issues and environmental risks that may have complex root causes with the involvement of surrounding communities, and can leverage these results to bring in additional investment and resources from organizations and companies who source from them to address issues holistically. We see great potential for expanding our tools and services deeper into multi-tier supply chains and involving surrounding communities to identify potential environmental and human rights risks early before significant damage occurs, and we look forward to sharing the initial results of our work with LandScale in the next few months. Labor Solutions' platform WOVO Engage is a worker survey platform designed specifically for complex supply chains, including the agricultural sector. In the past decade, Labor Solutions has never concluded a survey without reaching the predetermined sample size - check out how we About LandScale: LandScale is a collaborative effort to drive improvements at scale by making reliable information about landscape sustainability widely available to decision-makers. We envision a future where people, nature, and business prosper through sustainable landscape management. Since 2019, LandScale has been working to develop a practical yet robust system for credible and consistent assessment and communication of landscape sustainability performance. Labor Solutions, an impact-focused business, leverages technology to connect, engage, and educate workers to build resilient supply chains. Over a million and a half workers in 25 countries have access to Labor Solutions’ worker engagement platform, WOVO.

Background An apparel factory in China had a high turnover rate of almost 20% per month. In an effort to better communicate with their employees and reduce turnover, managers decided to implement WOVO. Progress Within 6 months of implementation, managers at the factory had already noticed a change in their ability to understand the needs of their employees. Senior management observed “a direct link between turnover rate in a department and the number of employee questions and complaints from that department.” Through the platform’s streamlined communications functions, management was able to quickly identify causes of turnover in each department. Outcome In one department, with a turnover rate of 35% per month, there were a lot of questions and complaints about paychecks, but often before the paycheck had been issued. When senior managers carefully reviewed the worker feedback from this department, they were able to discern that the department manager was threatening workers, saying he would reduce their paycheck if they did not obey his orders, when in fact, he did not have that authority. Senior management was able to conduct an investigation and quickly remove this manager. Consequently, turnover was cut in half. In another department with a high turnover rate, managers noticed that many of the messages they were receiving were related to working hours. When they examined the issue, they discovered that on average this particular department had more overtime hours than the other departments. While employees liked the extra pay that comes with overtime, they felt that the amount of overtime was more than they could handle. Although managers could not reduce the number of overtime hours, they were able to shift workers around, so that the same workers were not always on this line. The overtime was more evenly distributed, and the workers were happier. The factory saw a decrease in the number of overtime complaints and an overall decrease in turnover of 30% across the factory

Background: Indonesia law requires that employers provide a 13th month's salary to all employees the month of their religious holiday. This bonus is very important and highly anticipated. It funds employees’ trips back to their family home and the presents that they are expected to bear. So a mistake in the timing of this bonus can cause serious issues for a facility. The Problem: A shoe factory that uses the WOVO platform in Indonesia noticed that it had received an extraordinary number of complaints about payroll. This facility, a factory of 10,000 employees, typically received no more than 10 questions or complaints a day about payroll, but this day, two days before the long holiday, Eid, management had received 50 messages by lunch. Everyone was complaining about not receiving bonuses before Eid. That year payroll had been centralized and was being calculated at the headquarters in Korea. Management in the Indonesian facility was able to reach out to the Korean team. They quickly realized that they had made a mistake. They had planned to send out the bonus at the end of the month, but the beginning of Eid was before the end of the month, and so the bonuses should have been included in the previous month’s paychecks. The Solution: The factory was able to quickly remedy this mistake by sending broadcast messages to all employees letting them know of the mistake and that the company was issuing a midmonth paycheck with the bonus. The factory management believes that because it quickly discovered its mistake and was able to immediately communicate with all employees, they were able to avoid a potential strike.

This case study was originally published in August 2020, since the publication of this case study more results have been made available and are included below. In 2019, a study group that included Labor Solutions, Shahi Exports, The Children’s Place, and The Good Business Lab (GBL) conducted a study using Labor Solutions’ WOVO tool in two Shahi factories employing 7,500 workers over four months. The study sought to understand the impacts of introducing the WOVO worker voice program in Shahi factories. Baseline: Prior to launching the tools, GBL conducted a baseline study, finding that: 20% of workers reported facing an issue in the last 6 months. Of those, 40% did not report the issue to management because they scared negative repercussions and did not know who to approach. Of those who did report an issue only 50% reported hearing back from management. It was clear that a new communication system was necessary. But local human resource teams were dubious about implementing the new system, scared that a new form of transparency would make their jobs more difficult and would be shared with clients. The Study: Participating workers were broken into control and variable groups. Workers in the variable group were trained and given access to WOVO’s connect feature via SMS, allowing them to anonymously send SMS-messages to management. Management received those messages using the WOVO online dashboard, which allowed them to sort, manage and respond to messages quickly and efficiently. Users from the management team were also able to pull aggregated data from the dashboard to track demographic trends, for example, top complaints per department. Once WOVO was launched, messages began pouring in. The highest number of cases concerned banking and the Provident Fund. While, these cases weren't grievances, WOVO was immensely helpful in workers understand their pay and the formal banking sector, which prevented escalation and grievances later. Still, a majority of cases were grievances and included issues like working hours and overtime, factory temperature, conflict with supervisor and sexual harassment. WOVO, is a tool, not a service. While WOVO is effective at gathering and disseminating information, more important for long-term success and positive culture change is how management responds and reacts to that information. Therefore, the results of the study are as representative of the Shahi management’s response to the data as they are of the results of WOVO’s use in the study. For WOVO and similar tools like it to be successful, stakeholder engagement is key. As a result, the study partners were equally interested in the quantitative results that WOVO could provide. The study also focused on the successes and challenges of implementation, stakeholder management, and worker and management’s overall impression of the increased dialogue between stakeholders in the factory settings. Findings: 780% increase in worker engagement and feedback Despite the short study period of only four months, the results demonstrate the very positive impacts of using tools like WOVO to boost worker engagement in factory settings. The study found WOVO users (the study’s variable group) reported: A 5% decrease in absenteeism 780% increase in worker engagement and feedback Workers were 9 times more likely to use WOVO than a traditional grievance channels, like boxes, and ‘open door policy.’ Surveys with workers and management showed that those users found WOVO to be easy to use and that it brought a positive change in the work culture. Almost all workers owned a phone or had access to a phone. However, only 50% had a smartphone, indicating that in India SMS continues to be a critical functionality to make available to workers in WOVO facilities. The Shahi human resources team found that the data and insights provided by WOVO allowed them to be more effective at understanding and responding to workers’ needs. The results show that more workers used WOVO than traditional communication tools provided by the facility. With more information and direct communication and better reporting tools, the human resources team was able to respond to issues faster, monitor and track results, get feedback, and in some cases adjust their follow-up responses in an appropriate manner. A majority of HR staff felt that WOVO brought a positive change in HR culture. They felt an increase in proactiveness to solve grievances and a better connection with the workers Many felt that relations with their superiors improved, mainly due to transparency in the whole process. Watch the video below to hear Shahi tell their story, and listen to the study group partners candidly discuss the results and their experiences with WOVO, as well as some timely insights into how the worker voice space is changing as a result of the COVID-19 crisis. More findings can be found on GBL's website here.

After almost 4 months of closures, factories in Vietnam struggled to reopen and return to production. Just one month after the government allowed factories to reopen, officials reported only 46% of the pre-pandemic workforce had returned to industrial zones but nearly 100% of workers in factories using WOVO, in those same industrial zones, had returned. Anxious to Return to Work, Many Workers Remained Unvaccinated + Isolated In October 2021, the Vietnamese government lifted strict COVID measures, allowing for factories to reopen if returning workers were vaccinated. But with only 29% of the population vaccinated this was a challenging task. While most factories struggled to communicate with workers offsite and support vaccinations and the return to work, factories with WOVO were able to communicate directly with workers, no matter where they were, provide support and get them back to work faster. The results were clear, by November, government officials reported only 54% of workers had returned to the industrial zones. In the same industrial zones, factories using WOVO reported 95% of workers had returned. This case study highlights how a footwear factory with over 11,000 employees successfully reopened and addressed workers challenges at scale using WOVO. Concerned Workers Factory closures led to immense economic hardship for workers. Many workers were anxious to return, but were left isolated in their hometowns with no access to vaccinations and thus no ability to return to work. As a result, factories in Vietnam with WOVO saw a huge increase in messages from workers. 70% of messages in late 2021, were from workers concerned about; access to the vaccine, and compensation from the government and factories for workdays missed due to quarantine. WOVO helped factories connect with workers who had not yet returned, disseminate information to all workers no matter where they were and to quickly assess where additional support was needed. Informing, Responding to + Supporting Workers The factory recognized there were several critical issues facing workers’ return and so set up a team dedicated to responding to workers + resolving issues within 24 hours. Using WOVO’s company announcement feature, factory management was able to timely inform workers about updates from the Government and the factory regarding the financial aids and the paperwork requirements. Working with Worker Representatives to Help Financial Needs + Compensate for Workdays Missed due to COVID Most workers were concerned about loss of earnings during factory’s COVID closure. Management empathized and understood the concern, but had also faced significant loss during the closure, still management wanted to support workers. They established a tri-party meeting, including factory management, workers and union representatives to discuss salary adjustment and additional compensation. The factory then used WOVO to announce the changes. This helped reassure workers who were nervous about returning that their needs would be met. Using Worker Surveys to Better Understand Worker Needs Using WOVO’s Worker Surveys, management sent surveys to understand workers’ vaccination status, general health and plans to return to the factory. Following the survey management was able to: - Plan better for production and compensation - Able to help workers who did not have access to vaccines get access Helping Workers Get Access to Vaccines To support workers’ return to work, the factory contacted the local health centers and arranged vaccination schedules for workers who were not able to get access at their hometown. As a result, 95% of workers were fully vaccinated and 80% were able to receive a 4th shot, allowing them to return to work faster + safer. A Win-Win. Clear Improved Outcomes for Workers + Clear Financial Returns For Factories. Factories using WOVO were able to ensure worker safety, address concerns of financial loss and get workers back to work faster. Workers felt heard, supported and engaged. Factories with WOVO were able get back to pre-pandemic production levels and meet client needs faster. Labor Solutions, a social enterprise, leverages technology to connect, engage and educate workers to build resilient supply chains. Over a million and a half workers in 25 countries have access to Labor Solutions’ worker engagement platform, WOVO. Please reach out to our team to learn more: info@laborsolutions.tech.

In 2020, an Indonesian footwear manufacturer implemented Labor Solutions’ internal grievance mechanism, WOVO, at the request of a client. The platform had active utilization with workers using it to ask questions about leave, production targets, and salaries. But rarely did the human resource team receive messages about health and safety or other serious issues. The factory instead relied on monthly inspections from an internal health and safety team to ensure worker safety. But the inspection staff had limited capacity and many issues remained unidentified and persistent. Implementing eLearning for workers In early 2022, the factory’s client asked the group to implement WOVO’s digital trainings and ensure workers completed courses on Understanding Grievances and Health + Safety. The courses explained health and safety standards and the importance of speaking up to help solve issues quickly. Results: A Working Grievance Mechanism That Engages Workers Immediately, there was a 50% increase in the number of health and safety messages and reports. Reports included reports of smoking, need for new protective gloves, and insect infestations. Now aware of what constitutes an issue and how to report an issue to resolve, workers were quick to use the tools and highlight issues. eLearning for workers is the first step to effective grievance mechanisms and management. “Factories are complex social settings and physical environments. Workers are the most likely to spot issues first, but they must first be able to identify something is wrong, know how to report the issue, and not be scared to do so,” said Jen Green, Senior Director of Content and Partnerships, “that’s why education is the first step to prevention and arguably more important the grievance mechanism itself.” The following quarter there was a 124% increase in the number of health and safety reports, demonstrating not only that workers knew what and how to report but also that they trusted the system and their management to resolve the issues. The factory was surprised, and, at first, overwhelmed. “We see utilization as a strong indicator of trust, if workers don’t trust management, they don’t use the system,” said Pradeep Paul, Senior Director of Global Client Excellence. “When we saw this huge increase in utilization, we reassured the factory that it was a good sign. But reminded them that they needed to continue to resolve issues to maintain worker trust.” The Labor Solutions Client Excellence team provided support to help the factory first set up a transparent process to investigate and remediate each issue. After implementing and communicating the process, the factory was able to tackle each problem and solve most of the underlying, long-standing issues reported by workers more efficiently. Ongoing Progress to Manage Grievances Among New and Existing Factory Workers The process for managing grievances is still in place and now new workers are required to take the digital training when they are onboarded. While the factory receives fewer health and safety messages now, workers still actively report issues. The factory also still conducts internal and external health and safety audits, but they no longer need to wait for an audit to happen to uncover or address problems. This case study shows how eLearning for workers can be used to increase health and safety reporting in factories. By educating workers about their rights and how to report issues, companies can create a more transparent and trusting environment that aligns with human rights due diligence (HRDD) principles. Learn more about how to kick-start your HRDD process.

Companies often ask Labor Solutions about how other companies implement, encourage suppliers to the program, and gain leadership buy-in. We recently sat down with Mr. George Hou, the Regional Responsible Sourcing Manager of The Children’s Place to hear about the children's apparel brand’s worker wellbeing strategy and lessons. Why is worker wellbeing important to TCP and suppliers and what is your goal? George Hou, TCP: “At TCP, we strive to positively impact the lives of the people who make our products and the communities and environments affected by our business. Our commitment to positive social practices includes supporting the workers within our supply chain. TCP’s ESG strategy focuses on 6 areas, namely: Grow, Reduce, Divert, Comply, Develop and Give. Worker Well-Being belongs to the Develop category, for which we want to develop worker well-being programs with our manufacturers. For, TCP, a worker well-being program encompasses the development and implementation of workplace programs with a goal to improve workers’ lives. Our worker well-being model centers around 3 areas that support women workers: Personal Development Workplace Gender Equity, and Community Well-Being Companies doing their part to address worker needs leads to tangible benefits on the production floor, including, but not limited to reduction in turnover and absenteeism, improvement in workplace cooperation, decrease in stress factors, higher level of worker retention, and opportunities for career development. Our goal is to positively impact 140,000 workers by the end of 2023 through development on personal growth, workplace gender equity, and community well-being." How TCP Implemented WOVO TCP started by conducting a baseline survey to understand the needs of its workers. The survey found that workers wanted to communicate more with management, learn more about worker wellbeing topics, and take training that was relevant to their jobs. TCP leveraged WOVO's ecosystem of tools to make positive changes in their workplace. What suggestions do you have for other companies looking to start a worker engagement program? George Hou, TCP : I would suggest several things: Commitment and support from leadership Build up strategy on objectives from the worker wellbeing programs Select key suppliers to pilot the programs Communicate to the chosen suppliers to get their buy-in Identify qualified service providers and negotiate a reasonable program cost.” How has WOVO helped TCP achieve the goal of worker wellbeing? George Hou, TCP: “TCP has been sponsoring in-factory training programs to teach soft skills to aid workers in areas such as communication, problem-solving, decision-making, time and stress management, and leadership. We have found women-centered projects to be particularly impactful in providing value to a predominantly female workforce within our supply chain. Such programs have a cascading effect and end up benefiting workers, their families, and the extended community. “ Supplier ownership is critical in implementing projects like this in complex supply chains. How did you get suppliers’ buy-in? George Hou, TCP: “We provided Worker Wellbeing Program guidelines and explained the content through webinars with our suppliers in late 2021 when we first launch the program. We also targeted the top 25 global vendors to create an impact. That said, it paved the way for easier communication with vendors. We did not experience pushback. But, indeed, there are situations that require more rounds of communication to provide more information and share TCP’s expectations. “ Labor Solutions helped TCP take its worker well-being strategy to scale. Promoting supplier ownership, leveraging technology and advisory support, and collecting actionable data points with Labor Solutions is at the heart of TCP’s strategy. If you’re a brand or supplier looking to build up a similar program – or just want to take that key first step in the right direction– get in touch with us!

In 2011 Myanmar’s political and economic transformation was attracting new foreign direct investment and renewed enthusiasm. Footwear and apparel manufacturing acted as a driving force for growth, creating over 700,000 jobs and accounting for nearly two percent of the annual GDP growth . However, the 2021 political crisis led the once-promising industry to drastically contract . Exasperated by ongoing political tension, the COVID pandemic, and rising energy costs, Myanmar’s economy continues to suffer and unemployment continues to grow. Global brands sourcing from Myanmar find themselves in the middle of a heated and public debate—should they stay or go? The debate is nuanced and complex - since leaving the country could be catastrophic for workers’ economic welfare, but staying is seen by some as financially or figuratively supporting the military regime. As the political crisis continues and vulnerabilities are exacerbated, the pressure on brands to act is mounting. At the center of this crisis are workers, many of whom eagerly ditched the uncertainties of the agricultural sector to join the more stable manufacturing workforce. An estimated 32% of manufacturing workers have lost their jobs since the coup started. In an effort to make evidence-based decisions, international companies sourcing from Myanmar are keen to hear directly from workers. In early 2022, several leading footwear and apparel companies engaged Labor Solutions to help overcome ongoing communication challenges and capture feedback directly from affected workers. Labor Solutions started by conducting several worker surveys across the country: the response rates were unprecedented. Despite the seemingly insurmountable obstacles faced by workers and those trying to connect with and support them, nearly 100,000 workers responded (nearly 20% of the total workforce) to Labor Solutions’ surveys. “We were shocked", said Bijie Li, SVP of Client Services, “more than 60% of workers that we contacted responded to the survey.” The sheer number of responses is a result of itself: workers want to be part of the conversation. In November 2022, Ms. Li presented the findings of surveys conducted over the course of the year to over one hundred business owners and stakeholders at the Operational Grievance Mechanisms Workshop hosted by Myanmar Sustainable Business Network and UNDP’s Responsible Business Myanmar Project . While results vary per factory, three main themes emerged; Job security and the need to continue financially supporting their families is the chief concern among workers. For many, their factory jobs have become the only source of income for their family, as other sources of income have disappeared since the coup. Workers have a strong sense of social connection in their workplace: most responses indicated that workers had friends at work and overall felt cared for by their managers. Workers need to hear more from management. In times of high stress and change, communication is key. Workers reported feeling disengaged and confused when communication was weak. One of the great advantages of conducting surveys at individual factories, says Ms. Li, "is the ability to collect localized data that is able to drive local change. Worker satisfaction is obviously not universally the same, but the best way to universally increase worker engagement and satisfaction is to make sure there is access to local data and to share those results with local decision-makers." Results are always shared with both brands and factory managers who can leverage findings to cultivate social connection and proactively address stresses, rumors, and issues with their workforce. Most suppliers engage with the findings and those who don't face pressure from brands. The surveys conducted in Myanmar showed that some suppliers needed additional capacity building and support. The EU-backed NGO SMART Textile & Garment partnered with Labor Solutions to implement a holistic program to help factories more actively communicate and engage with workers, particularly given the political climate and changing circumstances. The program provides suppliers with Labor Solutions’ WOVO tech platform to support better worker engagement and communication. With WOVO, factories can proactively communicate with workers, seek worker feedback via surveys at any time, and allow workers to send anonymous messages with concerns, questions, or reports, regardless of the worker’s location. To protect workers, Labor Solutions has added several features, like disappearing messages and masked or anonymized responses, to the WOVO app to ensure messages don’t get into the wrong hands or result in retribution. SMART uses the data from the surveys and grievance mechanism to create facility-specific Corrective Action Plans (CAPs) to remediate identified issues and ensure long-term strategies for success are embedded into their daily operations. In this process, brands support, rather than police and punish factories. The data allows brands to see each supplier as a unique workplace and provide localized improvement plans. The results of this project thus far reinforce what we already know: workers are the engine of the garment industry and worker engagement and communication cannot be neglected in a holistic responsible sourcing strategy. To get a deeper insight into your supply chain in Myanmar and join our collaboration, contact us here: https://www.laborsolutions.tech/contact or at info@laborsolutions.tech. SMART Textile & Garments now renewed as MADE, is funded by the European Union and co-funded by private sector partners (brands, retailers, and factories) and aims at improving working conditions, promoting labor and environmental standards, and reducing labor rights abuses in the textile and garment industry. The project builds on the previous SMART projects implemented between 2013-2019 and will further upscale, expand and strengthen responsible and sustainable manufacturing practices across the Myanmar garment industry. Labor Solutions, an impact-focused business, leverages technology to connect , engage , and educate workers to build resilient supply chains. Over a million and a half workers in 25 countries have access to Labor Solutions’ worker engagement platform, WOVO . Workers can respond to worker surveys, report grievances, and access eLearning modules on rights and responsibilities.

Engaging Front Line Workers is Key to Understanding Risks + Improving Workplaces Enhanced Engagement: Worker surveys are essential for engaging the workforce by giving them a voice in the organization's operations and decision-making processes. This can lead to improved job satisfaction and morale as workers feel valued and heard. Risk Identification: Proactively identifying and addressing issues within the workplace through surveys can prevent minor concerns from escalating into serious problems, ensuring a harmonious and productive work environment. Continuous Improvement: Surveys provide critical insights into processes, policies, and practices, allowing organizations to make informed decisions that drive continuous improvement and operational efficiency. Compliance and Due Diligence: In the face of stringent global regulations regarding labor practices, worker surveys help organizations maintain compliance by monitoring and documenting conditions that affect human rights within their operations and supply chains. Worker Well-being: Direct feedback from workers helps organizations to better understand and subsequently enhance worker well-being, leading to reduced turnover and a more motivated workforce. Data-Driven Decisions: The data collected from worker surveys offers a clear, actionable insight into the workforce's needs and expectations, guiding strategic decisions and resource allocation. Work with Labor Solutions to Conduct Worker Surveys Throughout your Value Chain. Accessibility and Inclusivity: WOVO’s mobile and web-based platforms are accessible in multiple languages, ensuring that surveys are easy to complete for a diverse, global workforce, which enhances participation rates and data quality. Real-Time Analytics: WOVO provides real-time feedback capabilities, allowing organizations to quickly identify and address emerging issues before they escalate, ensuring timely and effective responses. Confidentiality + Security: The platform ensures that all survey responses are confidential, which encourages honesty and transparency from workers fearing retribution, thereby enhancing the reliability of the data collected. Educational Integration: WOVO eLearning tools can be used to inform workers about their rights and company policies before taking the survey, which can lead to more informed responses and engagement in the survey process. Comprehensive Compliance Support: WOVO helps organizations adhere to HRDD and other compliance requirements with its robust data management and reporting features, making it easier to document efforts and outcomes in various regulatory environments. Scalability and Customization: The platform can be easily scaled and customized to fit the specific needs of different parts of an organization, from small teams to large global operations, making it a versatile tool for gathering actionable feedback across varied contexts. Using WOVO to conduct worker surveys not only streamlines the process of engaging with and understanding your workforce but also ensures that the efforts align with broader compliance and strategic goals, ultimately fostering a more inclusive and responsive organizational culture.

Download our eBook on Strategies for Effective HRDD in Your Supply Chain to learn more about this topic. While there are many human rights-related laws and regulations you may have to comply with, most HRDD laws are based on the UN Guiding Principles on Business and Human Rights, the OECD Guidelines for Multinational Enterprises, the OECD Due Diligence Guidance for Responsible Business Conduct, and the ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy. As a result, there are several common requirements and principles that your business can put into place to ensure compliance across regimes and to help protect your businesses when practices are questioned. Here are the first steps you can take to implement HRDD in Your Supply Chain; The scope is vast, and the scale is huge - you can’t do this alone Conducting due diligence alone at scale is impossible. Companies must engage suppliers. To meet regulations global companies will need to leverage their relationships with suppliers to ensure on-going active identification and prevention throughout the value chain. Successfully identifying risks from afar will be challenging, if not impossible, and could leave organizations exposed. Incentivizing and supporting suppliers to conduct their own due diligence and human rights management will allow for scalability and efficacy. Suppliers must be charged with conducting identification efforts, operating their own grievance management system, implementing prevention methods, and remediating complaints. A buyer’s responsibility is not to conduct these efforts themselves, but to ensure these activities take place—the objective is not micromanagement but building trust and that suppliers get support when needed. Successful implementation will allow buyers to have oversight and pinpoint suppliers who need additional support. To ensure suppliers ask for help when they need it, take care not to incentivize suppliers to hide issues or set up a dual reporting system. By aligning incentives and ensuring that suppliers will not be penalized for human rights issues that occur at their facilities, you can build trust with your value chain partners that ensure business changes for the better. Get key stakeholders engaged Prior to these new regulations, corporate human rights teams often struggled to get the right stakeholders engaged to create systemic, long-term change. The goal of HRDD is to integrate the changes into business practices long term and to level the playing field so that responsible businesses do not incur significantly higher costs. With these new regulations, subject matter experts and internal human rights champions should now have the tools necessary to get the attention, buy-in, engagement and resources from top leadership, supply chain managers and others needed to ensure success. To maintain buy-in and support, new policies, active stakeholder engagement and continuous education and improvement will be required. Now outline your risks Most companies do not know their entire value chain much less the human rights risks within their value chain, but that does not preclude the legal responsibility to act on known and inherent risks. Inherent/Core Risks: Simply sourcing from outside your company has inherent risks that must be understood, prevented, and mitigated. This includes general human resource risks, like health and safety, gender and other non-discrimination in the workplace, and fair wages. Political instability and conflict, supply chain interruption, as well as extreme weather events and natural disasters are also part of the core risks of doing business globally and particularly in sourcing from countries with lower costs and lower protections. Known Risks: Many specific geographies, commodities or industries also have widely known risks. For example, it is common knowledge there is a high risk of forced labor in Malaysia and globally in the fisheries industry (particularly in offshore work), and cacao has problems with child labor. Therefore, governments assume multinational companies sourcing from these locations or in these commodities know these risks and therefore companies are required to actively identify existing issues and prevent future issues. Unknown Risks: Risks not yet identified, understood, or accounted for. These risks are most commonly specific to a business and unknown due to an opaque or obscure supply chain. Since unknown risks are a continuing and evolving issue, conducting an ongoing assessment, and monitoring of your entire value chain must be done in tandem with other due diligence. However, the assessment process cannot be done in isolation and the incompleteness of the assessment will not be an excuse for not complying with other components of the regulations. These first steps would inform you what are the next immediate actions that you can take. You can start addressing those risks through prevention and identification efforts to improve and remediate the issues within your supply chain. It is very important to remember you can start practicing due diligence even if you don’t know how to do everything yet.