SOCIAL HOTSPOTS DATABASE CLARIFICATIONS
This Imperative requires that manufacturers “Identify the most critical social risks associated with each priority supplier and the leading certification systems that address those risks by using the Standards Map website.”
Step One: Identify Top 10 Priority Suppliers
List the top 10 (“priority suppliers”) of all Goods and Services either to the facility or to the business unit containing the facility, based on total annual spending. Manufacturers must provide an approximate percentage of total annual spending allocated to each of these top 10 suppliers, and do not need to disclose spending amounts in dollars.
Step Two: Social Hotspots Database
Next, for each priority supplier, Manufacturers should use the Social Hotspots Database (SHDB) to identify the social risks associated with the industry sector and the country of production where the majority of production of the material supplied to the Manufacturer occurs. For example, the primary metal hardware supplier for the Manufacturer may provide most of the metal hardware from operations in Thailand, where this industry may have significant negative impacts on women’s health outcomes, whether directly or indirectly. The supplier may operate in multiple countries; the manufacturer should simply name the country from which the highest share of input from this supplier to the manufacturer originates.
Manufacturers must identify the 1, 2, or 3 (as many as is returned by the SHDB) most critical social risks for this country-specific sector. The most critical risks are identified by having a highest contribution to the social hotspot index for that country-specific sector. List these risks for each of the top 10 suppliers.
Step Three: Identify Global Trade Analysis Project (GTAP) Sectors
Manufacturers must then indicate which of the 57 sectors identified by the Global Trade Analysis Project (version 9) the supplied material falls within for each of the top 10 priority suppliers. Following this, the Manufacturer may continue on to the Standards Map (see Standards Map Clarifications).
STANDARDS MAP CLARIFICATIONS
Once a list of socially vulnerable GTAP sectors associated with each of the top 10 suppliers has been collected, the manufacturer should use the Standards Map to identify certifications related to each Product/ Sector and Producing Country identified for each supplier. Manufacturers must then share this information with the top 10 suppliers and advocate that they prioritize certified material inputs in their supply chains that are proven to encapsulate social dimensions of raw material extraction and refining.
