As organizations concerned with the rights of workers in global supply chains, MSN and PODER have paid close attention to efforts to rate companies on their supply chain labour practices. Can CSR ratings help improve labour practices in global supply chains? is our contribution to the debate on the role, value and effectiveness of rating systems.
Although MSN and PODER are clear that none of the rating systems out there right now are perfect, some are better than others, and understanding how these systems work will help you to tell the difference.
Although we provide a longer list of questions for rating systems designers and labour rights advocates in the full publication, we’ve developed a short-list of five questions for consumers and investors to ask themselves about a labour rights rating system before deciding if it’s giving them the information they need to make informed choices:
1. Do you know what the rating system is measuring?
Is it measuring whether the company has management systems in place to identify and correct labour rights violations? Is it rating whether the company has made formal commitments to respect labour rights and/or address specific issues? Are serious efforts being made to incorporate data on actual working conditions in the ratings?
2. Does the rating system give more weight to the most important issues?
Are the indicators weighted to give more points for more substantial commitments on critical issues? Are issues of most concern to you given sufficient weighting? Are some key issues lost in ratings that consolidate a number of related issues?
3. Do you know where the rating system gets its data?
Does the rating system depend solely on what is reported by the company? If so, is that information publicly available or is it provided on a confidential basis? Does the rating system also use other more independent sources of data and, if so, how reliable and credible are those sources? Is the data used relevant and sufficient for the indicator being measured? Are the sources reliable and credible?
4. Is the rating agency credible?
Do you trust the organization(s) or individuals doing the rating? Who funds them? Are they truly independent from the companies being rated or are there some potential conflicts of interest? Do they have expertise and experience on the issues being rated? Is there any mechanism for oversight by labour rights experts, or an opportunity for interested parties to challenge the ratings?
5. Is the rating up-to-date?
How old is the data being used for the ratings? How often is it updated?
If you’d like to learn more about rating systems, how they work and how they could work better, read all about it in Can CSR ratings help improve labour practices in global supply chains? a new discussion paper from MSN and PODER, available here:
English: http://en.maquilasolidarity.org/node/1010
Spanish: http://es.maquilasolidarity.org/node/875
