Material Insights Material Risk Map Methodology
23rd February 2024
The Material Risk Map presents supply chain risk information at both the country and material level, including global mineral production and reserve volumes, ESG risk and other relevant indicators. The responsibility to determine which countries are high risk ultimately lies with companies themselves, while there is no single ‘right answer’ to this question, the Material insights Risk Map supports companies in making such determinations. An explanation of the different supply chain risk metrics are given below.
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The risk scores are based on publicly available reports of ESG issues in specific material supply chains authored by media outlets, academic publications, civil society, governments and other international organisations. These reports have been assessed for the gravity of the ESG issues identified; the credibility and influence of the report author; and the frequency with which different sources report each given ESG issue. A proprietary assessment methodology is then used to combine the scores for these three factors into an overall risk score for each ESG issue report. These scores have then been aggregated to the material-country materiality scores.
Thresholds:
Very Low – Publicly available reports indicates that there is no apparent risk exposure to date.
Low – Risks that are low based on publicly available reports at the present stage, but which still requires due diligence to properly manage the risk.
Medium – Risks that have an elevated exposure and for which additional focus is needed on mitigation activities. If additional controls are neither possible nor practicable, the risk owner should be able to explain why this is the case.
High – Risks to which a company has a high exposure. Continued focus needed in developing and implementing additional controls and other treatment activities to reduce the exposure.
Very High – Risks that pose a significant exposure. Failure to develop and implement additional controls and treatment activities will likely have a substantial impact on a company.
Production & Known Reserves: the estimated production and known reserves of different minerals and other materials for the most recent year available are presented, which are primarily based on figures published by the United States Geological Survey (USGS)
Dodd-Frank Act Countries: – Democratic Republic of Congo and neighbouring country producers of tantalum, tin, tungsten and gold (3TGs), countries named in section 1502 of the US Dodd-Frank Wall Street Reform and Consumer Protection Act as tantalum, tin, tungsten and gold (3TG) producers, which include the Democratic Republic of the Congo and its neighbouring countries.
EITI Implementing Countries: countries which implement the Extractive Industries Transparency Initiative (EITI) Standard for the good governance of minerals resources. Note that this does not include countries currently being assessed by the EITI, or whose implementation has been suspended due to deteriorating political circumstances.
US Department of Labour Child / Forced Labour List: whether or not a given material supply chain in a specific country has been assessed by the US Department of Labour has assessed as being in violation of international standards with regards to the production of goods through the use of child or forced labour.