Q&A on NIMBUS Web Monitoring

What kind of ethical risks are monitored?

The overall distribution of ‘alerts’ across our different ‘ethical risk’ categories is illustrated in the graph below.

Environmental and Health and Safety issues are relevant to about 50% of alerts. Labour issues are relevant to 10% (Note: the totals exceed 100% because many incidents or allegations we record can relate to multiple categories). This distribution varies quite considerably between countries.

How many ethical incidents and allegations do we find?

We detect at least one significant web-recorded 'incident' or 'allegation' per year for about 10-15% of the companies we monitor, depending on the sector.

A specific allegation or incident can give rise to multiple alerts. For example, an initial 'alert' could relate to a) a factory accident, or b) a pollution event, or c) a labour dispute. There could be subsequent alerts confirming, respectively, a) casualties or fatalities, or b) a fish kill or impacts on drinking water quality, or c) admission of unpaid wages or unethical practices to end a dispute.

Which business sectors do we monitor?

We track about 4,500 companies across all main sectors. Nearly half of alerts raised come from the manufacturing sector and nearly a quarter from mining. The graph below shows the contribution from these and other sectors

 

The distribution of alerts across manufacturing sub-sectors is shown below. Metals and chemicals production, combined, account for nearly 25%. Consumer electronics, computers and other IT equipment accounted for nearly 20%.  Pharmaceuticals, petroleum products, pulp and paper and food and beverage each accounted for 5-10%.  Apparel, games and toys, oils and fats, automobiles and others each accounted for less than 5%.

 

What are our sources of information?

We monitor the web for incidents and allegations in local languages, as well as English. In most cases we find incidents reported in regional or local media or web sites. Less than 20% appear in the European or US national media. We also listen to feedback, via our research feedback, from contacts in NGOs, government departments and various news organisations.

How much does the web monitoring service cost?

Web monitoring is a very cost-effective assurance check. For the total cost of about three emerging economy audits, InvestAssure can web-monitor about 500 factories for one year. For the cost of ten audits we can probably monitor the Asian supply chains of most large retailers.

This means that managers can re-focus much of their compliance audit budget on tackling the exposed bad performers and on more targeted performance improvement initiatives. Overall, we believe it could support the needed shift away from traditional mass compliance auditing towards a wider programme of constructive engagement and training.