The Self-Assessment Questionnaire (SAQ) is a risk-assessment tool which enables companies to evaluate specific supply chain risk in the areas of labor, health and safety, environment, and ethics.  The SAQ is made up of a set of questions for businesses to self-report on their business practices, management systems, policies and information related to their manpower and production processes so that they can better understand if they are meeting international standards and the requirements of the RBA Code of Conduct. 

In recent years, the RBA has developed the Risk SAQ which incorporated data from other 3rd-party risk assessment databases and proprietary, aggregated data derived from RBA's own VAP assessments that generate an actionable risk score that companies can use to identify areas of inherent and emergent risk that they need to focus on.  In 2024, the Risk SAQ became the main SAQ highlighting the criticality to RBA's members and their suppliers of a risk-based due diligence approach to meet new and emerging international regulations.

This article aims to shed light on the methodology behind the scoring of the 2024 SAQ, offering stakeholders a comprehensive understanding of the process, despite the specific scoring criteria being confidential and proprietary to RBA.

The Core of Risk SAQ Scoring

At the heart of the Risk SAQ scoring methodology is the combination of external risk indicators and risks due to gaps in the company's internal management systems, usually in response to a number of external risks.  By more comprehensively identifying external risks to the company, it is expected that the internal factory responses should match the level of extraneous risk.  Below is the basis for the overall score:

Data used for scoring these external elements is sourced from the RBA Risk Assessment Platform, a broad-based risk assessment platform available to all RBA and Initiative (RMI, RLI) members. This platform leverages vetted, 3rd-party databases that analyze and track specific risk indicators which is then incorporated into a dynamic scoring algorithm with high confidence scores for each rating. The exposure of each supplier to inherent, extraneous Country (locality where available) and Product/Industry risks is calculated in combination with their internal practices, generating a robust and nuanced risk assessment score that indicates where additional risk management is warranted.

The Pillars of Scoring: 

Country Governance and Product Scores

A significant component of the scoring model is the Country Governance score, derived directly from the World Governance Indicators (WGI) published by the World Bank. This integration ensures that our assessments are aligned with global standards and reflect the governance quality of the countries in question. As ESG compliance relies on the strength of State institutions to uphold human rights, countries/territories with weaker governance scores are at higher risk of labor and environmental rights non-compliance hence this was a critical addition to the SAQ scores.

Similarly, Product Scores were added to ensure that inherent risks in specific industries/product production are taken into account.  These are extracted from RBA’s proprietary product rating system, available on the RBA Risk Assessment Platform, offering a granular view of product-related risks.

Diving Deeper: Specific Scoring Categories (Inherent and Factory Responses)

The SAQ delves into detailed analysis across various risk subject areas namely Labor, Health & Safety (H&S), Environment, and Ethics. Individual component scores are broken down as follows:

• 75% of the score for each category is determined by factory responses to the questions posed, with every question weighted equally. These questions are designed to identify the presence or absence of risk.
• 25% of the score is derived from geographic risk indicators sourced from the RBA Risk Assessment Platform, incorporating data from global indices that are updated on a regular basis:

Labor

• Children's Rights in the Workplace Index (UNICEF and Global Child Forum)
• Gender Inequality Index (United Nations)
• Global Slavery Index - Proportion in Slavery (Walk Free Foundation)
• Global Slavery Index - Vulnerability (Walk Free Foundation)
• Human Development Index (United Nations)
• Secondary enrolment (UNESCO)
• Workers Rights Index (ITUC)

Health & Safety

• Life expectancy (UNDP HDR)
• Sanitation & Drinking Water Index (Yale and Columbia University)
• Technological Disasters Index (EM-DAT & World Bank)

 Environment

• Agriculture Index (Yale and Columbia University)
• Air Quality Index (Yale and Columbia University)
• Carbon Intensity Index (Yale and Columbia University)
• Flood Risk Index (World Resources Institute)
• Solid Waste Management Index (Yale and Columbia University)
• Storm Risk Index (EMDAT and World Bank)
• Tree Cover Loss Index (Yale and Columbia University)
• Wastewater Index (Yale and Columbia University)
• Water Stress Index (World Resources Institute)

Business Ethics

• Corporate Governance Index (World Bank)
• Corruption Perceptions Index (Transparency International)
• Freedom In the World Index (Freedom House)
• Fundamental Rights Index (World Justice Project)
• Rule of Law Index (World Bank)

Management Systems

• Regulatory Quality Index (World Bank)
• Transparency of Government Policymaking Index (World Bank)

Aside from these items, there are proprietary supply chain risk factors that contribute to the totals of each subject area risk score.

Forced Labor scoring

The Forced Labor score is derived from a subset of the Labor Indicator questions, based on the definition and indicators for forced labor as identified by the ILO.

SAQ Structure

The SAQ structure is composed of 3 Steps, establishing an initial risk base in Step 1.  Step 2 provides the opportunity to show management maturity to manage risk by allowing the presentation of organizational control practices and policies, and a verification step with RBA experts that could result in a lower risk profile (higher score).

The RBA Risk-based Due Diligence Model

The SAQ remains as a critical step on RBA's Risk-based Due Diligence model to manage supply chain risks and support companies to meet international standards and the RBA Code of Conduct. Each risk assessment tool builds on the results of previous tools, helping companies minimize risk and close gaps against the Code.  This hierarchy of risk tools allows companies to identify specific facilities and specific areas of the RBA Code/VAP Standards that need more focus and support.

We are committed to providing transparency and clarity on how we approach the scoring of the 2024 SAQ. While the intricacies of our scoring criteria remain proprietary to ensure the integrity of the tool, we believe this overview offers valuable insight into our comprehensive methodology.

Visit the RBA Risk Assessment Platform (must have a Risk Assessment platform account to access)