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Labor Risk Exposure

What is the overall labor risk involved in this ingredient, considering the severity of working conditions and number of people affected?

Jemima Snow avatar
Written by Jemima Snow
Updated over a week ago

What is Labor Risk?

The Labor Risk metric measures the human risk factors associated with the agricultural production of a given ingredient, taking two factors into consideration:

  1. The severity of average working conditions ranging from forced and child labor on the negative end of the spectrum, to a living wage with the ability to unionize on the positive end of the spectrum.

  2. The number of individuals affected relative to the ingredient’s yield. We take into account the number of workers required to produce an ingredient.

How does Labor Risk Exposure relate to agriculture, product development, and the food system?

Farmworkers face some of the most grueling working conditions of any trade, which are only becoming harsher as climate change makes for hotter summers and more frequent natural disasters.

In addition to the extreme physical demands of agricultural work are the threats of injury, death, chemical exposure, sexual, physical, and emotional abuse, wage theft, permanent debt, lack of medical coverage or benefits of any kind, and most recently exposure to COVID-19.

How do Fair Trade certifications affect the Labor Risk Exposure impact score for a product?

The Fair Trade Certified seal on a product signifies that it was made according to rigorous fair trade standards that promote sustainable livelihoods, safe working conditions, protection of the environment, and strong, transparent supply chains. When businesses choose to supply Fair Trade Certified products, they show their customers that they support positive change for the people who produce their goods.

Fair Trade is a global network of producers, CPGs, consumers, advocates, and organizations working to build a more equitable model of trade. It is not specific to any one organization or certifying body and as a result, there are different Fair Trade certification bodies around the world. The three most common which are available in Latis include:

Fair Trade Certification does not guarantee that a product will receive a high score for Labor Risk Exposure. It suggests that the working conditions on the farms used to grow a product’s ingredients are relatively better than average. Consequently, it will relatively improve the score for Labor Risk, but the ultimate score depends on the overall level of risk. The type of Fair Trade standard applied is also a factor.

What are the biggest indicators of high Labor Risk Exposure impact?

Unmechanized, historically plantation-driven crops such as palm oil are major contributors to high labor risk. Ingredients sourced from very poor or recently politically unstable regions also carry a considerable risk of exploitation because these populations are extremely vulnerable and therefore at a very high risk of severe forms of labor abuse; likewise, they would score poorly on Labor Risk Exposure due to both the severity of the conditions faced by workers and the number of people impacted.

How do we measure Labor Risk Exposure impact?

Labor Risk takes into account both the severity of working conditions and the number of workers affected by them. This helps contextualize the scale at which labor abuses may be happening.

Risk levels are categorized as follows:

  1. High risk: critical low pay (less than $2 per day), forced labor, child labor (any work that precludes children from attending school regularly), and/or bonded labor.

  2. Significant risk: risk of nonpayment, no grievance channels, threats of anti-union violence, risk of sexual harassment, threats to smallholders to sell land, a high percentage of migrant labor or a vulnerable labor pool that does not have reports of forced or child labor.

  3. Low risk: low pay, risk of exposure to biocides and other harmful agricultural chemicals.

  4. Minimal risk: in cases of a single farmer-owner, the risk of debt, farm closure and loss of livelihood.

Negligible risk: better than minimum wage, high demand laborers, ability to unionize. It's important to note that low risk does not preclude all risk of workplace abuses, but does indicate better recourse for individuals facing problematic circumstances.

Ingredients Along the Labor Risk Exposure Impact Spectrum:

Key Data Sources

How does my ingredient portfolio compare to others in the industry when it comes to Labor Risk Exposure?

To see how your Labor Risk Exposure stacks up against the industry average, you can benchmark your portfolio score and metric averages here.

What is the relationship to the HowGood Impact Score?

Labor Risk Exposure is one of the eight core metrics that make up the HowGood Impact Score. To learn more about the HowGood Impact Score and how Labor Risk Exposure influences it, click here.

How can I improve impact as a product developer?

Companies can start by taking a comprehensive look at their supply system and identifying the source ingredients that have the highest risk of abuse. Short of establishing direct relationships with individual suppliers and conducting periodic farm visits, (which would be ideal but is not always feasible), the factors that impact Labor Risk Exposure criteria the most are, in this order:

  1. What the ingredient is

  2. Where the ingredient is grown

  3. Whether there are labor certifications like Fair Trade implemented

The most effective way for developers to decrease the likelihood of labor abuses related to a product is to either change the ingredient altogether, change the region where the ingredient is produced, or in some cases apply a labor certification requirement.

Further Resources

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