Dun & Bradstreet Human Trafficking Risk Index

HTRI

This is a bit off the beaten path for my usual discussions, but it is always welcome when a company is able to create new products which take their core capabilities and direct them towards a global (or local) problem.  In this case, Dun & Bradstreet has developed a Human Trafficking Risk Index which helps firms avoid dodgy suppliers that may be using slave labor.   What’s more, this appears to be the first in a series of “Responsible Business Analytics” products they are planning to launch.

Their new Human Trafficking Risk Index helps procurement departments identify potential vendors that utilize trafficked labor (21 million people globally).  This shadow economy has been sized at $150 billion in annual illegal profits by the International Labor Organization.  Dun & Bradstreet is combining data from the US Departments of State and Labor with their global linkage information to help their customers “address supply chain risk while also helping them to be responsible corporate citizens.”

In “Trafficking in Persons Report” (July 2015), Secretary of State John Kerry said “This year’s Report places a special emphasis on human trafficking in the global marketplace. It highlights the hidden risks that workers may encounter when seeking employment and the steps that governments and businesses can take to prevent trafficking, including a demand for transparency in global supply chains.

When people are asked about Dun & Bradstreet, they usually think of business credit reports, but the credit products are part of a broader Risk Management Solutions division that covers both business credit and supplier risk.  Along with credit scores, they have one of the world’s leading company databases, the 250 million company WorldBase file, which covers both active and inactive companies with deep company linkage.  It is this linkage intelligence that helps firms see through shells and holding companies to connect known bad actors with the rest of the organization.

Companies are already looking for the risk management companies to assist with KYC (Know Your Client), AML (anti-money laundering), and PEP (Politically Exposed Persons) to root out corruption.  Responsible Business Analytics is simply the next set of tools for helping companies act responsibly, maintain compliance, and avoid reputational black eyes.

What was impressed me was that on their Q1 earnings call, CEO Bob Carrigan spent a few minutes of his prepared remarks discussing their new index.  His focus wasn’t on profitability or future revenue streams, but about helping to reduce a global problem.  Carrigan argued that the role of the Chief Procurement Officer has expanded from optimizing the supplier base to managing supply risk including reputational risk.  Thus, the CPO needs tools that assist with regulatory compliance and brand risk management.  According to Carrigan,

Our supply risk solutions help customers manage this full spectrum of risks.  Today, CPOs have a fast growing need in what we call “Responsible Business Analytics” to help them guard against regulatory and reputational risks.  We help them as they comply with Government diversity requirements and monitor global banned entity lists, as well as meeting their social responsibility commitments like funding suppliers with sustainable business practices and meeting best in class ethics standards.

Is this a product category that will be a big money maker for Dun & Bradstreet?  I doubt it.  But at the margins, it provides a differentiator between Dun & Bradstreet and other supply risk vendors.  As such, it could tip a few deals their way while helping to reduce the profits of human traffickers.

 

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