(Alert Index for Responsible Sourcing)
TDi Sustainability’s Alert Index for Responsible Sourcing draws on established indices for country-level governance from a range of international organisations. It focuses on those aspects of governance that are most relevant for companies seeking to source responsibly from each country, and indicates how effective a country’s governance environment is for supporting this goal.
The darker a country appears, the weaker its score on the Alert Index for Responsible Sourcing, and the more vigilant a sourcing company should be for potential sustainability issues in its supply chain.
We separate out our underlying indices into four categories, each of which has equal weighting – Conflict, Law, Human Rights, and Environment.
Each category comprises four indices, except for the environment category. The only sufficiently global environmental index currently available is the Environmental Performance Index, developed by Yale University, so this index contributes the entire weight for the Environment category of the TDi Alert Index for Responsible Sourcing.
Each of the indices we include is regularly reviewed for suitability, and the Alert Index for Responsible Sourcing is refined and updated at least once a year. The index was last updated in August 2022.
The Alert Index for Responsible Sourcing combines its underlying indices using the geometric mean, which is a more specialist mathematical tool than the common arithmetic mean. Using the geometric mean causes countries with significant governance weakness in every area to be rated worse than countries with a mix of governance strengths and isolated (but more severe) governance weakness. Averaging in this way reflects the reality of responsible sourcing, in which the greatest risk is presented by systemic weakness across all aspects of governance. High risk countries for responsible sourcing are typically those in which governance failings compound each other.
If you would like to learn more about this index, explore its applications, or discuss the methodology and approach it uses then we would be glad to hear from you. Please direct all correspondence to [email protected]