Hasbro, Inc. (“Hasbro,” the “Company,” “we,” “us,” or “our”) (NASDAQ: HAS) is committed to combatting modern slavery and human trafficking across our global operations, as described in this Statement and supporting documentation. We take a continuous improvement approach to ensure our preventative and remedial efforts continue to be relevant, timely and effective. Additionally, Hasbro complies with the requirements of the California Transparency in Supply Chain (2010), UK Modern Slavery Act (2015), and the Australian Modern Slavery Act (2018). This Statement outlines our policies and actions taken to assess and address potential risks associated with modern slavery and forced labor in our supply chain, as of the end of Fiscal Year 2022.
1. Organizational Structure and Supply Chain
Hasbro is a global leader in play whose mission is to entertain and connect generations of fans through the wonder of storytelling and exhilaration of play. Hasbro delivers engaging brand experiences for global audiences through gaming, consumer products and entertainment, with a portfolio of iconic brands including MAGIC: THE GATHERING, DUNGEONS & DRAGONS, Hasbro Gaming, NERF, TRANSFORMERS, PLAY-DOH and PEPPA PIG, as well as premier partner brands.
Hasbro is guided by our Purpose to create joy and community for all people around the world, one game, one toy, one story at a time. For more than a decade, Hasbro has been consistently recognized for its corporate citizenship, including being named one of the 100 Best Corporate Citizens by 3BL Media, one of the World’s Most Ethical Companies by Ethisphere Institute and one of the 50 Most Community-Minded Companies in the U.S. by the Civic 50. For more information, visit https://corporate.hasbro.com.
At Hasbro, we believe strong Environmental, Social and Governance (ESG) performance drives long-term value creation for all our stakeholders. As part of our ESG efforts we are committed to Corporate Social Responsibility and to building a safer, more sustainable, and inclusive company for all.
Our global supply chain includes approximately 80 finished goods third-party manufacturing facilities in 14 countries including China, India, Vietnam, Mexico and the United States. We also rely on subcontractors, molders and raw material suppliers. For more information on our supply chain, please view our Third-Party Factory List 2022, which is publicly available and updated annually.
We continuously monitor and address labor and human rights issues, both within our direct workforce and our supply chain. We evaluate our supply chain for modern slavery risks, conduct ongoing in-depth supplier assessments for new and existing factories and implement thorough due diligence measures to address new global risks, such as institutional forced labor supported by governments or other actors. These reviews cover health and safety, forced labor, child labor and other legal requirements and industry expectations.
2. Our Policies on Slavery and Human Trafficking
We are keenly aware of the risks of modern slavery and forced labor in the global supply chain and have well-defined policies and due diligence processes to identify and remediate any instances of non-compliance, as well as a dedicated global Ethical Sourcing team. In keeping with our commitment to act with integrity and to respect the rights of our stakeholders, our policies help to ensure that we have
strong frameworks to enable us to assess and address modern slavery risks in our business and supply chains and to set clear expectations for our suppliers.
Our relevant policies include:
Hasbro’s commitment to addressing the risks of forced labor in our supply chain is grounded in our Human Rights Policy. The Policy details our commitment to upholding our values and respecting human rights in our operations and business relationships, including our supply chain. We require our third-party suppliers and licensees to provide fair and safe working conditions for all workers and treat their employees with dignity and respect.
Hasbro’s Global Business Ethics Principles (HGBEP) and the Responsible Business Alliance (RBA) Code of Conduct guide our human rights and ethical sourcing practices within our global supply chain. The HGBEP standard has been approved by Hasbro senior management and the Board of Directors, is updated regularly and is communicated to the Company’s suppliers prior to starting any sourcing relationship as well as continually through our audit and remediation process. Facilities involved in the manufacturing of our products are required to abide by the HGBEP, which stipulate very clearly:
“Forced Labor - The use of forced, bonded, prison, indentured or compulsory labor in the production or manufacture of Hasbro products is prohibited. This includes modern forms of slavery, human trafficking, compulsory overtime or withholding personal papers, work permits, personal identification, or compensation. It is prohibited for factories to allow or require workers to pay employer or labor agent recruitment or other fees to obtain their employment. Workers shall not be subject to unreasonable restrictions of movement.”
The Hasbro Global Business Ethics Principles incorporates the Responsible Business Alliance (RBA) Code of Conduct by reference; and in the event of a conflict, the stricter standard applies. The RBA Code provides that, “[f]orced, bonded (including debt bondage) or indentured labor, involuntary or exploitative prison labor, slavery or trafficking of persons is not permitted.” In addition to the leading RBA Forced Labor standards, the RBA Code specifies that factories adhere to “Supplier Responsibility”, which includes “a process to communicate Code requirements to suppliers and to monitor supplier compliance to the Code.”
As part of the RBA, Hasbro also is committed to the Responsible Labor Initiative (RLI) Commitment on Forced Labor re-iterating the requirement of ensuring voluntary work, treatment of workers free from discrimination and harsh or inhumane treatment, no worker fee policy and reimbursement to workers who have already paid fees, no holding of workers’ passports, etc.
The Hasbro Ethical Sourcing Guide for Licensees stipulates the requirements for licensee partners to effectively manage their supply chain compliance, including to prevent Forced Labor, submit third-party audits for Hasbro Ethical Sourcing approval and responsibly remediate any identified issues. Licensee factories located in low-risk countries are required to submit a self-assessment questionnaire in order to identify foreign and/or contract labor, which would lead to further due diligence. In addition, licensees are required to complete a Forced Labor Due Diligence report ensuring that they are addressing potential forced labor risk. The Hasbro Ethical Sourcing Guide for Licensees is referenced in licensee agreements.
The Hasbro Conflict Minerals Policy includes our requirement that all third-party suppliers who produce Hasbro products which contain conflict minerals (tin, tantalum, tungsten and gold) complete an annual survey and only use Responsible Mineral Initiative (RMI) or London Bullion Market Association (LBMA) certified smelters.
The Hasbro Responsible Recruitment and Contract Labor Policy includes our requirements for the responsible recruitment, fair treatment and accountability of direct, contract and student workers in our supply chain involved in the production of Hasbro products, packaging, components and raw materials. The Policy builds on our existing standards to further specify how our global supply chain partners should proactively ensure compliance, including labor agent selection, training and monitoring, as well as a requirement to notify Hasbro if they develop new relationships with labor agents or educational institutions and/or plan to contract foreign migrant labor.
3. Risk Assessment and Due Diligence
The risk of modern slavery and human trafficking within our own organization is substantially mitigated as a result of our strict policies and procedures which integrate human rights and ethical sourcing into factory selection and ongoing business operations. The greatest risk of modern slavery and human trafficking is in our supply chain as we do not manufacture in owned facilities. However, we also evaluate human rights risk outside of our manufacturing supply chain.
As a result of our 2021 comprehensive human rights assessment, conducted by Verité and described in our 2021-2022 ESG Progress Report, we enhanced our human rights contract language with logistics providers and further expanded our monitoring efforts to include audits of our warehouses in high-risk countries, such as the UAE and India, for forced labor as well as other HGBEP compliance issues.
In order to identify and mitigate risk, we undertake regular due diligence and reviews which include:
We work with industry organizations, stakeholder groups, and other brands to evaluate and address human rights and labor risks including modern slavery, human trafficking and forced labor. Our RBA and RLI membership allow us to take advantage of tools to identify and address risk as well as share best practices with other members.
4. Audits, Ongoing Verification and Evaluation
Our Global Business Ethics Principles apply to all suppliers and licensees manufacturing Hasbro and licensed products. Before beginning a relationship with Hasbro, suppliers must sign onto our HGBEP requirements as a condition of their legal contract with Hasbro.
To ensure that our factories uphold our HGBEP requirements, Hasbro requires unannounced audits with third-party auditors, as well as subsequent follow-up and verification visits. We assess finished goods and subcontractor factories as well as conduct additional risk-based oversight audits of at least 10% of high-risk factories annually. While Hasbro is committed to working collaboratively with suppliers to improve ESG performance and respect for workers’ rights, Hasbro also retains the unilateral right to terminate its relationship with a supplier or licensee facility in violation of the Global Business Ethics Principles.
In addition, we conducted a supply chain Tier 2 & 3 mapping and assessment, including raw material suppliers and labor agents, to gain a deeper understanding of these suppliers and associated labor and human rights risks and conducted assessment of two (2) labor agents and one (1) subcontractor to identify and mitigate risks as well as understand their social needs. As a result of the mapping and assessments, we plan to conduct a workshop for Indian suppliers in 2023 regarding responsible recruitment, creating a culture of respect, and effective worker grievance systems.
Our approach to managing supply chain risk is to establish and maintain long-term partners that share our values. We believe that ongoing engagement best positions us to understand issues on the ground, build strong relationships with factories, enhance transparency and collaborate to proactively address issues. We evaluate the effectiveness of our work through:
Given that Hasbro’s direct supply chain is mainly in China, India and Vietnam (countries which generally have lower incidences of foreign migrant labor), we identify fewer instances of recruitment fees as well as lower fees than supply chains with significant foreign migrant labor. In 2022, our audits resulted in repayment of US $3,000 in worker fees to 50 workers, in addition to the more than US $60,000 in repayment fees to 800 workers in recent years. Through implementation of the Responsible Recruitment and Contract Labor Policy, we aim to mitigate risks of further incurrence of fees and improve factory accountability to self-monitor.
5. Training and Awareness
We ensure that factories are made aware and properly trained on the HGBEP by regularly engaging and educating our suppliers, auditors and internal teams on supply chain issues, including those related to modern slavery, human trafficking and forced labor. We do this by:
In addition, we actively engage with industry organizations (RBA, RLI), national and local government meetings (U.S. government panel on CAATSA, Mekong Club), expert consultants (e.g. Verité and Elevate), and other brands to stay abreast of the latest developments, issues and regulations and collaborate where possible. Our Global Ethical Sourcing and Human Rights team has also been an active participant on the RBA VAP Advisory Council.
6. Governance and Internal Accountability
Responsibility for the implementation of this policy rests with our ESG and Purpose team led by the EVP & Chief Purpose Officer, who reports directly to the CEO, and oversees the Ethical Sourcing and Human Rights team. Oversight for these policies resides with the Nominating, Governance and Social Responsibility Committee of the Hasbro Board of Directors (“Governance Committee”), as well as with Hasbro’s executive Environmental, Social and Governance Committee. In addition, the ESG and Purpose team regularly reviews and updates this policy in close collaboration with the functional teams. The Governance Committee approved this statement on August 4th 2023.
Eradicating human trafficking requires strong action and collaboration from governments, business, international organizations, and civil society. Hasbro is committed to regularly reviewing and continuously improving our approach to human rights, including human trafficking and modern slavery, and strengthening our approach as needed, to align with emerging laws, regulations and Hasbro core values.
Chief Executive Officer (CEO)