EOS: Broadcom - Environmental – Human rights due diligence and disclosure

Details of engagement:

EOS began engaging with the company on human rights due diligence in 2020 in light of its low score on the Corporate Human Rights Benchmark (CHRB). Given the company’s market-leading semi-conductor position and potential to have a significant impact on its suppliers, they encouraged the company to conduct supply chain human rights due diligence and to set green supply chain objectives. In 2021, EOS had a positive meeting with the company where it explained it had joined the Responsible Business Alliance and would leverage this commitment to make its human rights programme more robust.

Outcomes and next steps:

We welcomed that in its 2021 ESG report, the company continued annual due diligence of its supply chain for the use of conflict minerals in the design and manufacturing of its products, and it undertook several initiatives to strengthen its human rights programme within its supply chain.

In 2022, the company released its human rights principles and slightly improved its 2022 (CHRB) performance from 2.5/26 in 2020 to 13.5/100 in 2022, putting it at the bottom 10-20% of companies scored. Despite this, EOS recommended voting for the company’s governance committee chair by exception to their human rights policy. This was in light of the company’s slight improvement in the CHRB and its progress in releasing its human rights principles, which we appreciate may not yet be fully reflected in its current scores.

EOS thanked the company for the principles and were pleased to learn that our engagements contributed to their release, but will continue to engage with the company to enhance its performance assessment on human rights and supply chain rights.

At time of publication Broadcom is held in our Passive Smart Beta Equities portfolio.