RED FLAG # 14

The business’s commercial success substantially depends upon commodities with unclear provenance and visibility into impacts on workers or communities.

For Example
  • Using resources with limited traceability (including mass balance and spot markets):
    • Agricultural and other “soft” commodity products (e.g., wood/paper, sugar, coffee, cocoa, wheat, soybeans, cattle, palm oil, cotton)
    • Energy (e.g., oil and gas)
    • Metals, minerals and metalloids (e.g., iron ore, copper, aluminum, gold, cobalt, silica)
Higher-Risk Sectors
  • Commodity traders, including:
    • Trading companies
    • Companies with trading arms
    • Market-based/ financial sector commodity traders
  • Companies using commodities in the process of manufactured products, including:
    • Agricultural commodities:
      • Food and beverage industry
      • Fast-moving consumer goods industry
      • Apparel industry
    • Metals, metalloids and precious stones:
      • Jewelry companies (e.g., metals and precious stones)
      • Electronics and IT industries
      • Renewable energy industry (e.g., polysilica)
    • Minerals and elements (e.g., mica, cobalt):
      • Electronics and IT industries
      • Automotive industry
      • Paints and coatings industry
      • Cosmetics and personal care industry
      • Construction industry
  • Greenhouse gas emissions-based market participants, including:
    • Trading companies
    • Carbon offset project developers
    • Carbon market intermediaries and brokers
    • Corporate offset buyers