Retraced’s 20 risk factors reflect established guidance from recognized ESG and human rights frameworks, including the UN Guiding Principles on Business and Human Rights, the OECD Guidelines for Responsible Business Conduct, BAFA interpretations under the German Supply Chain Act (LkSG), and other internationally accepted ESG standards. These factors are shown below and structured across social, environmental, and governance domains.

If you would like to know more about the used risk sources, check out this list.

This factor assesses the systemic risks of minors being engaged in economic activity that interferes with their education, health, or development. It focuses on root causes such as economic precarity, limited schooling access, and weak labor inspection mechanisms, particularly in high-risk sectors like agriculture, mining, and manufacturing. The analysis considers how companies and supply chains can identify exposure points and address child labor risks through improved due diligence, social safeguards, and third-party verification, especially where labor protections are limited.

This factor explores patterns of harassment rooted in bias against identity traits such as gender, ethnicity, religion, disability, or sexual orientation. It addresses how such behaviors manifest across geographies and the role of workplace culture and institutional norms in enabling or challenging them. The risk assessment includes organizational accountability, access to redress mechanisms, and training efforts that contribute to inclusive, safe environments—key signals of ethical operations and human-centered governance.

This factor examines coercive practices that trap individuals in exploitative work situations, including threat-based control, restriction of movement, debt bondage, and recruitment deception. It includes risk zones where migrant workers, informal laborers, or subcontracted workers are disproportionately affected. This factor underlines how companies must detect such conditions and demonstrate responsible labor management practices throughout the value chain, particularly in outsourced or low-visibility segments.

This factor assesses whether workers can freely organize and negotiate with employers, and whether those efforts result in binding agreements that shape fair employment terms. The risk factor includes legal and practical barriers, such as retaliation or informal repression of worker organizing. It explores legal protections, union density, and the strength of bargaining frameworks, especially where power imbalances or anti-union behaviors exist. A transparent approach to freedom of association and industrial dialogue is a core signal of social responsibility and conflict prevention in workplaces. The degree of freedom of association is a recognized benchmark of ethical employment and is increasingly linked to external scrutiny in procurement and investor dialogues.

Focuses on the adequacy of safety practices to prevent accidents, injuries, or work-related illness. This includes hazard identification, emergency planning, use of personal protective equipment, and worker training. It reflects a company’s ability to operationalize preventive culture and protect workers in physically demanding or high-risk environments—a critical signal of social license to operate and internal control robustness. It evaluates whether protective measures, reporting mechanisms, and safety governance are effective and embedded across operations. High incident rates or safety non-compliance are often indicators of deeper risk governance failures, which can have reputational and operational implications.

This factor examines the alignment of wages with local cost of living, equity across demographic lines, and compliance with legal minimums. It also looks at the role of transparency and grievance mechanisms to address unfair pay practices. Wage fairness is a material indicator of decent work and inclusive growth, and its mismanagement can reflect structural inequality or labor exploitation risks.

This factor evaluates the design and enforcement of working time arrangements, such as shift scheduling, rest periods and/or overtime control that influence mental and physical well-being. Irregular or excessive hours can signal structural risks, including under-regulation, insufficient worker voice, or commercial pressure down supply chains. Responsible management of working time reflects both productivity interests and the employer’s commitment to safeguarding dignity and health at work.

Assesses the quality of air and pollutant emissions from production, energy use, or transport activities, considering their impact on local populations, health outcomes and ecosystems. It reflects operational performance on air pollution prevention, both in compliance terms and as a proxy for proximity-based environmental risk. Managing air pollution risks reflects environmental accountability and a company’s capacity to reduce harm from its operations or supply chains, especially on geographies marked by poor air quality.

Evaluates the health and stability of ecosystems through the diversity of species, genetic variation, and ecosystem functions. It also assesses threats to biodiversity such as habitat destruction, land conversion, resource overuse, or introduction of invasive species. This includes the check on policy effectiveness, conservation strategies and business behavior. Protecting biodiversity is essential to ecosystem stability, climate change mitigation and supply chain continuity. Companies are therefore expected to show responsibility around this focal area, even in indirect sourcing contexts.

Focuses on exposure to climate-related events such as heatwaves, floods, or droughts, and the broader instability caused by climate change, as well as adaptive capacity within operations or supply chains. It also considers how climate volatility may reshape societal structures, production zones and business continuity, which includes sensitivity of supply chains to climate impacts and the existence of adaptation and mitigation measures. Ultimately, it assesses the wide-ranging effects of climate emergency on the environment, human societies and economies. The analysis encourages forward-looking risk management that internalizes environmental realities and supports resilience across networks.

This factor evaluates the regulatory frameworks, exposure and management of hazardous chemical substances (procurement, handling, storage, and disposal). This includes examining the identification and classification of substances, effectiveness of safety protocols and protective measures, for both workers and communities, in order to avoid & mitigate impacts of chemical accidents and leaks. Mismanagement can lead to environmental pollution, worker harm, and community health issues, making chemical risk controls a key sustainability performance marker.

Captures risks arising from physical stressors such as noise, temperature extremes, vibration, or radiation that can impair worker health. Often overlooked but significant in industrial and logistic settings, these exposures accumulate harm over time, and require tailored prevention measures, from a business and governmental perspective. The presence or absence of such measures reflects how well operational safety systems capture non-visible risks and general worker wellbeing.

Evaluates the generation, treatment, and final disposal of solid and hazardous waste, including informal burning, landfill leakage, and recycling practices. It also considers circularity strategies, regulatory frameworks and material recovery. Waste mismanagement contributes to pollution and health hazards, while effective systems signal operational control, ecosystem awareness, and alignment with broader environmental risk governance.

This factor analyzes the availability, quality and management of water resources, including legal protections and policy effectiveness over hydric usage. This includes the evaluation of risks related to water stress, pollution, and poor infrastructure in operational or sourcing regions. Additionally, it supports the analysis on whether water is dealt as a shared and finite resource. This provides context for companies to demonstrate the expected stewardship over water access, ensuring their operations do not degrade vital ecosystems or community access.

Evaluates the prevalence, forms and impact of corrupt practices within organizations, industries or governmental bodies. This includes examining the mechanisms through which bribery, embezzlement, fraud, and other forms of corruption occur, identifying vulnerable sectors and processes, and assessing the legal and regulatory frameworks in place to combat corruption. The analysis also considers the effectiveness of internal controls, compliance programs, and ethical standards in preventing corrupt practices. Corruption damages fairness, disrupts markets, and increases reputational and legal risk—making robust anti-corruption systems a critical foundation for credible ESG and risk-based approaches.

Assesses adherence to ethical business conduct, including transparency, accountability, stakeholder engagement, and response to misconduct. Besides, it evaluates misconduct due to negligence, opacity, or poor governance. It includes reviews of corporate policies, whistleblower systems, and history of unethical behavior, or failing to act when harm is evident. Governance strength is both a foundational element of ESG and a key predictor of whether companies prevent, manage, or perpetuate harm in their operations. A strong ethics framework, transparency, and redress mechanisms are seen as baseline expectations in international due diligence norms—even where enforcement may lag.

Examines disparities in employment access, pay, stability, and career progression across gender, race, ethnicity, age, disability or other social characteristics. It highlights systemic structural exclusion from opportunity and the effects of bias in recruitment and promotion. Reducing inequality is central to social sustainability and workplace integrity, and failure to act may lead to legal scrutiny or stakeholder pushback.

Examines the prevalence, causes, and consequences of involuntary removal of individuals or communities, and the risks that stem from it, including those linked to infrastructure projects, land acquisition, or conservation. This includes assessing the legal and regulatory frameworks governing evictions, the extent to which these practices respect human rights and due process, and the impact of evictions on affected populations. The analysis also considers the motivations behind forced evictions and evaluates the adequacy of compensation, resettlement support, and legal recourse available to those displaced. Responsible land engagement entails free, informed, and fair processes that minimize disruption to communities and reflect respect for social and cultural ties to land.

Assesses the legal and customary status of land access, fairness in ownership, especially in rural or indigenous areas, which may include land grabbing, tenure disputes, and lack of formal registration. The analysis also reviews the effectiveness of legal frameworks and governance structures in protecting land rights, especially for marginalized and vulnerable populations. Additionally, it considers the implications of land rights disputes on social stability, economic development and the environment. Insecure land rights increase the risk of conflict, protest, or operational disruption, and require companies to engage carefully, transparently, and equitably in land transactions and sourcing practices.

Evaluates whether security actors (private or public) engage in excessive force, abuse, or human rights violations, especially in areas of weak governance. It includes analyzing the mechanisms of accountability and oversight in place to prevent such abuses. The analysis also assesses the impact of these practices on public trust, social stability, and international relations. Furthermore, it considers the role of training, operational guidelines, and cultural factors within security forces that contribute to or mitigate against such behaviors.