Many governments around the world are using legislation to drive responsible business practices and positive impacts on people’s working conditions. These laws require companies to manage their operational impacts on people and the environment and report on their efforts. It’s important to know which of these laws apply to your business and how to comply.
One of the most recent changes in this area is the new Human Rights Due Diligence Law adopted by the German parliament on June 11, 2021.
From 2023, this law will require large companies to conduct supply chain due diligence activities. Companies will need to identify, prevent, and address human rights and environmental abuses within their own and their direct suppliers’ operations, and take actions if they find violations.
The law aims to ensure that social and environmental standards are maintained in large companies’ operations and supply chains to address the following risks:
Who does this new law affect?
What do the affected companies need to do?
1. Your supply chain
2. Your own operation.
How can affected companies prepare for this change?
If this – or any similar law – applies to your business, it’s most important to have a clear internal process to understand and assess your supply chain:
Step 1: Define your scope
Map your suppliers and put in place a preliminary risk analysis to better understand your supply chain and current CSR capabilities.
Step 2: Pre-assess your suppliers’ CSR conditions
Conduct a deeper evaluation to identify your most reliable suppliers, the ones requiring action, and those with zero tolerance issues. You can then prioritize your program and create an action plan.
Step 3: Apply relevant actions based on identified risks and priorities
Deploy an adequate action plan based on the identified issues and their risk levels and implement remediation programs to improve the suppliers’ performance.
Many other countries have enhanced their regulations on human rights, such as:
How API can help you prepare for these legislative requirements: