Check Your Value Chain

With the Supply Chain Due Diligence Act, the Federal Government aims to comply with the United Nations Guiding Principles on Business and Human Rights. The reason for this is the outcome of the action plan adopted in Germany in 2016 to prevent human rights violations in the value chain: Too many companies do not sufficiently protect human rights in their global supply chains.

The Supply Chain Due Diligence Act was passed in 2021 to ensure that respect for human rights and environmental protection is implemented in a binding manner throughout every company's supply chain.

Unlike other solutions on the market, there is no need to pre-select business partners in Check Your Value Chain. All your existing business partners are analysed and continuously monitored. Automated risk assessment of suppliers, continuous monitoring and evaluation of more than 10,000 multilingual media sources and verification of up to 200 evaluated certificates can save up to 500 man-days.

Unique on the market is the double secured media analysis: In addition to AI-based media analysis, an editorial secured media analysis of the renowned NGO Business and Human Rights Resource Centre (BHRRC) is carried out.

The following regulations apply to our own company as well as to our direct suppliers:

• Draw up a policy statement and define internal responsibilities
• Record a risk management and a risk analysis on the topic of human and environmental rights - at least annually or additionally as the occasion arises.
• When identifying risks: take preventive and remedial action
• Ensure grievance mechanisms and procedures to identify risks, including with indirect suppliers.

The following regulations apply to our own company as well as to our direct and indirect suppliers:

• Conduct an effectiveness review of the measures and procedures put in place - at least annually or additionally if there is cause to do so.
• Publication of internal documentation and external reporting - once a year (no later than four months after the end of the financial year)

The risk assessment of suppliers prevents child labour, slavery, forced labour, disregard for occupational health and safety, unequal treatment in employment, discrimination, the use of private/public security services and their disregard for human rights, and the withholding of a decent wage.

The environmental risks covered by the new law include the non-environmentally sound handling, collection, storage and disposal of waste (POPs Convention), the production and use of persistent organic pollutants (POPs Convention), the production of products with added mercury, the use of mercury and mercury compounds, the export and import of hazardous wastes (Basel Convention), harmful soil/water/air pollution, harmful noise emissions, excessive water consumption, and the unlawful clearance and deprivation of land, forests and water bodies.

The implementation effort is conceivably low at 5 days, as no interfaces are absolutely necessary due to the existence of import and export functionalities. Organisational units, roles / users can be set up in one to one and a half days.

The CSDDD will significantly tighten the requirements of the SCDDA. For Germany, this means that the content of the SCDDA must be adapted by the legislator in line with the directive. The CSDDD provides for a strict framework of sanctions in the event of violations. The national legislator has been given a period of two years to implement this. Companies that have already implemented the SCDDA today will also be well prepared for the CSDDD. The functions of our SCDDA software Check Your Value Chain will cover the changes in the future. Important to know:

• Companies with at least 1,000 employees or a total annual turnover of at least 1,500 million euros are obliged by the CSDDD.
• In contrast to the SCDDA, which only requires monitoring of direct suppliers and, in the event of positive knowledge of risks or violations, of indirect suppliers, the due diligence obligations under the CSDD cover the entire supply chain.  
• In addition to traditional human and labour rights, environmental protection and an ambitious climate target plan based on the goals of the Paris Agreement are also required.

We have also created a summarised free overview here, which contains the most important information regarding SCDDA and CSDDD.