- Step 1: Engage Stakeholders and Partners
- Step 2: Assess risks and impacts
- Step 3: Develop code of conduct
- Step 4: Communicate and Train across your supply chain
- Step 5: Monitor compliance
- Step 6: Remediate violations
- Step 7: Independent review
- Step 8: Report performance
Assessing External Impacts and Risk Factors
“External” impacts and risks encompass both those linked to your company’s operations, products or services through business relationships, over which you can and should exert influence, and risks of which you have less control, such as arising from national laws or developments in wider operating environments.
If your company is considering sourcing from a new country or geographic area, you are probably already carrying out other forms of risk assessment. Human rights/social compliance risk assessment should be built into those processes. This is addressed further in the next section, Risk and Impact Information Gathering. The assessment should involve identifying people or groups who may be affected by your business activities and projecting any adverse impacts that could occur. At a minimum, the assessment should involve desk research, field research in the target country/community, and then a baseline round of pre-sourcing audits to assess current levels of compliance. More information on how to conduct these types of audits is included in Step 5, Remediate Violations.
If your company already has well-established supply chains in which you have relatively stable business relationships, you should assess the impacts of and risks associated with those supply chain actors. This should be done first through a supply chain mapping exercise, together with gathering information on the suppliers most in need of oversight, desk research, field research in the target areas, and a baseline round of audits on those suppliers to assess their current level of compliance. These baseline data allow you to identify suppliers’ potential areas for improvement. More information on how to conduct these types of audits is included in Step 5, Monitor Compliance.
“Questions of complicity may arise when a business enterprise contributes to, or is seen as contributing to, adverse human rights impacts caused by other parties… business enterprises may be perceived as being 'complicit' in the acts of another party where, for example, they are seen to benefit from an abuse committed by that party.”
Source: United Nations, Guiding Principles on Business and Human Rights, 2011.
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