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The Transparency Act and due diligence

The Transparency Act is a relatively new law introduced in 2022 and aims to promote companies' respect for fundamental human rights and decent working conditions, and ensure public access to information.

Among other things, the law imposes a duty to provide information and a duty to carry out due diligence assessments that must be accounted for in a report that is submitted.

Under the Transparency Act, anyone can demand information from companies about how they handle actual and potential negative impacts that have been assessed in the due diligence assessments. This is called an information requirement.

A due diligence assessment is a process or a working method to identify, prevent, account for and follow up on how a company manages actual and potential negative impacts of its operations related to human rights and decent work.

OCH's Due Diligence Assessments - Method and Results

The risk assessment assesses for compliance and financial risk. Compliance risks include identification and assessment of beneficial owners, politically exposed persons, sanctions and watch lists, and a wide range of risks related to bribery and corruption, drug trafficking, human rights violations (e.g. forced labor, child labor, slavery), environmental crime, terrorism and business crime (e.g. tax evasion, money laundering, competition). Financial risk includes credit and liquidity risk assessed through consolidated reports from credit information institutions. We have used an automated third-party due diligence tool (Compliance Catalyst) to assess these risks as part of our supplier management framework.

A risk-based approach has been used to select relevant suppliers for the risk assessment. Suppliers in the top 95% consumption threshold were selected, which corresponds to a total of 15 suppliers.

The risk analysis showed that none of the 15 suppliers were associated with significant risks, which means that there is no need to take action due to risks related to human rights and humane working conditions.

For more information, see the report.