Due Diligence: Practical Actions for SMEs

7 Actions to Be Implemented in the Company’s Policies and Management Systems.

What Actions Can You Take within Your Company? 

1. Determine the strategy you want to implement in order to make responsible business conduct part of the company’s DNA.
2. Entrust the implementation of due diligence and its follow-up to motivated and conscientious employees. The broader issues of responsible business conduct (RBC) also need to be addressed with the company’s entire staff.
3. Some employees with specific experience can bring their skills to the process. Other workers who want to get involved can be trained in the field of RBC.
4. Internal communication about RBC is essential. It should take place in all departments and at regular intervals (e.g., training workshop).
5. External communication should not be neglected (e.g. publishing the actions implemented on the company's website).  

What Actions Can You Take Regarding Your Suppliers?

1. Communicate key aspects of RBC that have been implemented in your company to your current suppliers. Negotiate with them in order to achieve an upgrade until the end of the contract.
2. In new contracts with your business partners, include clauses and rules regarding RBC issues. Choose pre-qualified business partners.

8 Actions to Identify and Assess Negative Impacts in Operations, Supply Chain and Business Relationships

What Actions Can You Take within Your Company? 

1. Identify all your activities and all your business partners.
2. Identify, within your activities, the aspects that require specific attention in terms of responsible conduct.
3. Check regularly that your information is up to date.

You can consult this sample tool to assess country and product risks.

What Actions Can You Take Regarding Your Suppliers?

1. Among your partners' main activities, identify the aspects that need specific attention in terms of responsible conduct.
2. Identify, if possible, your suppliers' suppliers and their potentially problematic activities regarding responsible conduct.
3. Update this information regularly.

Examples of supplier assessment tools: 

What Actions Can You Take Regarding External Stakeholders?

1. Consult with affected or potentially affected stakeholders and rights holders or their legitimate representatives.
2. Consult with internal or external experts if necessary.

Using a 'risk table' helps to prioritise the aspects that require action to be taken.

7 Actions to Stop, Prevent or Mitigate Negative Impacts

What Actions Can You Take within Your Company:

1. Identify measures to prevent, mitigate and stop the identified negative impacts. Include in your company's policy how to avoid and deal with these negative impacts and ensure compliance.
2. Make staff responsible for ensuring that these measures are implemented.
3. If you are contributing to negative impacts caused by another entity, take steps to stop doing so.

What Actions Can You Take Regarding Your Suppliers?

1. Wherever possible, use your influence on your business partners to encourage them to reduce their negative impacts. For example, advise or assist them in developing appropriate plans to reduce their negative impacts (timetable, qualitative and quantitative indicators to measure progress).
2. In your contracts, it is essential to foresee consequences in the event of non-compliance with the commitments made to reduce the negative impacts identified. Identify the situations in which the contract can be terminated (as a last resort), if the commitments are not met or if the measures adopted fail.

What Actions Can You Take Regarding External Stakeholders? 

1. Promote interaction and exchange with the affected stakeholders and rights holders (including their representatives). This will enable you to develop and implement an appropriate action plan.
2. Encourage cooperation with other actors, as this allows for collective influence on suppliers. For example, collaborate through sector associations or interact with public authorities on sector-specific risks and different types of available support.

Monitor the Implementation and Results of Your Actions

• Monitor the implementation and effectiveness of your company's own due diligence commitments, its activities and objectives (e.g. surveys, audits, either internally or with the assistance of third parties). 
• Regularly assess your business partners to ensure that they are taking steps to prevent or mitigate their negative impacts.
• On negative impacts your company may cause regarding human rights and the environment, engage in dialogue with your workers or their representatives, with environmental organisations...  

Communicate on how Impacts Are Being Addressed

• Make information on due diligence processes adopted by your company publicly available, in an accessible and appropriate format (e.g. on your website...) 
• If you plan to commission a labour rights, human rights or environmental audit or assessment survey, you may want to consider sharing the results with affected stakeholders and rights holders (while respecting confidentiality requirements).

Repair Damage Caused by Your Own Means or in Cooperation with Other Actors 

• Put in place internal and external redress mechanisms proportionate to the potential harm caused by your company's activities.
• Provide your workers with a space for complaints where they can appeal to collective organisations.