MODULE CONTENTS
This module presents the different methods of assessing human rights and environmental risks for corporate subsidiaries and suppliers. It covers external audits, self-assessments and other tools for verifying the presence of risks and implementing corrective measures. Regular risk assessment enables companies to master the issues related to their supply chain and subsidiaries, and to ensure compliance with due diligence obligations.
TRAINING OBJECTIVES
Risk Assessment: Ensuring Subsidiary and Supplier Compliance
After identifying potential risks through risk mapping, companies must carry out an in-depth assessment of the actual human rights and environmental risks for all their subsidiaries and suppliers. This assessment helps to verify the presence of risks and to determine the actions to be taken to control them.
Assessments of subsidiaries and suppliers are carried out on a regular basis, either before or during the business relationship. External auditing is one of the most common evaluation methods. It involves calling in specialist service providers to visit sites, meet with management, interview staff and examine available documentation. These audits are often followed by a report, recommendations, or even the labelling of suppliers or their products.
An alternative to external audits is self-assessment. This is carried out using questionnaires developed by organizations or client companies, and enables results to be compared between suppliers, sectors or countries. If a self-assessment is judged unsatisfactory, an audit may be recommended to take a more in-depth look.
Companies must also assess their indirect suppliers and raw material producers. This is a complex process, requiring a good knowledge of the supply chain and a long-term evaluation plan.
For subsidiaries, internal audits, social and environmental impact studies, and other tools such as CSR reporting are used to assess compliance. These assessments help to identify areas for improvement and to implement corrective actions.
The results of these assessments are essential for ensuring compliance with the duty of care, and for creating a constructive dialogue between the company, its subsidiaries and suppliers. They also contribute to the continuous improvement of the company's social and environmental practices.
