Assess risk to people, environment and climate in your business operations
Create a risk overview
Map out all potential and actual negative impacts on human rights, environment and climate
You must look at the entire value chain to get the full picture. Examine all activities of the company itself and your suppliers, and make sure you get all the way down to the first link in the value chain.
Your company can cause direct negative impacts on human rights and environment through your own activities such as discrimination in recruitment. And you can be directly associated with negative impacts through harmful working conditions at a supplier, use of pesticides or child labour in the harvesting of a crop, or in other ways.
Below you will find three important sources of information for when you need to assess the overall risks.
Ask the internet
You can find a lot of information online. Many publicly available resources can help you track down what risks might be in your particular value chain – many of them are well-known risks associated with specific countries, industries, production processes, products and supplier types.
One such resource is CSR Risk checker: A simple and user-friendly tool. Select a product, material, service and/or country of origin. A report is generated highlighting what to be aware of in relation to human rights, labour rights and the environment with this particular product and country.
Use the resource list below as a guide to known problem areas and good sources of information.
In addition, the visualisation tool below can help you ask the right questions and get around the entire value chain.
Ask your suppliers
Here you will need to dig a little deeper and look specifically at your suppliers. Where are they geographically? Who are they and who are the owners? Are they subject to third party audits? Do they have certifications? What is their reputation?
Initiate an important dialogue with your suppliers. Especially those who are in an industry or country where you have found challenges or risks.
Ask your suppliers what human rights challenges and environmental impacts they have identified. Ask them about the specifics you have found. Ask how they work to prevent and remedy adverse effects. A special supplier questionnaire can be a good tool for opening the dialogue. The supplier will provide views on a number of issues about local conditions and processes and can explain existing initiatives and the general approach to human rights, environment and climate. This is a good start
Be aware that a full risk assessment with the supplier often requires close cooperation and patient dialogue. It is important to create an understanding with the supplier of why you are asking – and it is important for you to understand why they may not always tell the whole truth.
Ask stakeholders and experts
Involving different stakeholders is crucial. They can be Danish and local trades unions, NGOs, industry organisations or cooperation platforms such as Ethical Trade Denmark, where you can receive feedback and information.
Identifying relevant stakeholders and experts depends on your business and product range, but you may find important pieces of the overall risk picture from third parties. They may provide insight into risk areas that you would not otherwise have identified and help you to zero in on how you can make a positive impact.
Local community organisations are aware of specific challenges in industries in their country. For example, if you have Indian trading partners, it may be relevant to speak to an expert or organisation that is aware of infringements related to the caste system, and if you use large amounts of wood, you can speak to an NGO specialized in management of forests. Other local stakeholders may be your own employees and workers in the supply chain. They can tell you directly about challenges they are experiencing. Whistleblower schemes and grievance mechanisms (see also step 6), kan indholdet fra disse bruges til at skærpe jeres fokus.
Letz Sushi engages stakeholders by working with WWF and various certification schemes to obtain information on potential risks in the fishing industry. warfair receives information from the diaspora in Denmark about conflict-affected countries with which they trade. You can read about Letz Sushi og warfair.
Tool guide
Resource list
Please note that these are general risk tools. Information obtained must be processed and developed to be relevant to your specific activities.
CSR Risk Checker
Select product, material, service and/or country of origin.
A report is then auto-generated, highlighting human rights issues to be aware of in relation to the chosen country and product.
Videncenter for Bæredygtige Værdikæder
Please note, the site is in Danish.
Here you can find knowledge, guides, tools and cases on labour rights, human rights, environment and climate from different sources, compiled by Ethical Trade Denmark.
Commodity Atlas
Overall labour rights risks associated with specific commodities.
Special risks overview
A brief overview of the most risk of common human rights impacts and environmental risks in selected sectors.
Business and Human Rights Resource Centre
The general risk overview for human rights changes all the time. Stay up to date on news and reports from the Business and Human Rights Resource Centre.
Global Compact Self Assessment Tool
The UN Global Compact Self-Assessment Tool is a good starting point for your risk assessment.
Visualisation tool – ask the right questions and map your value chain
Ask yourself these very specific questions for each link in the value chain, so you can more easily identify challenges related to products, raw materials, components, and services that you buy and sell.
Risk overview for selected sectors
Food and agriculture
Understand labour rights
In some countries – both inside and outside the EU – migrant and seasonal workers are widely employed in the agricultural and food cluster. These workers are often particularly vulnerable. Typically, they are on short-term contracts and cut off from the opportunity to ensure that their fundamental rights are respected in terms of wages, accommodation, and other issues. As a purchasing or producing company it is crucial for you to focus on these areas of concern.
It is therefore recommended that you and your company ascertain that workers are not deterred from organising themselves in trade unions. Working with relevant professional organisations can help to identify risks and uncover violations and help prevent negative impacts.
3 tips to avoid beginner’s mistakes in risk assessment
1) Be thorough and take your time
The more thorough you are in gathering information about your specific value chain, the sharper your risk assessment will be. Ask the internet, ask the suppliers, ask all conceivable stakeholders and experts to gain the most comprehensive knowledge possible. This gives you a valuable mapping that can also benefit your organisation’s work in other business areas.
2) Consider how your activities relate to human rights and environment
It is crucial that you keep a critical eye on how your activities and stakeholders relate to problems you identify. Example: It is not sufficient to identify a risk to the right of “freedom of expression”. You must also be completely clear about who is affected and how the risk factor is affected by your activities. If, say, you are working with a steel or packaging supplier in Asia, there may be a risk that the freedom of expression of the supplier’s employees will be violated because they are not entitled to certain political beliefs or religious freedom.
3) Listen, learn and build trust
Finding the right balance between trust and control over a supplier can be difficult. The best way forward is to start a dialogue about the challenges and jointly prepare a Code of Conduct, rather than just issuing demands. Be open and genuinely interested when asking suppliers about their situation and give them time to provide input and explain their views. Close cooperation with openness and trust always leads to better results.
Prioritise and choose
Once you have developed the big risk picture, you must prioritise and decide about areas to focus on as you move forward.
See how others are working with human rights, environment and climate
SKAGERAK: Concrete measurements provide valuable overview
Special risks in the production of millstones in Ethiopia
Human rights due diligence in conflict-affected areas
About this guide
This guide is aimed at small and medium-sized businesses - i.e. companies with 2 to 250 employees, across industries. Human rights due diligence is relevant whether you are in the B2C or B2B market, import, export or have your own production in Denmark.
The purpose of the guide is to help SMEs in their work with human rights, environmental and climate due diligence - regardless of company size and resources. The guide provides inspiration on where to start and how to strengthen your current processes.
The guide has been prepared by Ethical Trade Denmark. A first version of the guide - focused on human rights and targeted at the food cluster - was developed in collaboration with the Danish Agriculture & Food Council and Arla, co-financed by the Danish Business Authority.
The guide may not be modified, reproduced or translated without prior written agreement with Ethical Trade Denmark. The guide may only be used in educational contexts with clear credit to Ethical Trade Denmark, including a clear logo.
