Case: Safeguarding Human Rights: Comprehensive Supply Chain Risk Assessment
Challenge
As a recent signatory to the UN Global Compact, the client had committed to safeguarding human rights. According to the UN Guiding Principles on Business and Human Rights, a risk analysis is one of the core elements of due diligence in the field of human rights. Deloitte was engaged for conducting such an assessment.
Transparency in the supply chain is essential for safeguarding human rights and ensuring ethical practices across the globe.
Solution
We developed a company-specific analysis approach by defining appropriate risk factors such as production country and sector. Moreover, we identified global suppliers, which accounted for around 60% of the client's purchasing volume and collected data from selected suppliers by means of a questionnaire. Deloitte executed analysis and identified high risk suppliers, which were further screened based on publicly available information. Due to a large amount of Chinese high-risk suppliers, they were screened for their presence in the province Xinjiang, which is particularly prone to human rights violations of ethnic minorities. Lastly, we defined risk mitigation measures, which were presented to the executive management team.
Impact
Deloitte enhanced the client's understanding of their own supply chain, identified high-risk suppliers and thus established an important first step in their holistic human rights' due diligence process. Moreover, we prepared the client for potential upcoming German and EU legislation on supply chain due diligence.
