Supply chain
As part of the counter-proposal to the Responsible Business Initiative, Art. 964j of the Swiss Code of Obligations stipulates that Swiss companies must comply with due diligence obligations throughout the entire supply chain – and report the results. These requirements apply to the import of minerals and metals from conflict and high-risk areas, and to child labour. Germany has already introduced supply chain legislation and the European Union (EU) adopted an EU-wide supply chain directive (Corporate Sustainability Due Diligence Directive, CSDDD) in summer 2024, which is now being transposed into national laws.
In addition to official regulations, other factors demand respect for human rights along the entire supply chain. Committing to responsible business practices has become a precondition for market access and customers increasingly expect companies to report on their practices.
Many businesses find it challenging to fully grasp their own supply chain. Those who have drawn up a carbon footprint for all 3 Scopes and examined their suppliers more closely have an advantage. For companies beginning the process, the federal government has established a Business Support Platform as part of the National Action Plan for Business and Human Rights. The due diligence process for human rights involves the following six steps:
1. Analyse the value chain
Briefly summarise your company’s value chain – from procurement of raw materials to usage of the end product. In this step, review which due diligence measures your company has already taken in the area of human rights.
2. Identify and assess risks
Next, identify potential risks concerning human rights, working conditions, and ethical business conduct. This analysis should include environmental aspects which will also facilitate reporting on sustainability. Ensure the identified risks are evaluated both qualitatively and quantitatively.
3. Set targets and define measures
Based on the risk analysis, you can then establish measures such as supplier audits, supplier training or a Supplier Code of Conduct. At this point at the latest, you should also issue a company Policy Statement on Human Rights.
4. Implement measures
Introduce the predefined measures and integrate them into daily business processes and supply chain activities. Regular communication with your suppliers is essential. If your company operates primarily in one region, you may also invest in supporting standards directly in local communities.
5. Launch a reporting procedure
Clarify which regulations your reporting must fulfill and identify expectations of your most important stakeholders. Report regularly on progress regarding implementation of due diligence in the supply chain. Measure and monitor the effectiveness of measures based on KPIs (Key Performance Indicators).
6. Create a system for handling complaints
Establish a mechanism for employees, suppliers, and other stakeholders to voice concerns or complaints related to the supply chain. Ensure that any problems identified are addressed properly.