Supply chain due diligence is the process by which an organization systematically identifies, prevents and mitigates human rights and environmental risks in its supply chain and reports on this work.
The approach is risk-based: not all suppliers are expected to be examined to the same depth. A risk classification is made using criteria such as country, industry, process and volume, and the depth of assessment is determined according to that class.
The process usually includes the following steps: establishing the policy, risk analysis, preventive measures, corrective actions, a grievance mechanism, monitoring and reporting. The obligations of companies within scope are passed on to their suppliers through contracts.
Related terms: Self-Assessment Questionnaire (SAQ) · Second-Party Audit · Supplier Development
Related service: Supplier Sustainability Assessment and Due Diligence