Legislation and international organizations define a tightening legal framework in which companies have to operate today. The standards and regulations are complex and constantly evolving which poses new challenges for companies.
German Supply Chain Due Diligence Act (LkSG)
On June 11, 2021, the German Parliament passed the Supply Chain Due Diligence Act. For the first time, it creates a legal framework for due diligence and reporting obligations along the supply chain. It requires the affected companies to implement a risk management system to check all direct suppliers for compliance with human rights standards, take preventive and corrective measures and publish an annual report.
The OECD Guidelines set standards for responsible business conduct across a range of issues such as human rights, labour rights, the environment, information disclosure, and combating bribery. In May 2011, OECD members and adhering governments updated the Guidelines and introduced substantial new provisions in areas such as human rights, due diligence and supply chain responsibility.
The Paris Agreement is a legally binding international treaty on climate change that came into force on November 4, 2016. Its goal is to limit global warming to well below 2°C, preferably to 1.5°C, compared to pre-industrial levels.
The Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal is a multilateral environmental agreement that aims to protect human health and the environment against the adverse effects of hazardous wastes. It requires its Parties to ensure that such wastes are managed and disposed of in an environmentally sound manner.
The Foreign Corrupt Practices Act (FCPA), enacted in 1977, generally prohibits the payment of bribes to foreign officials to assist in obtaining or retaining business. The FCPA can apply to prohibited conduct anywhere in the world and extends to publicly traded companies and their officers, directors, employees, stockholders, and agents. Agents can include third party agents, consultants, distributors, joint-venture partners, and others.
UK Bribery Act
The United Kingdom (UK) Bribery Act of 2010. An Act to make provision about offences relating to bribery; and for connected purposes. Allowing penalties of an individual or a company with any link to the United Kingdom no matter where the crime occurred.
The Kyoto Protocol is an international agreement linked to the United Nations Framework Convention on Climate Change, which commits its Parties by setting internationally binding emission reduction targets.
Environmental Protection Agency (EPA)
In partnership with state governments, tribal governments and other federal agencies, The United States Environmental Protection Agency (EPA) works to assure compliance with the nation's environmental laws to help protect public health and the environment.
The Office of Foreign Assets Control (OFAC) (USA) administers and enforces economic and trade sanctions based on US foreign policy and national security goals against targeted foreign countries and regimes, terrorists, international narcotics traffickers, those engaged in activities related to the proliferation of weapons of mass destruction, and other threats to the national security, foreign policy or economy of the United States.
On January 1, 2022, the Ordinance on Due Diligence and Transparency in the Sectors of Minerals and Metals from Conflict Areas and Child Labour (ODDT) came into force in Switzerland. It requires Swiss companies to fulfil due diligence obligations regarding conflict minerals and metals and/or child labour in their supply chain and to report annually on the fulfilment of the due diligence obligations.
UN Guiding Principles
The UN Guiding Principles on Business and Human Rights are a set of guidelines for states and companies to prevent, address and remedy human rights abuses committed in business operations. They form the basis for the National Action Plans for Business and Human Rights (NAPs) as adopted by several countries, and are an important basis for the implementation of human rights due diligence in companies.
Science-based targets provide companies with a clearly-defined path to reduce greenhouse gas (GHG) emissions in line with the Paris Agreement goals. Targets are considered ‘science-based’ if they are in line with what the latest climate science deems necessary to meet the goals of the Paris Agreement – limiting global warming to well-below 2°C above pre-industrial levels and pursuing efforts to limit warming to 1.5°C.
The POPs Regulation aims to protect human health and the environment with control measures that prohibit or severely restrict the production and use of persistent organic pollutants (POPs) and ensure the environmentally sound disposal of waste consisting of, or contaminated by POPs in the European Union.
With the Occupational Safety and Health Act of 1970 (USA), the Occupational Safety and Health Administration (OSHA) has been created to assure safe and healthful working conditions for working men and women by setting and enforcing standards.
The Health and Safety at Work etc. Act 1974 (UK) is the primary piece of legislation covering occupational health and safety. The Health and Safety Executive, with local authorities (and other enforcing authorities) is responsible for enforcing the Act and a number of other Acts and Statutory Instruments relevant to the working environment.
International labor standards are legal instruments drawn up by the United Nations International Labor Organization's constituents (governments, employers and workers) and setting out basic principles and rights at work. They are either conventions, which are legally binding international treaties that may be ratified by member states, or recommendations, which serve as non-binding guidelines.
UK Modern Slavery Act
Modern Slavery Act (2015). An Act to make provision about slavery, servitude and forced or compulsory labor and about human trafficking, including provision for the protection of victims.
Directive 2014/95/EU shall enhance the consistency and comparability of non-financial information relating to environmental matters, social and employee-related matters, respect for human rights, anti-corruption and bribery matters. This also includes supply and subcontracting chains.
Norwegian Transparency Act
The Norwegian Transparency Act came into force on July 1, 2022. Affected companies must carry out due diligence to identify actual or potential negative impact on human rights and working conditions in the supply chain and take measures accordingly. The method and findings of the due diligence must be published in an annual statement.
ILO Labour Standards
Since 1919, the International Labour Organization has developed and maintained a system of international labour standards aimed at promoting opportunities for women and men to obtain decent and productive work, in conditions of freedom, equity, security and dignity. They are an essential component in the international framework for ensuring that the growth of the global economy provides benefits for all.
GHG Protocol Standards
GHG Protocol establishes comprehensive global standardized frameworks to measure and manage greenhouse gas emissions from private and public sector operations, value chains and mitigation actions. The GHG Protocol Standards provide requirements and guidance for companies and other organizations that want to assess the emissions impact of their operations, products and value chain.
The Minamata Convention on Mercury is a global treaty to protect human health and the environment from the adverse effects of mercury. It sets out a range of measures to control the supply and trade of mercury, including setting limitations on specific sources of mercury such as primary mining, and to control mercury-added products and manufacturing processes in which mercury or mercury compounds are used, as well as artisanal and small scale gold mining.
AMLD IV (EU)
AMLD IV (EU) is the European Union Anti-Money Laundering Directive that further reinforces EU rules on anti-money laundering to counter terrorist financing and increase transparency about who really owns companies and trusts. The EU has set up strong rules to combat money laundering and the financing of terrorism, to prevent the EU financial system from being misused for these purposes.
Dodd-Frank Act Section 1502 (USA)
Section 1502 of the Dodd-Frank Act (USA) requires persons to disclose annually whether any conflict minerals that are necessary to the functionality or production of a product of the person, as defined in the provision, originated in the Democratic Republic of the Congo or an adjoining country and, if so, to provide a report describing, among other matters, the measures taken to exercise due diligence on the source and chain of custody of those minerals, which must include an independent private sector audit of the report that is certified by the person filing the report.
United States Customs and Border Protection (CBP)
U.S. Customs and Border Protection has direct responsibility for enhancing U.S. economic competitiveness. By reducing costs for industry and enforcing trade laws against counterfeit, unsafe, and fraudulently entered goods, CBP is working to enable legitimate trade, contribute to American economic prosperity, and protect against risks to public health and safety.
The Corporate Sustainability Reporting Directive (CSRD) is the EU Commission’s proposal to strengthen the nature and extent of sustainability reporting in the EU over the next years. The CSRD proposal significantly enhances the scope of the existing Non-Financial Reporting Directive and will affect approximately 50.000 companies in the EU. Furthermore, it introduces more detailed reporting requirements, and the requirement to report according to mandatory EU sustainability reporting standards.
EU Conflict Minerals Regulation
On January 1, 2022 the EU Conflict Minerals Regulation came into force. It requires EU importers of tin, tantalum, tungsten and gold (“3TG”) to comply with, and report on, supply chain due diligence obligations if the minerals originate (even potentially) from conflict-affected and high-risk areas. The regulation is largely inspired by the US Dodd-Frank Act (2010).
European Green Deal
The European Green Deal was approved in 2020 and encompasses a set of policy initiatives by the European Commission with the aim to reduce GHG emissions by 55% until 2023 and make the European Union climate neutral by 2050. The set of measures (“Fit for 55”) includes the revision and extension of existing EU regulations as well as the addition of new regulations and setting up of funds.
Financial Anti-Terrorism Act
"International Money Laundering Abatement and Anti-Terrorist Financing Act of 2001 (USA). Amends criminal law to include foreign corruption offenses as money laundering crimes. Establishes Federal jurisdiction over: foreign money launderers (including their assets held in the United States); and money that is laundered through a foreign bank (...)"
EU Framework Decision on Terrorism
Measures against offences of public provocation, recruitment and training to terrorism. Adopted in most EU countries. The decisions define terrorist offences, as well as offences related to terrorist groups or offences linked to terrorist activities, and set down the rules for transposition in EU countries.
UK Counter Terrorism and Security Act 2015
The Counter-Terrorism and Security Act 2015 (UK) contains powers to help the UK respond to the threat of terrorism. The act will disrupt the ability of people to travel abroad to engage in terrorist activity and then return to the UK, enhance the ability of operational agencies to monitor and control the actions of those who pose a threat and combat the underlying ideology that feeds, supports and sanctions terrorism.
SOX (Sarbanes-Oxley Act)
The Sarbanes-Oxley Act of 2002 (USA) is an act to protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws, and for other purposes.
Various National Data Protection Legislation
Various National Data Protection Legislations, e.g. UK Data Protection Act, it controls how personal information is used by organizations, businesses or the government. Everyone responsible for using data has to follow strict rules called ‘data protection principles’.
UK Environmental Protection Act
Environmental Protection Act 1990. An Act to make provision for the improved control of pollution arising from certain industrial and other processes.
Companies are required to monitor their supply chains for:
- Environmental Protection
- Carbon Footprint
- Science Based Targets
- Energy Management
- Hazardous Substances
- Waste Disposal
- Green Sourcing
- Human & Labor Rights
- Modern Slavery
- Forced & Child Labor
- Health and Safety
- Living Wages
- Diversity, Equity & Inclusion
- Working Conditions
- Occupational Safety
- Health Protection
- Treatment of Employees
- Equal Rights
- Gender Equality
- Conflict Minerals
- Corruption and Bribery
- Money Laundering
- Economic Sanctions
- Trading Partner Security
- Data Protection & Privacy
- Blacklist and Denied Parties
- Information Security
- Whistleblower System
- Sub-contractor Violations
- Corporate Responsibility
- Financing of Terrorism
- Cyber Security
- Conflict-free Sourcing
There are multiple international organizations setting standards across various ESG areas.
IntegrityNext has transformed complex sustainability requirements into 26 questionnaires based on the relevant standards.
Pre-built & ready-to-execute
Ensure compliance with international sustainability standards and regulations using pre-built supplier assessments. Updated regularly so you are always on top.
Covering all major sustainability and compliance topics
Adhering to international standards and regulations
Applicable to all company sizes and industries