Performing supplier due diligence is an essential part of ensuring compliance with regulations and protecting your business from potential risks. It involves conducting a thorough review of your suppliers to ensure that they are operating in a responsible and ethical manner, and that they are in compliance with relevant laws and regulations.
Here are five key risks to consider when doing supplier due diligence:
Forced labor: The United Nations Guiding Principles on Business and Human Rights (UNGPs) and the UFLPA regulation prohibit the use of forced labor in the supply chain. When performing due diligence, it's important to ensure that your suppliers are not using forced labor or other forms of exploitation.
Environmental compliance: Regulations such as REACH and the EU's General Product Safety Directive require companies to ensure that the substances they use and sell are safe for human health and the environment. When performing supplier due diligence, it's important to assess whether your suppliers are compliant with these regulations.
Human rights: The UNGPs require companies to respect human rights in their operations and supply chain. When performing supplier due diligence, it's important to assess whether your suppliers are respecting the human rights of their workers and other stakeholders.
Bribery and corruption: Bribery and corruption can have significant negative impacts on a company's reputation and bottom line. When performing supplier due diligence, it's important to assess whether your suppliers are complying with laws and regulations that prohibit bribery and corruption.
Financial stability: The financial stability of your suppliers can have a direct impact on your business. If a supplier goes bankrupt or experiences financial difficulties, it can disrupt your operations and lead to lost sales and revenue. When performing supplier due diligence, it's important to assess the financial stability of your suppliers.
To help companies perform supplier due diligence, Cloudsyte offers a sustainability compliance platform that simplifies the process and provides ongoing support. The platform includes a range of features such as a supplier database, guidance documents, and tools for managing and reporting on compliance.
By using Cloudsyte, companies can reduce their compliance risks and protect their reputation, while also supporting responsible and sustainable business practices.