To be a successful business we must act responsibly. Due diligence is a framework that ensures the way we operate safeguards people and planet.
Due diligence
How we work with due diligence
Due diligence is an ongoing process that enables us to identify and address impacts and risks in our own operations, our value chain, and the products or services we sell. These could be risks to the environment or to people, including human rights. For many years, it has supported our decision making and has been integral to operating a responsible business.
To be effective, due diligence requires collaboration and engagement with our rightsholders, stakeholders and business partners in a transparent and honest way. To tackle systemic issues at industry or national levels, we need to engage with other actors. In the long run, due diligence has the potential to bring about change for the most vulnerable people and communities.
Our due diligence process
We continuously carry out due diligence across our value chain following the process set out by the UNGP and OECD:
- Embed responsible business conduct into policies and management systems.
We regularly update our standards and policies to ensure they remain valid and relevant. - Identify and assess adverse impacts in operations, supply chains and business relationships.
We use global and local procedures to continuously identify risks. Our teams located in production countries ensure we are up to date with local context and any changes. Our own employees, our business partners, plus employees working for suppliers in our value chain, can raise a grievance. - Cease, prevent or mitigate adverse impacts.
Our strategies include using monitoring programs in our value chain, capacity-building programs, partnerships and multi-stakeholder initiatives. - Track implementation and results
We continuously track prioritised risks and impacts. - Communicate how impacts are addressed:
We have reported on our sustainability work since 2002 and publish all the reports on our website. - Provide for, or cooperate, in remediation where appropriate.
Through our whistleblower channel, Speak Up, people can raise concerns about our own operations as well as our value chain. We do not tolerate retaliation against anyone who, in good faith, reports a grievance or participates in a grievance investigation. We also encourage open and collaborative dialogue as a regular way of working. We cooperate with initiatives that provide other types of grievance mechanisms, such as the National Contact Points for Responsible Business. In addition, a Global Framework Agreement with IndustriAll and IF Metall is in place to assist in resolving grievances at our direct suppliers and their direct partners. If we have caused or contributed to adverse impacts, for example where harm has occurred, we either provide or cooperate with remediation, depending on how we are linked to the impact. Our Remediation Guideline directs which approach we take.
Throughout this process, we work closely with rightsholders and stakeholders to ensure our continuous analysis is inclusive and up to date.
Find out more about our approach to due diligence in our Responsible Business Conduct Due Diligence Policy, Annual and Sustainability Report, Salient Human Rights Issue Report and Modern Slavery Statement.
A due diligence example – onboarding a new supplier
Our production supply chain includes hundreds of businesses around the world. When we take on a new supplier, due diligence helps us assess if they meet our environmental and social sustainability requirements.
All business partners must sign up to our Sustainability Commitment and our Code of Ethics. When evaluating a new supplier, we share these minimum requirements early in the process to create a common understanding and ambition from the start. These requirements span issues such as working conditions, environmental practices and corruption. In terms of wage payments, we also review public information to check if any disputes have been registered. In some cases, we will reassess a supplier if they carry out actions to raise standards and meet our requirements within a given period of time.
Due diligence doesn’t stop once we have onboarded a supplier. We conduct regular reviews to assess continued compliance and performance. If we find a violation, we have a process in place to correct the issue. As a last resort, we have the right to pause business until the issue has been remedied. In some cases, we may need to cease the business relationship. If we take this decision, we abide by ACT’s Responsible Exit Policy.
