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„Seeking a dialogue“

Measuring and reporting on progress

 Core element 4 of the NAP / Supply Chain Due Diligence Act

In the National Action Plan on Business and Human Rights (NAP), the German government formulates its expectations for companies to respect corporate due diligence along the value chain. This is defined in five core elements (in German only):

  1. a human rights policy statement
  2. procedures for the identification of actual or potential adverse impact on human rights
  3. measures to ward off potentially adverse impacts and review of the effectiveness of these measures
  4. reporting
  5. a grievance mechanism
Starting point
Starting point: What are the requirements?
  • Use the developed action plan and your overview of processes and measures to bundle, supplement and align information and to realign your communication

Check implementation systematically

reading time approx. 2 min

It is crucial for the success of measures that their effectiveness is checked. Impact measurement is an important element for the continuous improvement of due diligence processes. For each measure the following question should be considered: What has it achieved?

Basic understanding: What to pay attention to?

Jump to implementation

Measuring effectiveness is a central element of corporate due diligence in order to systematically check the implementation of measures. Usually, relevant data should already be available, for example, on internal training or supplier audits. In general, there are three types of information for measuring effectiveness:
Key Performance Indicators for Due Diligence

Further Information: Information types for impact measurement:
Further Information: Information types for impact measurement
Type Description Examples Measurement
Processes Processes of sustainable supply chain management
Other company processes (e.g. purchasing, human resources)
Description of risk analysis
Description of audit processes for suppliers Internal training plans
Process descriptions Number of events (e.g. employee training, webinars or conferences on environmental and human rights issues)
Incidents including results of the evaluation of the grievance mechanism Incidents of environmental or human rights violations (e.g. non-compliance with waste disposal regulations or lack of safety standards in a production facility) Number of incidents, number of complaints resolved to the satisfaction of the complainants
Impact Long-term and systematic consequences of corporate activities
Health and environmental status of surrounding communities
No living wages
Results of impact analyses
Long-term indicators of environmental and health status (of government institutions)

Based on:
Guide | Shift | 2016 | Doing Business with Respect for Human Rights | p. 79 | click here.

Implementation: How to proceed?

Capturing the implementation and effects of measures
  • In a first step, record which measures have been implemented.
  • Consider how much time was required and who oversaw the implementation of these measures.
Defining indicators to determine the effectiveness of measures
  • Use various sources of information (both qualitative and quantitative data) to test the effectiveness of measures.
  • The following data sources can be used, for example:
  • Information from the grievance and reparation mechanism (see phase 5)
  • Surveys among employees, business partners and other potentially affected parties
  • Internal audit processes
  • Country reports (if your company operates internationally)
    Key performance indicators for due diligence
Collecting data
  • Generally, relevant data should already be available, e.g. on internal trainings or supplier audits.
  • In a final step, adjust measures depending on the results of the impact measurement. This may involve adapting the risk analysis (see phase 2) or revising training concepts.
    Supplier Review
    The Learning System

Communicate progress internally

reading time approx. 2 min

Inform your employees about the management approach and the progress made. This is how you motivate your workforce to continuously improve the due diligence process. Use the communication channels for HR or sustainability issues and expand them if necessary.

Implementation: How to proceed?

Collecting information and gaining an overview of your actions
  • Collect information from previous phases and steps, particularly the results of the impact analysis of your measures (see step 4.1 Checking Implementation systematically).
  • Include your results from the supplier evaluations to get a comprehensive picture.
  • Discuss the results and findings with colleagues. Which of the implemented measures worked well, which ones did not? Which goals and processes should be adjusted?
Selecting formats for internal communication
  • When it comes to internal communication, there is often no need to fundamentally revise the communication formats.
  • Internal newsletters, the intranet or similar communication channels are also suitable for communicating your sustainability performance.
  • Think about how you get your staff on board through targeted communication.
    Target Group-Oriented Communication
Checking what information to communicate for what purpose
  • It is important that you differentiate between formats of one-way communication (pure transmission of information) and those of two-way communication (exchange).
Implementation support: Using informal communication channels

In order to feed back progress into the sustainable supply chain management more quickly, it is helpful to use simple and informal communication channels. You can also discuss progress and make decisions in regular team meetings. Differentiate between communication formats that only “convey” information and those that foster exchange with your employees.

Team meetings, employee meetings or chat channels are well suited for the exchange of information, while newsletters and information or training videos on the intranet are more suitable for the direct transmission of information or the provision of tips and guidelines.

Seminars and other training formats that involve active discussion of ideas and expectations with your colleagues are well suited as an interim solution; you can communicate progress and goals, but also obtain feedback and suggestions.

Further suggestions on the topic can be found in the information package of the Business Workshop on internal and external communication (in German only) provided by the Helpdesk Business & Human Rights.


Communicate progress externally

reading time approx. 4 min

In order to meet the increasing demand for information on sustainability in the value chain, you should communicate externally about your activities. As an SME, this can be done through formal reporting, but also through an exchange with external actors in order to convey your expectations and progress in a targeted manner and to create a basis of trust.

Implementation: How to proceed?

Defining target groups and content
  • As a smaller company, you should decide whether to report formally and broadly or to use a targeted approach for external actors.
  • In formal reporting, the target groups and the content are broader.
  • For example: In a targeted approach, (potentially) affected persons can be informed about preventive measures or about ways to get in contact with the company.
    Target group-oriented communication
Selecting communication channels
  • The central communication channels are your sustainability reporting or your annual report.
  • Company principles, guidelines or your website are also important formats for external communication.
  • You can also use direct discussions with your customers and your own suppliers.
  • Depending on the purpose, priorities can be set; for example, those (potentially) affected can be informed about preventive measures or about ways to get in contact with the company.
  • Communicate your expectations through measures, for instance in the context of training courses or in exchanges with residents, employees, etc. (stakeholder engagement).
  • External grievance mechanisms can also function as a communication channel for affected persons to communicate with your company (see phase 5).
  • You can also use internal or external grievance mechanisms as channels of communication between those affected and your company (see phase 5).
Specifying a report format for formal reporting
  • When communicating externally, it is appropriate to first consider whether you want to report on your sustainability performance independently or in an integrated manner in existing formats.
  • Relevant existing formats include sustainability or annual reports.
  • Environmental and human rights issues are already reflected in reporting standards like the guidelines of the Global Reporting Initiative (GRI) or the German Sustainability Code (Deutscher Nachhaltikeitskodex (DNK)).
  • In contrast to conventional sustainability reports, which are created by companies themselves, for some SMEs the Common Good report (Gemeinwohl-Bilanz) (in German only) can be a format in which companies can audit each other or use external auditors. This type of reporting is particularly transparent.
  • However, human rights issues can also be dealt with separately in a separate report.
    Managing Grievences Effectively
Creating report contents
  • Reporting (like other phases in the Due Diligence Compass) should be understood as a process that you continue to implement over time.
  • Central stages of the value chain should be reported on including which sustainability risks are central at the respective stages.
  • In the interest of transparency, it is advised to disclose to what extent you have identified risks in your value chain.
  • Describe which measures you are implementing or plan to implement to address the risks (see step 3.3 Derive measures from risk management)
Further information: Dealing with reporting requirements

External communication can or must also take place within the framework of reporting obligations – depending on the size of the company and other criteria.

Even if your company does not fall under national law which among other things implements the EU Directive on non-financial reporting you may still be indirectly affected by them. Many large companies require specific information from their suppliers as part of their sustainability reporting.

It therefore makes sense to familiarise yourself with the reporting requirements and to view them not as an obligation, but as a guide. These guidelines and initiatives can help you:

  • The German Sustainability Code (DNK) offers companies an introduction to sustainability reporting. The "Guide to the Sustainability Code" provides assistance on the issue of value chain-related reporting.
  • The guideline "The NAP Business and Human Rights in the German Sustainability Code" (in German only) offers assistance for companies that want to report on human rights due diligence within the framework of a DNK declaration.
  • The "UN Guiding Principles Reporting Framework" is a guide for companies that want to report in accordance with the UN Guiding Principles on Business and Human Rights. It consists of a series of questions that companies should ask themselves in order to be aware of their responsibility for human rights issues, as well as recommendations on processes. You can work through these questions gradually.
  • The Global Reporting Initiative (GRI) supports companies in sustainability reporting and is an internationally recognised framework for transparent and accessible non-financial reporting.
  • The DGCN's information portal mr-sorgfalt.de contains examples from companies and a webinar on reporting and communication as part of human rights due diligence.

Hint: The Helpdesk Business & Human Rights can advise you on identifying the appropriate reporting format.

Continue with phase …

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