How do Travanleo’s solutions come into play in the wake of Germany’s new due diligence act? (LkSG)
Are you a large-scale enterprise with a registered office in Germany with more than 3,000 employees? Then, you would be in the know of Germany’s new Supply Chain Due Diligence Act (initially called the Supply Chain Act). What does the Act really mean for you? Let’s find out!
The Act mandates large businesses (headcount of at least 3,000 employees in that country or abroad) across industries to monitor their supply chain functions for human rights violations. It also expects companies to facilitate checks and balances that prevent environmental degradation. In short, the Act places the onus on companies to stay aware, agile, and proactive about their due diligence obligations within the ambit of supply chain operations. Starting Jan 01, 2024, companies with 1,000 employees or more will also come under stipulations of this legislation.
This German legislation essentially translates into strong provisions that require companies to analyze Environmental, Social, and Corporate Governance (ESG) risks. Companies will need to devise measures to prevent and mitigate potential violations, build grievance mechanisms, and enable strong reporting on regulatory compliance activities. To comply, they will need to chart out distinct policies and be able to convince regulators that they have robust digital processes to enforce and measure the effectiveness of related policies.
Against this background, how will companies tackle their accountability and compliance functions within the sphere of worker rights, environmental sustainability, and due diligence? They indeed seem to have their task cut out.
Let’s get to the specifics. For starters, the Act stipulates organizations to do the following:
- Build a robust risk management system.
- Make a conscious effort to Identify and minimize human rights and environment-related risks.
- Allocate resources (both people and money) to take stock of risk mitigation.
- Conduct an annual risk analysis and get key stakeholders to stay cognizant of it.
- Develop a reliable mechanism to review compliance tasks and policy effectiveness.
- Draw up a policy statement on human rights strategy for subsequent use and adoption.
With this stage set, Travanleo’s digital solutions for compliance are designed to handle several nuanced aspects, such as supplier risk assessment, risk scoring, robust surveying, dynamic grievance management, and powerful reporting.
Let’s delve a little deeper into the features and benefits of using our digital compliance management solution, to understand how it helps organizations achieve the objective of regulatory compliance adherence and management.
Robust data management for greater transparency
Data exchanged between several disparate teams within the supply chain framework leaves it fragmented, lost, or even miscommunicated. Travanleo’s data-driven solutions are enabled to collect data in real-time from third-party organizations to monitor several aspects, such as unsafe working conditions or poor vendor management, within the supply chain framework. This helps build a system based on trust and transparency as it flags inefficiencies or unjust practices right upfront.
Increased automation for operational efficiency
Automated warehousing and real-time remote fleet management can give companies a bird’s eye view of what happens where and if intervention is required at a certain point. Smart technology such as cloud-based GPS and cost-effective Bluetooth Low Energy (BLE) asset tracking tools can be implemented for real-time tracking and to make room for corrective action at the optimal time. Companies can leverage Travanleo’s automation and business intelligence capabilities to improve adaptability and optimize supply chain operations, thereby optimizing the supply chain.
Centralized risk management for increased visibility
Building centralized access and control to important supply chain operations facilitates cost savings for businesses and takes care of data silos and data redundancy, thus saving time. With automation taking the lead on activities like supplier approval and vetting, Incident management Travanleo’s compliance management system helps businesses stay on top of their compliance game by sending out useful notifications, reminders, and the like. A centralized system for compliance allows enterprises to obtain the data they need to assess, monitor, and analyze their suppliers’ compliance through a single 360-degree view of suppliers’ and sub-suppliers hierarchies globally.
What’s the takeaway?
Supply chain compliance requires a holistic approach beyond robust compliance programs or dynamic data-driven capabilities. With Germany’s LkSG Act, organizations in the region need to consider compliance as a crucial culture mandate, strongly amplified by powerful reporting and analytics tools.
Get in touch with Travanleo for more details.