The benefits of IRBC
Many countries already have legislation that obliges companies to identify and address risks in their supply chains, such as the Supply Chain Due Diligence legislation in Germany and the Duty of Vigilance Law in France. Additionally, EU Due Diligence legislation (CSDDD) will require large companies operating in the European market to implement due diligence. SMEs are currently not covered by the legislation, but they may expect more requests from -or be asked to meet the requirements by- large companies in the supply chain. Customers, consumers, financiers, and civil organisations also expect companies to take their social role seriously. Other reasons to engage in IRBC include:
Enhance your reputation
Mitigating risks and contributing to positive impact in the supply chain benefits your company's reputation.
Gain access to financial services
Banks and other financiers value effective risk management, including risks related to people and the environment. Companies are increasingly rewarded when they demonstrate their understanding of the supply chain and effectively mitigate risks.
Strengthen your market position
Companies that engage in serious conversations with their suppliers and customers build trust. This trust can be invaluable in unexpected circumstances (e.g., the COVID-19 pandemic, trade wars, crop failures).
Ensure supply chain resilience
Collaborating constructively with suppliers enhances supply chain resilience.
Attract talent
More and more (new, young) employees consider it important that the company they work for takes responsibility in countries where it conducts business.
Foster proud employees
Employees of companies that demonstrably 'do the right thing' are more committed to staying with the company and contributing to the joint mission.
IRBC for various roles in the company
Purchasing/procurement
Buyers select, negotiate, make agreements, and maintain relationships with suppliers. Buyers play a leading role in the application of 'due diligence' because they have direct contact with suppliers on social and environmental issues.
Marketing & Sales
The sales and marketing department is responsible for the company's sales. The sales department interacts with customers and translates customer needs into concrete products and services. Marketing ensures effective communication with the target audience, both online and offline. During the due diligence process, sales teams manage customer expectations, communicate sustainability efforts, and ensure suppliers are not unnecessarily pressured.
Legal Affairs
Legal experts ensure that contracts with customers, suppliers, employees, and other business relationships comply with the law or align with more comprehensive agreements. This department can ensure that agreements are translated into clear documents and procedures in the due diligence process.
Finance
The finance department ensures that the organisation has insight into its financial situation and manages all processes related to payments and receipts. In the due diligence process, the finance department can play a role by paying on time and according to agreements. Additionally, costs may be associated with ensuring due diligence, such as staff training and budget for remedial measures.
Sustainability
The sustainability manager or department coordinates, advises, organises, and inspires towards a more sustainable operation. In the due diligence process, the sustainability manager can take the lead in bringing together and mobilising the various functions within the company.
Human Resource Management
The HR department is responsible for attracting and retaining qualified personnel. The due diligence process requires specific skills from the staff. The HR department can hire qualified individuals and provide training to ensure all staff members can fulfil their roles.
This training is specifically designed for companies operating in one of the following sectors:
Textiles
The textile sector includes companies that produce clothing, shoes, bags, or other textile products such as bedding and towels. Many textile supply chains begin in agriculture, where animals are raised for their hides and plants are grown to produce fabrics. These fabrics are then processed and used to make clothing or shoes. The textile sector is labour-intensive, and child labour or poor working conditions can occur in all stages of the supply chain. Therefore, it is important to research the relevant risks in the textile supply chain. You can find tips specific to the textile sector at this icon.
Food
The food sector includes companies that produce agricultural crops, process them into food products, and sell them to consumers. All food supply chains begin in agriculture, where animals are raised, and crops are produced. Especially in supply chains with many small-scale farmers, there is a risk of child labour and insufficient wages. Therefore, it is important to investigate and discuss the risks with suppliers. You can find tips specific to the food sector at this icon.
Electronics/Metal
The electronics sector involves manufacturing electronic devices or components, often complex products with various types of metals and minerals. The metal sector comprises a wide range of companies, from those in construction to those producing tiny metal components. The electronics and metal sectors have risks to the environment, biodiversity, and human rights. The supply chain is often not transparent, making it challenging to address risks. For example, refineries and smelters often source their metals from different suppliers, making it difficult to trace their origins. You can find tips about the electronics and metal sector at this icon.
Mining
In the mining sector, minerals and ores are extracted from the ground for further processing. Many everyday products contain these substances, often valuable and frequently sourced from conflict areas. Unfortunately, there are many abuses in small-scale mining. Therefore, it is essential to thoroughly investigate whether these abuses are present in your supply chain. You can find tips specific to the mining sector at this icon.