Third Parties

Many European companies have passed regulations to anchor human rights and environmental standards in supply chains. In Germany, the Supply Chain Due Diligence Law (Lieferkettensorgfaltspflichtengesetz) came into force in 2023, the UK Modern Slavery Act has been in place since 2017, and other European countries such as France, Norway and Switzerland have since followed suit with similar regulations. All these laws are to varying degrees based on the United Nation’s Guiding Principles for Business & Human Rights, as first published in 2011.In 2024, the European Corporate Sustainability Due Diligence Directive is expected to be passed, this will further raise requirements from companies.

The German Supply Chain Due Diligence Act (LkSG) applies to companies headquartered in Germany with more than 3,000 employees from January 2023. From 2024, the law will apply to companies with more than 1,000 employees. Foreign companies’ subsidiaries in Germany, who exceed these employee numbers, are also covered by the law. Foreign companies that sell to affected German businesses, along with small German businesses, also feel the impact. This is because the larger German firms under this law are asking their suppliers to follow the same rules.

Third Parties plays a crucial role in the overall non-financial risk management of your company, particularly addressing Supply Chain Due Diligence, requirements . As such, it helps you comply with specific regulations such as the German Supply Chain Due Diligence Law (Lieferkettensorgfaltspflichtengesetz or LkSG), or other nationally relevant supply chain due diligence regulations.

Third Parties is primarily designed to help users comply with common supply chain due diligence requirements, e.g. those of the German Supply Chain Due Diligence Act, of similar supply chain due due diligence laws in other countries, or of the UN’s and OECD’s related requirements. The user can also customize the types of potential legal violations managed in the system, as well as the measures to manage risks of violations. This opens a broad range of further application possibilities in regards to the management of other compliance risks. However, the tool is not intended for the management of commercial risks.

Third Parties can benefit companies across all industries, sectors, and countries. It offers users the flexibility to incorporate industry or sector-specific violations and measures, ensuring wide-ranging applicability. It also contains abstract risk ratings for all major sectors.

Third Parties is a comprehensive non-financial risk management solution, particularly focused on addressing human rights and environmental risks. It is specifically tailored to prioritizes risks based on criteria such as the potential number of affected individuals, the severity of effects, the probability of occurrence, and the potential for remediation.

Third Parties offers several features to assist you in prioritizing your efforts to manage risks effectively:

• a. Abstract Risk Calculation: The system automatically calculates an abstract risk score for suppliers based on country and sector as soon as they are uploaded to the risk manager.
• b. Filtering Capabilities: Third Parties allows you to filter suppliers based on various criteria for e.g., abstract risk, spend, number of employees, country, sector, and user tags. This enables you to focus on suppliers that may pose higher risks or are of greater significance to your organization.
• c. Supplier Evaluation: For additional information on your suppliers, our supplier evaluation feature enables you to efficiently obtain further first-hand information from your suppliers, helping you to assess supplier-specific risks.

Third Parties continuously documents your due diligence efforts, including the risk analysis, its results, and the measures you take in order to manage risks. Based on this, the risk manager can automatically compile most of the answers to the questions which the BAFA (Bundesamt für Wirtschaft und Ausfuhrkontrolle) asks in it’s digital reporting platform.

Yes. Third Parties provides a range of training and support resources to assist users in their risk management efforts. This includes a comprehensive library of violations that encompass the protected positions defined by the LksG and a library of measures to effectively manage and prevent these violations. Furthermore, Third Parties includes a selection of templates such as the Declaration of Principles, training materials, and audit checklists.

Third Parties is currently available for use in German and English. However, new languages will be added soon.

EQS Group supports compliance with the European Data Protection Regulation (GDPR) and other data protection regulations worldwide through various measures at the organizational, technical and functional level.

At the organizational level, through measures taken for information security and data protection in the form of a proper and certified ISMS according to ISO 27001 standards. This is subject to regular internal and independent audits.

Customers have the option to use both private or public clouds, with private clouds being offered in France, Germany and Switzerland.

The estimated timeline for implementing Third Parties, including supplier data upload and integration, typically ranges from 2 to 6 weeks.