due diligence assessment

A due diligence assessment is a systematic process where businesses identify, prevent and address risks of adverse impacts on human rights and decent working conditions. The methodology is based on the OECD Guidelines for Multinational Enterprises and has become a central tool in public procurement, particularly since the EU adopted the Corporate Sustainability Due Diligence Directive (CSDDD) in 2024.

How does a due diligence assessment work?

The OECD model describes six steps forming a continuous cycle:

1. Embed responsible conduct into the company's policies and management systems
2. Identify and assess actual and potential adverse impacts across own operations, the supply chain and business relationships
3. Cease, prevent or mitigate adverse impacts
4. Track implementation and results of measures taken
5. Communicate how impacts are addressed
6. Provide for remediation and grievance mechanisms where required

The assessment must be risk-based and proportionate — the most severe risks are prioritised first, and the effort is scaled to the company's size and context.

Due diligence in EU/EEA public procurement

The CSDDD (Directive 2024/1760) formally bridges due diligence obligations with public procurement. Under Article 31, contracting authorities may take compliance with due diligence requirements into account as award criteria or contract performance conditions. Non-compliance can lead to exclusion from procurement processes, with fines of up to 5 % of a company's global turnover.

In practice, suppliers competing for public contracts must demonstrate that they have systems in place to map and manage risks across their supply chains — especially for high-risk goods and services. In Norway, the Transparency Act (åpenhetsloven) requires larger businesses to perform due diligence assessments and publish annual reports. Tools like Cobrief can help suppliers identify tenders where such requirements apply.

Due diligence assessments are increasingly a prerequisite for responsible public procurement across the EU/EEA. With the CSDDD establishing a common framework and national laws like Norway's Transparency Act setting detailed obligations, businesses are expected to maintain robust systems for identifying and addressing adverse impacts on social and environmental conditions throughout their value chains.