Assess the risk to people taking part in company activities
According to international guidelines from UNGP and the OECD, among others, you should prioritise your areas of focus based on the following criteria:
- Severity – how serious is the negative impact?
- Scale – how many people are affected?
- Possibility of remediation – can the damage be repaired?
The risks that you consider to be the most serious must be dealt with first. Permanent damage or loss of human life are two examples.
Once you have set priorities based on severity, you can decide on sub-priorities based on probability. Here you must consider the likelihood that a negative impact will occur. However, it is important to emphasise that all companies should, of course, handle all risks – even those that end up in the green field in the matrix below.
When you have prioritised based on severity and probability, you must consider how you and your company can use your influence. Influence can be exerted on many levels and in many contexts. Even a short conversation with suppliers and stakeholders can make a difference and be a positive first step in a joint effort.
If you are a small player in a larger market or you buy from a large supplier, working with other companies or joining an interest group may be a good idea.
Should priority be determined by volume or risk?
Companies with many different products in their range should prioritise according to where the risks are most serious – not by volume of products. The guidelines recommend prioritising based on both severity (type of impact) and scale (how many people are affected). Therefore, a priority may vary depending, for example, on the number of people who may be adversely affected.
If a company buys vanilla just a few times a year that does not mean related risks should not be prioritised. It’s about the risk to the people involved in any value chain. Thus, considering what measures can be taken to lower the risk profile is still necessary.
Purchasing volume and the size of the contracts are relevant in the sense that more people can be negatively affected in the case of larger quantities. At the same time, volumes can be important in relation to influence and what actions can be taken by a purchasing company. But it is not relevant to prioritisation.
Who determines what is “serious”?
All kinds of human rights violations are bad, and determining which violation is the most egregious may be difficult. How do you prioritise between the risk of deforestation related to one product and lack of freedom of association related to another? You do not necessarily have the expertise to be able to assess either the severity, scale, or the possibility of remediation, and it is important to remember that you do not have to make your priorities all by yourself.
By involving experts, organisations, and other relevant stakeholders in the very early stages, you can continuously have your assessments confirmed or refuted. Having your decisions validated in this process brings more peace of mind. Members of the Danish Initiative for Ethical Trade can get in touch through the multi-stakeholder network and enter into a dialogue with trade union movements, civil society organisations, and others.
Overview of tools
- Resource list
- Overview of risks inherent in food segments
- Visualisation tool – ask the right questions and map out the value chain
Be aware that these risk tools are very general. It is always necessary to process the information to suit your specific activities.
Case stories from small and medium-sized businesses in the food cluster
About this guide
This guide is aimed at small and medium-sized businesses in the food cluster, i.e., companies with between two and 250 employees working in agriculture and horticulture, fisheries, fish farming, agroindustry, food production and ingredients. Human rights due diligence is relevant whether you are in the B2C or B2B market, importing, exporting or have your own production in Denmark.
The guide was prepared by the Danish Initiative for Ethical Trade, in collaboration with the Danish Agriculture & Food Council and Arla Foods, and co-sponsored by the Danish Business Authority. The guide may not be changed, reproduced or translated without prior written permission from the Danish Initiative for Ethical Trade. If used in a teaching context, it must be with a clear acknowledgement of the partners behind the development of the guide, crediting them clearly, including use of relevant logos.