Due diligence is different from companies' traditional risk-management and compliance approaches. Because companies can be associated with adverse impacts throughout their supply chain, so they will need to apply due diligence to companies beyond their direct or immediate suppliers.

Due diligence is also risk-based. However it is not focused only on risks to the company, but rather on risks that companies can cause, contribute to or are linked to - on people, the planet and society.

Risk-based also means that companies can priorities actions beginning with risks that have the most negative or severe impacts on people and the planet, and act accordingly. While developing due diligence strategies, companies should take into consideration the views of stakeholders such as workers, affected community members, civil society organizations and others - that may be affected by the companies’ operations and investment decisions.

Companies who carry out due diligence process are expected to provide access to remedy and consider ways in which their business decisions can contribute to negative impacts. A functioning due diligence system, enables companies to consider how their actions may cause or contribute to harm in the supply chain.

Source: OECD (2018) OECD Due Diligence Guidance for Responsible Business Conduct