Today, company due diligence is more important than ever before. The climate crisis and a growing awareness of human rights abuses have triggered a wave of new due diligence and disclosure legislation that is making sustainability a matter of legal compliance. The German Supply Chain Act, which went into effect in January 2023, is one critical example. The law requires companies with more than 1,000 employees based in Germany, as well as foreign companies that do business in the country, to take steps to identify and prevent human rights and environmental violations in their supply chains.
At the Rainforest Alliance, we have long advocated for mandatory due diligence legislation. Not only does it send a powerful signal to companies and help level the playing field for those already doing their part, but it also promotes a culture of continuous improvement and provides momentum for sector-wide collaboration. Our human rights and environmental due diligence approach aligns with international frameworks and best practices, including the ILO conventions, the UN Guiding Principles on Business and Human Rights, and the OECD Guidelines for Multinational Enterprises. While the responsibility to conduct due diligence remains with companies themselves, the Rainforest Alliance can help businesses meet requirements through our certification program and tailored supply chain services.
How Rainforest Alliance certification helps companies meet due diligence requirements
The German Supply Chain Act covers eight requirements, spanning preventive measures and risk management to grievance mechanisms and remediation.
Here’s how our certification program can help companies fulfill each requirement:
Requirement 1: Introduce a risk management system along the entire supply chain (§ 4.1)
Buying Rainforest Alliance Certified products is a key policy decision that helps a company manage risk and put its sustainability commitments into action. Our 2020 Sustainable Agricultural Standard includes rules for farms and companies, with a requirement that all farm certificate holders and supply chain certificate holders in high-risk areas implement an “assess-and-address” system. These systems incentivize farmers and companies to tackle issues like forced labor, child labor, discrimination, and workplace harassment and violence rather than hide them. Our standard also requires farmers not to use hazardous pesticides and reduce overall pesticide use by implementing Integrated Pest Management approach. Farms and farm groups must also have internal inspection systems and grievance mechanisms in place to monitor all the requirements of the Rainforest Alliance standard.
Requirements 2 & 3: Define an in-house responsibility (e.g., a human rights officer) that ensures regular updates to management (§ 4.3) and adopt a policy statement on the company human rights strategy (§ 6.2)
The Supply Chain Requirements in the Rainforest Alliance 2020 Sustainable Agricultural Standard make it mandatory for supply chain actors to have a “responsible business conduct” policy in place that details plans for preventing, mitigating, and remediating human rights and environmental harms. Oversight and responsibility for the policy and its implementation must be assigned to a member of the senior management team.
Requirement 4: Conduct regular risk analyses, including business areas of suppliers (§ 5)
One of the key components of effective due diligence is the ability to adequately identify and prioritize risks. All Rainforest Alliance farms, as well as some supply chain certificate holders, must have a risk assessment, mitigation, and monitoring system in place. To help certificate holders with risk analysis, the Rainforest Alliance has already identified risks of certain adverse impacts and built them into our certification system. For example, certified farms must use our child labor and forced labor risk maps. In addition, our basic Risk Assessment Tool, which is a required step for all certified farms, guides farmers on how to assess and mitigate their most urgent human rights and environmental risks. We also require an In-Depth Risk Assessment Tool for farms in higher-risk countries and sectors.
Requirement 5: Take preventive measures within the company’s own business unit (§ 6.1, § 6.3), in relation to direct suppliers (§ 6.4) and, when relevant, indirect suppliers (§ 9.3)
Each Rainforest Alliance certificate holder must create a management plan to mitigate their key social and environmental risks—including those related to their suppliers—and monitor progress on that plan. If, during audits, our authorized certification bodies (whose job is to check for violations of the standard, including those related to human rights) identify non-conformities, certificate holders must correct them or they will lose their certification.
Requirement 6: Take remediation measures whenever an infringement has already occurred in its own business or of its direct suppliers (§ 7.1-3)
Human rights violations identified by auditors must be remediated using the Rainforest Alliance Remediation Protocol, a rigorous tool aligned with international best practices. The protocol details mandatory steps as well as good practices. Examples of remediation can include ensuring a child returns to school, repayment of unpaid wages, or the dismissal (and/or disciplining) of a perpetrator of workplace harassment. Farms can also use Sustainability Investments from buyers to remediate human rights violations.
Requirement 7: Set up a complaint procedure or participate in an external one, provided it meets a minimum set of criteria (§ 8)
Through our certification program, all farms and supply chain actors are required to have a grievance mechanism in place to monitor all of the requirements of the Rainforest Alliance standard, with third-party auditors confirming that such mechanisms are in place and functioning. In the rare instances when farmers or farm workers feel that their grievances have not been appropriately resolved, they can escalate them to the relevant certification body’s grievance mechanism and then to the Rainforest Alliance’s own grievance procedure if necessary. Certification bodies are the third-party auditing firms that check if farms and farm groups meet the requirements of certification.
Our guidance on grievance mechanisms provides support to certificate holders on how to set them up.
Requirement 8: Maintain documentation on the fulfillment of its due diligence obligations (§ 10.1), submit an annual report to the competent authority on compliance (§ 10.2), and make it publicly available free of charge on its website (§ 10.4)
Rainforest Alliance certification is working to provide independent, credible data which can be included in a company’s due diligence reporting. In addition to data from audits, our 2020 Sustainable Agricultural Standard sets indicators for farm certificate holders to track and report on over time. For example, the number of cases of child labor, forced labor, discrimination, and workplace violence and harassment that are found by farms’ own self-monitoring systems, as well as cases reported and remediated. For more information, please refer to our full listing of these indicators and our estimated timelines for data reporting.
Rainforest Alliance supply chain services for targeted company due diligence support
While Rainforest Alliance certification goes a long way in helping companies meet due diligence requirements, our supply chain services are also a good option for companies looking for tailored support. Services include risk mapping and supplier engagement to identify risks and opportunities in a company’s supply chain, monitoring and evaluation support for on-the-ground investments, and collaborative field interventions that deliver impact and catalyze change. Learn more about how our teams can help your company embrace and implement the key elements of due diligence and meet the requirements of the German Supply Chain Act.