SCDDA Software “Check Your Value Chain”
Your expert for questions
Dr Jan Joachim Herrmann
Partner, Procurement & Sustainable Supply Chain at PwC Germany
Tel: +49 211 981-5890
Email
How you can identify and mitigate risks in your supply chain
Companies with more than 3,000 employees are required to implement the German Supply Chain Due Diligence Act (SCDDA) by the end of 2023. Are you prepared? If not, we have developed a solution to help you get ready. With our “Check Your Value Chain” software, it is possible to be compliant with the requirements of the SCDDA efficiently and with minimal resource expenditure while also ensuring complete transparency regarding risks.
The solution helps organisations to gain a holistic overview of their entire business partner portfolio – from their own business activities through to suppliers and customers. The key feature of the application is its comprehensive and automated risk analysis of business partner portfolios that applies market-tested risk levels. Risky business partners are thus quickly and easily identified.
In addition to analysing and identifying risks, the software enables you to immediately define and track measures for risky business partners. The application thus assists companies via a highly automated and cost-efficient approach to meeting the requirements arising from the law.
“No company is able to save the world on its own. We can only solve problems like forced and child labour if everyone does their part. That is exactly what the SCDDA facilitates.”
Recognition: PwC wins the SAP Innovation Award 2023 in the Partner Paragon category with the Check Your Value Chain software: By using SAP technology, PwC offers its clients a powerful solution that efficiently addresses the requirements of the Supply Chain Due Diligence Act with manageable resources and full risk transparency.
About the award: Each year, SAP presents the Innovation Awards to acknowledge the achievements of forward-thinking companies that use the latest SAP technologies to create intelligent solutions that have a positive impact on the economy, environment and society and help shape a more sustainable future.
Recognition: PwC's Check Your Value Chain software was awarded 3rd place in the category “New Business Models” of the Corporate Digital Responsibility (CDR) Award. The Award recognized the capability of CYVC to ensure compliance with human rights and environmental protection standards in value chains.
About the award: The CDR Award recognises companies and organisations that demonstrate an outstanding commitment to corporate digital responsibility that goes beyond legal requirements. It aims to inspire competition and raise awareness of the importance of digital responsibility in shaping a sustainable future. The award recognises both practical approaches and theoretical work, internal processes and ideas that span the entire supply chain (B2B2C).
Overview of the advantages for you
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The German Act on Corporate Due Diligence Obligations in Supply Chains
The challenge
From 1 January 2023, German companies with more than 3,000 employees will be required to assess their global value chains and to implement the statutory obligations. From 1 January 2024, the provisions relating to supplier risk management will also apply to companies with more than 1,000 employees. The objective is to increase transparency in supply chains and to bolster human rights.
Furthermore, it can be expected that additional amendments will be made to the SCDDA in the medium term in order to transpose European requirements into national law. This is because the European Commission submitted its proposal for an EU Supply Chain Due Diligence Act in February 2022.
There is still a lack of clarity about how some parts of the SCDDA will be interpreted. What is clear, however, is that companies are required to perform a comprehensive risk analysis of their supply chain. Manually reviewing each and every business partner in order to comply with the law is close to impossible. This would entail an enormous workload, needlessly tying up staffing resources and necessitate the rollout of more costly processes.
In order to be ready at the start of 2023, it is important to set up your structures and procedures for risk analyses now. Companies need to have an overview of how their processes work and which tools are being used.
The questions that you should consider in advance are:
- Do we know the suppliers that are involved in the processes of our global supply and value chain and therefore must be assessed?
- Have we clarified who is responsible for compliance with the due diligence requirements within our company? Do we have sufficiently trained staff in the areas of purchasing, compliance and legal etc. to overcome the additional operational workload for reporting requirements and supplier management?
- Do we have an established risk management system? Has an efficient method been identified to detect risks in the supply chain?
- How are the results of the risk analysis evaluated?
- Which preventive and corrective measures are suited for the risks and incidents that have already been detected?
- How can we set up our annual public reporting in a legally secure manner?
- How do we successfully integrate the complaint procedure into supply chain evaluations?
- How should I recognise substantiated knowledge in relation to a familiar/unfamiliar direct supplier? How is an ad hoc analysis carried out?
Our solution
With PwC’s cloud-based “Check Your Value Chain” solution, companies can identify, assess and mitigate the risks in their supply chains. All of the requirements arising from the SCDDA can thus be mapped out as part of a systematic and audit-proof process. Moreover, all the process steps required to fulfil the due diligence requirements are carried out for the entire business partner portfolio. No pre-selection of suppliers takes place as is the case with other solutions, such as those based on media analyses or voluntary disclosures by suppliers.
The solution continuously analyses a large number of data sources regarding the respective business partners. This includes macro-economic indicators, the analysis of information from media in multiple languages as well as the consideration of relevant certifications, benchmarks / ratings and indices.
A detailed supplier risk analysis identifies the riskiest business partners, which can be dealt with in the next step by applying the appropriate measures. These individual risk reduction proposals result in time and cost savings for users.
You enjoy complete transparency regarding the entire process at all times due to the continuous monitoring of all business partners and the ongoing documentation of each step of your supply chain due diligence processes. The audit-proof reports can be exported at any time for transmission or publication and will assist you in meeting the official requirements.
Overview of services
- Reporting standards and updates
- Complete transparency with an end-to-end process
- Open SAP-based ecosystem
- Quick connection and easy maintenance
- Holistic ESG approach
Reporting standards and updates
Comprehensive reporting ensures that all SCDDA reporting requirements as well as the requirements of the Federal Office for Economic Affairs and Export Control (Bundesamt für Wirtschaft und Ausfuhrkontrolle – BAFA) are met. Predefined reports are complemented by comprehensive analyses of business partners and the content here can be used for internal documentation and annual reporting. If amendments to the law are made, following the EU Directive for example, the software will be updated in order to meet such future legal requirements. Users will consequently always remain up to date.
Complete transparency with an end-to-end process
Our risk-based approach is unique within the market and facilitates the analysis of all suppliers involved in value creation as well as one’s own business activities and customers. The risk-level-based analysis of all business partners is assisted by market-tested and validated assessment methods as well as an extensive range of relevant external data. This systematic end-to-end process not only guarantees compliance with all due diligence requirements, but also reduces complexity and brings about complete transparency regarding every individual procedural step of the risk assessment.
Open SAP-based ecosystem
Integration into the innovative Dataland ESG data marketplace enables access to a large range of company data. In addition, it is possible to incorporate information from further external sources such as Sedex, Maplecroft, Dow Jones and various sanctions and certificate databases.
Quick connection and easy maintenance
The modern application platform can be seamlessly integrated into any system landscape because it is easy to connect it to the relevant company systems. The software-as-a-service solution can rapidly be implemented throughout the entire company. The maintenance of interfaces with commonplace SAP systems is equally straightforward.
Holistic ESG approach
Our “Check Your Value Chain” solution forms part of the holistic ESG Management Suite from PwC Germany. It brings together various ESG applications, including in the areas of the EU Taxonomy, risk management and climate change. Furthermore, our highly scalable solution can be expanded to cover international regulations (such as the UK Modern Slavery Act). PwC thus provides an overarching solution for ESG requirements. Users therefore gain more than just access to a solution, they can benefit from the synergy effects from an entire range of tools.
Check Your Value Chain – Data Package Risk Analysis
Do you want an immediate and cost-effective initial assessment of your high risk business partners or would you like to find out quickly and easily how compliance with the due diligence requirements of the SCDDA can be ensured for your company and your entire supply chain? Try our new service and have a report of the individual risk analysis sent to you within the shortest possible time for a comprehensive overview of the high-risk business partners, as well as all other business partners in your portfolio. Curious? Find more advantages and all details in our flyer.
“I am convinced that the SCDDA presents a major opportunity both for us as a society and for individual companies as well. With our software, we assist companies in implementing the statutory requirements with minimal effort and ensuring transparency in their processes.”
The added value for you
“Check Your Value Chain” is a legally secure, adaptable and audit-proof solution. With the software, you can automatically identify, analyse and prioritise concerns relating to human rights and environmental offences and define and track the related measures.
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