The deadline for reporting under the Transparency Act is fast approaching. 30. June 2024, all businesses covered by the Transparency Act must publish the report. Here are the rules you must remember!

What is a report under the Transparency Act?

All businesses that are covered by the Transparency Act must publish an account of their due diligence assessments, every year and no later than 30 June. Communication is a key part of the the due diligence processof due diligence, where companies must communicate how they address negative impacts on fundamental human rights and decent work.. The report is an extension of the Openness Act, which is intended to ensure that the public has insight into the findings you have made and what measures have been taken.

The deadline for reporting under the Transparency Act – 30 June 2024

However, there are several requirements for what the report must contain as a minimum and how this should be set up.

Minimum requirements in the report

Now that the deadline for reporting under the Transparency Act is approaching, there are several points that must be included in the report. As this is the companies’ way of presenting the results of the due diligence assessments, the reporting obligation is based on the guidelines from the OECD. This means that there are some minimum requirements that must be followed. In the Transparency Act § 5 letters a, b and c, the requirements that are required appear.

Find out more about the requirements of the Transparency Act here.

As long as the minimum requirement in the reports is met, the companies are free to design the reports at their discretion. However, it will always be advantageous to describe more than the minimum requirement covers.

What about foreign businesses?

The Norwegian Transparency Act requires over 9,000 Norwegian companies to monitor human rights in their own operations and supply chain. Foreign businesses can also be covered. Read more about the Transparency Act for foreign businesses here.

1. General description of the business

The requirement for an explanation under the Transparency Act is that the business itself must provide a general description of the business’s organisation, operating areas, guidelines and routines to deal with negative consequences for basic human rights and decent working conditions.

The general description of the business is linked to step 1 in the due diligence assessments, where the board must anchor accountability in the guidelines.

2. Negative consequences discovered in due diligence assessments

In the due diligence assessments, activities were carried out to uncover negative consequences and risks of violations of basic human rights and decent working conditions. The findings from this will now be included in the report.

The Transparency Act does not require the company to disclose all suppliers with minimal risk and where no cases have been uncovered. We still recommend presenting the number that has been checked, e.g. 11 suppliers with low risk, 4 with medium risk and 2 with high risk. Furthermore, the business must present the findings to suppliers with medium and high risk. Note that all findings at suppliers with actual negative consequences on basic human rights and decent working conditions must be presented here.

In the report, it is relevant to write about negative impacts on human rights and working conditions that you have found both inside and outside your own business. It should also be stated whether the negative consequences are directly or indirectly affected by the company’s activities.

You should include as much information as possible about the findings you have made to give the public an insight into your risk assessments and which areas you have focused on. The question of how much information

The requirements in the report:

Findings of actual negative consequences
Substantial risk of negative consequences
How the risk areas are prioritized (not a requirement, but recommended)¹)
The criteria for prioritization (not a requirement, but recommended)

Personal information and trade secrets

In accordance with the Transparency Act section 5, second paragraph, it appears that personal information and information such as competitive practices or information may be excluded from the report. The same applies to information that is classified under the Security Act or protected by the Copyright Act.

The name of the supplier can therefore be kept out of the report and the information requirement if it is not considered central.

3. Implemented measures and results

Together with the negative consequences, the business must present which measures have been implemented and the results of these. Here, it must be stated which measures have been implemented or are planned. It should also be stated whether these are preventive, limiting or halting measures.

When you write about results, it must be stated how the measures have contributed to, or are expected to contribute to, reducing risk or correcting the actual negative consequences that have been uncovered.

Note that measures can also be preventive measures, before any findings are discovered. Examples of this are good purchasing practices, codes of conducts and the like.

Information requirements

Another central theme in the Transparency Act is the information requirement. It requires businesses to answer consumers’ questions about actual and potential negative consequences on human rights at their suppliers. Anyone who wants more information about a company’s handling of the legislation can make written contact with companies covered by the legislation to request information. This can be done by e-mail, physical letter or through forms that the business has on its website.

The businesses must therefore respond in writing to the information requirement within a reasonable time and within 3 weeks at the latest.

Companies must follow several requirements to meet the information requirement, this applies to both general information and information about human rights and decent working conditions related to a product or service. Read more about information requirements here.

The way forward

The statement must be published on the company’s website as a signed document. Businesses that therefore publish the report as plain text, or without a document with a signature, do not comply with the requirements of the Transparency Act.

If the business has an obligation to prepare a report on social responsibility according to §3-3 c of the Accounting Act, or publishes an annual general sustainability report, the report according to the Transparency Act can be included in this.

The report must be published on the company’s website and be easy to find for the general public “at all times”.

What about businesses that don’t have a website? The statement must then be published in another publicly accessible place, and as far as possible made searchable on the internet.

After publication of the report, there is still time to continue due diligence assessments until the next reporting deadline, or if the risk profile has changed. We also draw attention to the fact that the due diligence assessments must be a further development of the previous due diligence assessment, so that the businesses constantly survey more of the terrain with their suppliers and their own operations. We also recommend following the recommendations on the Swedish Consumer Agency’s website.

Do parent companies have to report due diligence assessments of subsidiaries?

Yes, if the parent company itself is Norwegian and covered by the Transparency Act. This also applies if the subsidiary is foreign and has no obligations under the Transparency Act (1). If the subsidiary itself has published the report on its website, the parent company can refer to the subsidiary’s report.

Which period must be accounted for?

The Openness Act follows the Accounts Act’s system for annual reports and businesses must therefore report on the due diligence assessments of the last closing financial year before 30 June each year. This applies regardless of whether the accounting year is deviating or not.

It should appear in the statement for which period the statement applies.

Can you refer to someone else’s account?

Yes, businesses are free to refer to other people’s accounts. However, it is always the business itself that is responsible for its own report, and will therefore be able to receive sanctions if the report is not comprehensive enough.

Should the report be included in the annual report?

The report must be included in the annual report, where it must be stated where the report is made available on the company’s website.