This is not due diligence advice and we recommend you seek experts in the area. Remember you are always responsible for your own procedures and due diligence
What due diligence is in practice?
Due diligence fundamentally means:
That the company actively investigates, assesses, and relates to risks and impacts in its business and value chain and can document that it does so on an ongoing basis.
So it is not a document, and it is not a one-time exercise. It is a process and a way of working.
It is about being able to answer three questions:
What can go wrong? (risks for people, environment, compliance, reputation, etc.)
Where are we most vulnerable?
What do we do about it and how do we follow up?
What due diligence is not
Misconception | What it actually is |
“It’s just a compliance checklist” | It is an ongoing risk assessment and prioritization |
“It’s something lawyers do” | It is business, procurement, management, and operations |
“It only concerns our own activities” | It primarily concerns the value chain |
“We just need to document that everything is fine” | We need to show that we have overview and act responsibly |
Due diligence is not about being perfect — but about being conscious, systematic, and transparent.
What due diligence typically consists of
See this guide for a more hands-on approach to conducting due diligence based on the 6 steps.
Video walkthrough within the system:
In practice, due diligence can be divided into five main elements:
1. Overview
Who are your suppliers, partners, and value chain levels?
Where do you have missing data?
In prduct we recommend you:
2. Risk Assessment
Which risks exist for:
People (working conditions, rights)
Environment (deforestation, CO₂, pollution)
Compliance (law violations, sanctions)
Business (dependency, vulnerability)
In prduct we recommend you:
3. Prioritization
Not all risks are equally important. Focus where:
The consequence is greatest
The likelihood is highest
The company has the largest impact
In prduct we recommend you:
4. Action
What do you actually do to reduce or manage the risks?
In prduct we recommend you:
Visit the supplier
5. Follow-up and Documentation
How do you ensure that assessments remain up to date, and that you can document your work?
In prduct we recommend you:
Use the system so information and actions are logged and can be presented in case of an audit.
A concrete example
A company discovers that an important raw material comes from an area with a high risk of deforestation. Due diligence does not necessarily mean, “We stop the cooperation tomorrow.” It means:
We identify the risk
We talk to the supplier
We ask for documentation
We assess alternatives
We decide how we handle the risk and document it
Due diligence is not an end in itself — it is a tool to manage responsibility, risk, and business better. It is not about “passing a check”, but about being able to explain:
What you know
What you do
And why you do it
That is what authorities, customers, and partners are actually asking for.