The 500 examined companies are all assumed by the Consumer Authority to be encompassed by the Transparency Act based on publicly available accounting information. They were chosen randomly, regardless of size and business sector.
Of the 500 companies examined, around 100 have reportedly violated the requirement that the annual report is to be published on the company's website. The Consumer Authority have issued letters to each of these companies, where they also remind the recipients that non-compliance may be met with financial sanctions.
As to the 400 remaining companies, the Consumer Authority notes that the reports vary in quality, and highlight the following:
- Companies do only to a small extent report on adverse impacts uncovered. Over a third of the examined companies have either not reported anything on adverse impacts or simply stated that they have not uncovered adverse impacts;
- Companies do only to small extent report on initiated or planned measures, i.e. measures to prevent, mitigate or remedy adverse impacts. Around a third of the examined companies do not mention such measures at all;
- Some companies have published a text regarding the Transparency Act, but it is not clear whether the text is meant as an annual report as it is undated, unsigned and does not state what period it refers to;
- Many of the examined companies are part of a group. It is often unclear which of the companies the reports are meant to cover, and the reports are also not very specific when it comes to risk associated with the different business areas within the group;
- Many enterprises appear to have solved the due diligence work by distributing forms, code of conducts or similar, without following-up on the work with specific risk assessments and measures to address the risk.
The findings are generally in line with what we in Schjødt's Corporate Compliance team have noted from our experience when working with matters involving the Transparency Act. We have also noted several cases where companies limit their risk assessments to tier 1 suppliers, despite of the Act requiring companies to consider the supply chain as a whole (including sub-suppliers of any tier).