New law on Supply Chain Transparency adopted in Parliament

Over the past years, we have seen fundamental changes in how climate and environmental risks and opportunities are taken into account by the financial sector. The changes are supported by the European Green Deal as well as the EU’s international commitments on climate and sustainability objectives. This development largely relates to the environmental pillar of ESG.

Norway is now demonstrating leadership on the social pillar of ESG by adopting the Supply Chain Transparency Act (Åpenhetsloven)[1]. DNB Asset Management welcomes the law, which enforces our already existing expectations towards companies to understand their responsibility and risks regarding the social consequences of their business operations.

The purpose of the Act is to strengthen respect for fundamental human rights and decent working conditions in connection with the production of goods and services.

The law shall ensure transparency about supply chains and requires companies to carry out and account for due diligence assessments. The public is given access to information on how businesses handle negative consequences for fundamental human rights and decent working conditions.

Large Norwegian companies [2] that offer goods and services in Norway and abroad, and large foreign companies that offer goods and services in Norway and are taxable here, are covered by the law.

The Act builds on requirements for responsible business conduct that we already expect from companies in our portfolio, such as the UN Guiding Principles on Business and Human Rights (UNGPs) and the OECD Guidelines for Multinational Enterprises.