7 Lessons in Supply Chain Due Diligence and Resilience

“Companies need to understand regulations to stay ahead. For example, the CSDDD is being rolled out as part of a broader EU strategy to harmonize national laws,” Raoul explains. “While national acts already exist in different EU countries, each with its specifics, the EU directive helps align approaches across member states.”

Raoul highlights that Kiwa has always been ahead of the curve in serving clients: “For example, before the German supply chain act came into force, there was a voluntary period when companies were expected to report. That’s when we developed a certification scheme to give them a way to prove their sustainable supply chain management.”

“Another way we’re enhancing our efficiency and effectiveness while avoiding duplicated efforts for our clients is through the new Kiwa supplier software platform. This platform enables our customers, their suppliers, and our auditors to collaborate within a digital system, facilitating the sharing of ESG audit reports and data with the appropriate stakeholders. For instance, if one company requests an ESG audit of a supplier in China, and then another company asks for the same audit just two weeks later, we encounter the same results but at double the cost for both the buyer and the supplier,” Raoul explains.

“At Kiwa, we’ve trained local experts to conduct audits; they know the local laws, culture, and language,” Raoul says. “That’s a big advantage. We even have teams on the ground all over the world, and currently, the demand is especially high in Latin America, South Asia, and China. Some clients request hybrid audits that combine local and European auditors for balanced, cross-border insights. By partnering globally and understanding local contexts, we deliver stronger, more tailored results.”

Raoul cautions that what works in one sector may not translate directly to another. “In the organic food sector, the sustainable supply chain management works differently than in the solar sector. The organic food sector works directly with farmers who face different challenges than, for example, the mining sector of the solar industry. Building a sustainable supply chain due diligence system, in general, can span multiple sectors, but it is essential to consider the specific requirements of each sector. For example, in the construction sector, verification of Environmental Product Declarations is feasible, but it is inefficient. Take limited sampling, the practice of inspecting or testing only a small subset of a larger group, such as materials, products, or suppliers, instead of conducting a comprehensive review of the entire batch or supply chain. You can’t just apply that to an industry like solar energy. It’s a completely different scale. That’s where we support capital-intensive sectors and build on proven ideas from other industries while specifically tailoring them to suit distinct market dynamics, regulatory expectations, and operational scale,” explains Raoul.

“We already use AI to monitor public ESG data and news about suppliers; it helps us flag issues early,” Raoul says. “We use large language models to scan reports or the internet to see if a company has been linked to forced labor or child labor. But AI isn’t foolproof, so we always follow up with expert analysis. Our people remain central to the process.”

Raoul outlines a phased approach to due diligence: “Companies should start with transparency. Then build traceability. Then assess the risks. Smaller companies may not achieve full transparency immediately. They can begin with regional or material-based assessments. If you still face a high risk and lack information, the regulations encourage working on improvement.”