Simplifying the Norwegian Transparency Act

In an era where transparency and sustainability take center stage, all businesses are encouraged to be more transparent about the impact their operations have on the world around them. The Transparency Act is a reflection of this global shift.

Simplify supplier mapping with our software to ensure compliance with the Transparency Act.

Two people check the working conditions of a factory to follow the Norwegian Transparency Act requirements

What is the Transparency Act?

The law is not just about regulatory control - it's about influence. With a focus on human rights, decent work and social sustainability, it aims to promote ethical practices. The ambition is to ensure that companies act responsibly and empower consumers, investors and society by giving them access to important information about the impact companies have on their supply chains and the global community.

Who is affected?

All companies operating in Norway that meet two of the following three conditions:

- Sales revenue: NOK 70 million.
- Balance sheet total: NOK 35 million.
- Average number of employees in the financial year: 50 FTEs.

Companies that are registered in Norway or abroad, but still offer goods or services in Norway are also covered.

Approximately 9,000 companies will be directly affected by the legislation. However, ripple effects may affect smaller businesses if larger businesses impose special requirements on them in line with the law

What are the requirements of the Transparency Act?

- Vulnerability assessment: Map and assess negative impacts. Examine internal operations, supply chain and business relationships to identify risks related to human rights and labor conditions.
- Stop, prevent or mitigate negative impacts, and of course provide restoration or compensation if required.
- Track and monitor whether the measures implemented are having an effect.
- Communicate and report: After conducting a due diligence assessment, make the report public. Highlight the findings clearly on your company's website, emphasize them in your annual report and remember to update the report when changes occur or when new suppliers are added. The statement should be available on the company's website and updated annually by June 30 and in the event of significant risk changes.

Be open: Whether it's another company, a journalist or a private individual - be prepared for questions and respond to inquiries within the three-week deadline.

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This software helps you map and identify potential human rights, labor and environmental risks with your suppliers.

With the software you get access to:

- A smart guide through the process
- A network of suppliers
- Smart surveys
- Storage of important documentation
- Automated follow-ups and dialog history

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The consequences of non-compliance with the Transparency Act

The consequences extend beyond just legal consequences:

- Potential fines for non-compliance.
- Increased financial claims from financial institutions and possible lawsuits from consumers or other stakeholders.
- Irreparable damage to the brand and trust in the market.

Not publishing a report may lead to increased resource use on external consultants and possible legal assistance.

For reporting companies, the absence of a good routine in line with the Transparency Act can result in a hefty fine: up to 4 percent of annual turnover or NOK 25 million, with a maximum of NOK 25 million.

Moreover, even if measures are in place, not implementing them can lead to critical questions from partners, board members, customers, media and stakeholders.