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Transparency Act

The Norwegian Transparency Act requires Novelda to carry out a due diligence assessment for basic human rights and decent working conditions, in line with the OECD’s guidelines for multinational companies.

Novelda carries out a continuous due diligence assessment for responsible business conduct in line with OECD guidance for multinational companies. The assessment is carried out for the group as a whole.

The assessment is carried out to identify, prevent, mitigate and account for how actual and potential adverse risks impacts operations, supply chain and other business relationships. The business relationships covered include all types of business relationships of the enterprise – suppliers, investors, clients, contractors, customers, consultants, financial, legal and other advisers, and any other non-State or State entities linked to its business operations, products or services.

The due diligence assessment addresses actual impacts or potential impacts and risks related to human rights, employment and industrial relations, environment, bribery and corruption, consumer interest and disclosure. The likelihood of adverse impacts increases in situations where Novelda’s behaviour or the circumstances associated with the supply chains or business relationships are not consistent with the recommendations in the OECD Guidelines for MNEs. A risk of adverse impacts may exist when there is the potential for behaviour that is inconsistent with the recommendations in the OECD Guidelines for MNEs because it involves impacts that may occur in the future.

The Guidelines refer to the likelihood of adverse impacts on people, the environment and society that enterprises cause, contribute to, or to which they are directly linked. In other words, it is an outward-facing approach to risk.

The concept of due diligence under the OECD Guidelines for MNEs involves a bundle of interrelated processes to identify adverse impacts, prevent and mitigate them, track implementation and results and communicate on how adverse impacts are addressed with respect to the enterprises’ own operations, their supply chains and other business relationships. Due diligence should be an integral part of enterprise decision-making and risk management. In this respect it can build off (although it is broader than) traditional transactional or “know your counterparty” (KYC) due diligence processes. Embedding responsible business conduct into policies and management systems helps enterprises prevent adverse impacts on RBC issues and also supports effective due diligence by clarifying an enterprise’s strategy, building staff capacity, ensuring availability of resources, and communicating a clear tone from the top.

Novelda identifies and assesses actual and potential adverse impacts associated with Novelda’s operations, products and services by:

  • Gathering relevant information needed for the due diligence assessment
  • Identifying potential risks

  • Reviewing potential risks and prioritizing the risks by assessing likelihood and severity

  • Updating the risk assessment on a regular basis

In order to cease, prevent and mitigate potential adverse impacts, Novelda:

  • Designs an action plan to reduce the risks identified
  • Reviews and updates the action plan on a continuous basis

The following significant risks of negative consequences have been identified as part of Novelda’s due diligence process including actions to reduce the risks:

Risk Area
Actions to reduce risks
Social / governance
Suppliers or sub-suppliers are sourcing minerals from conflict areas where child labor, forced labor or risks that miners are financing armed conflicts are present.
Novelda will request conflict mineral reports from suppliers. Novelda must review these reports thoroughly and request corrective actions if needed. Questions about conflict mineral reporting procedure are added to supplier audit and supplier questionnaires. Conflict mineral requirements in supplier contracts are added.
Social / governance
Suppliers or sub-suppliers do not treat their employees according to ILO Conventions and local law. This includes: child labor, forced labor, information not in a language the employee does not understand (pay slip, contract, emergency training, work instructions), workhours , vacation, salary and discrimination.
Questions regarding employee code of conduct to suppliers are added during supplier audits and in supplier questionnaires. Topics to supplier contracts are added, such as requirements to be compliant to Novelda supplier code of conduct. Novelda performs corporate social responsibility audits on suppliers.
Transportation of Novelda products increases global warming.
Novelda considers alternative transportation routes where possible to limit co2 emissions. Novelda will have dialogues with transportation companies to find the optimal transportation method and/or fuel to minimize co2 emission.
Production at supplier or sub-supplier results in global warming due to energy used at supplier is not from renewable energy source (not renewable energy sources: coal, oil, gas)
Novelda could add the energy source used to supplier audit, supplier questionnaire and/or in contracts with suppliers.
Environment, social, governance
Novelda’s products contain hazardous materials, breach directives (RoHS and REACH) and/ or customer requirements which could lead to hazardous situations for end-user and for environment at disposal of product. Goods do not meet all agreed or legally required standards for consumer health and safety, including those pertaining to health warnings and safety information.
Requirement specification review at Novelda before sending spec to supplier. Written confirmation from supplier to verify that the supplier has understood the requirements and will deliver the product according to requirements.

In addition to the specific action points on the most significant risks identified mentioned above, Novelda has embedded responsible business conduct into policies and management systems. The code of conduct is reviewed and updated periodically. The policies are publicly available within the enterprise and communicated to all employees as part of the onboarding process.