The Transparency Act

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The Transparency Act requires Norwegian companies to carry out due diligence assessments to ensure respect for fundamental human rights and decent working conditions. This applies both within their own operations and throughout the entire supply chain. Is your company in control of its due diligence efforts?

Aider supports Norwegian businesses in complying with the requirements of the Transparency Act – from mapping and risk assessments to the preparation of final reports. We ensure that the process is thorough, efficient, and aligned with the OECD Guidelines.

Who is subject to the Transparency Act?

All companies that meet at least two of the following three criteria are subject to the Transparency Act:

A minimum of 50 full-time equivalent employees
Annual revenue of NOK 70 million or more
A balance sheet total of NOK 35 million or more

In addition, public interest entities as defined in Section 1-6 of the Norwegian Accounting Act are also covered, including listed companies as well as banks, credit institutions, and insurance companies, regardless of size.

A company must exceed the threshold values for two consecutive years to be subject to the Act. Similarly, it must remain below the thresholds for two consecutive years to no longer be covered by the Act.

What do due diligence assessments entail under the Transparency Act?

Due diligence assessments are a systematic process for identifying, preventing, mitigating, and accounting for adverse impacts on fundamental human rights and decent working conditions. The Act is based on the OECD Guidelines for Responsible Business Conduct and the UN Guiding Principles on Business and Human Rights.

A due diligence assessment includes
- Identifying actual and potential negative impacts both within the company’s own operations and across the supply chain. This involves determining where there is a risk of human rights violations or poor working conditions.
- Prioritizing the most severe risks based on the scale, scope, and the difficulty of remediation.
- Taking concrete actions to prevent, stop, or mitigate identified issues. This may include changes to internal procedures, setting requirements for suppliers, or terminating supplier relationships.
- Continuous monitoring of whether the measures are effective, with adjustments to strategy as needed.
- Providing transparent information to affected stakeholders and the public through disclosures published on the company’s website.

Notodden Energi selected Aider’s sustainability team

In 2022, the Notodden Energi Group chose Xledger as its new ERP system and Aider as its implementation partner. This collaboration was further expanded in 2023 when the Group required a partner for payroll, accounting, and controlling services.

How Aider conducts due diligence assessments for your business

Our sustainability team has extensive experience in supporting Norwegian companies throughout the entire due diligence process. We tailor our approach to your company’s size, industry, and level of complexity.

- We begin by ensuring that due diligence efforts are firmly anchored within management and the organization. This includes training key personnel, establishing clear lines of responsibility, and integrating the process into existing governance systems.
- We conduct a thorough assessment of human rights risks within your own operations. This includes working conditions, health and safety, equality, use of temporary labor, and organizational culture. Many companies uncover improvement areas they were previously unaware of.
- The supply chain is where most companies identify the greatest risks. We carry out a systematic assessment based on:
  
  Geography – countries with a high risk of human rights violations
  
  Industry – sectors with known risks (textiles, electronics, agriculture, construction)
  
  Product category – goods and services with complex supply chains
  
  We use recognized risk indices, industry reports, and databases to identify high-risk suppliers. These are prioritized for closer follow-up through questionnaires and direct dialog
- For suppliers with identified risks, we develop concrete action plans. This may include:
  
  Direct dialogue with the supplier
  
  Requirements for certifications or third-party audits
  
  Supplier visits and discussions on improvement measures
  
  Contractual requirements for responsible business conduct
  
  Action plans with deadlines and follow-up checkpoints.
  
  We also assist in documenting the entire process, enabling you to demonstrate compliance in the event of inquiries from the Norwegian Consumer Authority.
- The results of the due diligence work must be documented in a public statement published on the company’s website by 30 June each year. Aider prepares a complete draft statement that meets the legal requirements for content and structure.
  
  The statement must include:
  
  A description of the company’s structure, operations, and policies
  
  Identified actual and potential adverse impacts
  
  Measures implemented or planned
  
  Results of the measures undertaken

Why systematic due diligence efforts pay off

Many companies initially perceive due diligence assessments as a burden. However, experience shows that thorough work in line with the Transparency Act delivers clear and tangible benefits.

Systematic due diligence provides improved control over the supply chain, offering greater visibility into who you are doing business with and the risks involved. This reduces the likelihood of operational disruptions, reputational damage, and legal issues.

It also strengthens trust among customers and investors. An increasing number of stakeholders expect responsible business conduct, and a well-prepared Transparency Act statement demonstrates that your company takes corporate responsibility seriously.

In addition, it can improve access to capital. Investors with ESG requirements tend to prioritize companies that have control over sustainability risks, and solid documentation of due diligence efforts may positively influence financing terms.

The work carried out under the Transparency Act also establishes a strong foundation for further sustainability reporting, including CSRD, as well as any future implementation of the EU Corporate Sustainability Due Diligence Directive into Norwegian law.

Finally, systematic dialogue on responsible business practices can enhance supplier relationships, strengthening collaboration with partners who share your values.

Duty to provide information – responding to inquiries

In addition to the annual statement, companies are required to respond to inquiries from the public regarding how they address actual and potential adverse impacts. Responses must be provided no later than three weeks after the inquiry is received, and the information must be retained for a minimum of ten years.

Aider assists you in establishing robust procedures for handling such inquiries, including response templates and documentation systems.

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Consequences of non-compliance

The Norwegian Consumer Authority supervises compliance with the Transparency Act and may issue orders to remedy any breaches. Failure to comply may result in coercive fines. Companies also risk:

Reputational damage and loss of customers
Negative media attention
Loss of business contracts with clients that impose ESG requirements
Reduced access to capital

More important than the sanctions, however, is the real risk of human rights violations within the value chain. Systematic due diligence is ultimately about preventing your business from contributing to the exploitation of people.

Why choose Aider for due diligence assessments?

Aider combines broad expertise in sustainability with practical business understanding. We know that due diligence must be thorough enough to meet regulatory requirements, while also being efficient enough to integrate seamlessly into your day-to-day operations.

Our team has experience across a wide range of industries and understands the specific challenges different sectors face. We use digital tools that simplify the process and provide clear oversight, while also offering dedicated advisory support from experienced consultants.

We stay up to date with regulatory developments and best practices, ensuring that the work you do today is future-proof.

Take control of your due diligence efforts. Contact our sustainability advisors for a no-obligation consultation.

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Future requirements: CSDDD and regulatory harmonization

The EU Corporate Sustainability Due Diligence Directive (CSDDD) was adopted in May 2024 and has been designated as EEA-relevant, meaning it will be implemented in Norway. The directive significantly expands due diligence requirements by including environmental impacts and climate risk in addition to human rights and working conditions.

However, in February 2025, the European Commission proposed substantial simplifications to the CSDDD through the so-called Omnibus package. The proposal is currently under consideration by the European Parliament and the Council. Among the proposed changes are:

Extension of the interval between due diligence assessments from one to five years
Exemption from the obligation to conduct in-depth assessments of indirect business partners in complex value chains, unless there is concrete information about adverse impacts
Limitations on information requests from smaller suppliers

The Norwegian Ministry of Children and Families has conducted an evaluation of the Transparency Act and is awaiting the final adopted CSDDD text before proposing any amendments. The Ministry will assess the harmonization of requirements and terminology to avoid duplicate reporting and ensure that Norwegian companies are not placed at a disproportionate competitive disadvantage.

Regardless of how the CSDDD evolves, having robust due diligence systems in place now will be a clear advantage. This will better prepare your business for future regulatory requirements.

FAQ – Frequently asked questions about due diligence assessments under the Transparency Act

- Yes, foreign companies that offer goods or services in Norway and meet the threshold criteria are subject to the Act.
- The CSRD (Corporate Sustainability Reporting Directive) sets broader requirements for sustainability reporting. Many companies are subject to both the Transparency Act and CSRD. Due diligence efforts under the Transparency Act can be integrated with CSRD reporting to avoid duplication of work.
- There is uncertainty regarding the future design of the Transparency Act in light of CSDDD. The Ministry of Children and Families will assess potential harmonization and legislative changes once the final CSDDD text is adopted in the EU. Regardless, Norwegian companies should prepare for stricter due diligence requirements.
- Start by mapping first- and second-tier suppliers. Use risk assessments to prioritize where to focus deeper analysis within the value chain. Aider can support with tools and methodologies for systematic mapping of complex supply chains.
- Yes, companies must establish policies describing how they manage actual and potential adverse impacts. These policies should be anchored in management and well communicated throughout the organization.

We are ready to help!

Camilla H. H. Gulsett

Senior Manager • ESG Manager • Oslo

camilla.gulsett@aider.no

+47 97 71 91 21

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Sjur Langedal

Director • Oslo

sjur.langedal@aider.no

+47 97 74 69 59

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