Procurement Glossary
Child labor risk assessment: Systematic analysis and prevention in the supply chain
November 19, 2025
The child labor risk assessment is a systematic process for identifying and assessing child labor risks in global supply chains. This assessment enables companies to identify potential violations of children's rights at an early stage and take preventive measures. Find out below what a child labor risk assessment involves, which methods are used and how companies can use it to meet their due diligence obligations.
Key Facts
- Systematic analysis of child labor risks along the entire value chain
- Takes into account geographical, industry-specific and supplier-based risk factors
- Meets the legal requirements of the Supply Chain Duty of Care Act
- Includes both risk identification and evaluation of the effectiveness of preventive measures
- Integrates into existing due diligence processes
Contents
Definition: Child labor risk assessment
Child labor risk assessment is a structured approach to systematically identify, analyze and assess risks related to child labor in supply chains and business relationships.
Core elements of the valuation
A comprehensive child labor risk assessment is based on several dimensions of analysis:
- Geographical risk analysis by country and region
- Sector-specific risk assessment
- Supplier evaluation and audit results
- Product-specific risk analysis
Child labor risk assessment vs. general ESG assessment
In contrast to general ESG risk ratings, the child labor risk assessment focuses specifically on children's rights and labor law aspects. It complements comprehensive corporate sustainability due diligence processes with a specialized component.
Importance in strategic Procurement
The assessment supports purchasing organizations in fulfilling their due diligence obligations and helps to minimize risk in the supplier base. It enables well-founded decision-making in supplier selection and development.
Methods and procedure for child labor risk assessments
The systematic implementation of a child labor risk assessment is carried out using structured methods and established assessment frameworks.
Risk identification and mapping
The first step involves the complete mapping of the supply chain and the identification of potential risk areas. This involves systematically recording geographical hotspots, high-risk sectors and critical supplier levels.
- Supply chain mapping down to raw material level
- Use of country risk indices
- Sector-specific risk analysis
Evaluation methodology and scoring
The quantitative assessment is carried out using standardized scoring models that weight various risk factors. Supplier codes of conduct form the normative basis for the assessment criteria.
Monitoring and validation
Continuous monitoring through regular audits, supplier surveys and external validation ensure that the assessment is up to date. Whistleblower systems supplement systematic monitoring with event-based reports.
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Important KPIs for child labor risk assessments
The effectiveness of child labor risk assessments is measured using specific indicators that reflect both process quality and results.
Coverage and completeness indicators
These metrics measure the scope of the assessments carried out in relation to the entire supplier base:
- Share of evaluated suppliers by purchasing volume (%)
- Coverage of critical countries and sectors (%)
- Completeness of supply chain transparency up to Tier 3
Risk and quality indicators
Qualitative key figures evaluate the quality of risk identification and assessment. Integration into annual meetings with suppliers strengthens continuous improvement.
Effectiveness and improvement metrics
These KPIs measure the success of implemented measures and the continuous improvement of the assessment processes. Regular evaluations support the strategic development of the supplier ESG improvement plans.
Risks, dependencies and countermeasures
When implementing child labor risk assessments, various operational and strategic risks arise that must be addressed proactively.
Data quality and availability
Incomplete or outdated data can lead to incorrect risk assessments. Data procurement is particularly challenging in complex, multi-level supply chains.
- Implementation of redundant data sources
- Regular validation through on-site audits
- Building trusting supplier relationships
Resource-intensive implementation
Systematic evaluation requires considerable human and financial resources. Smaller companies face particular challenges when implementing comprehensive evaluation systems.
Legal and reputational risks
Inadequate assessments can lead to violations of the Supply Chain Due Diligence Act. At the same time, child labor risks that become publicly known can cause considerable reputational damage. Preventive KYC processes in Procurement minimize these risks.
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Practical example
An international textile retailer implements a systematic child labor risk assessment for its supplier base in South Asia. The company first maps all direct and indirect suppliers up to cotton production. Risk scores are then calculated based on country indices, industry data and audit results. High-risk suppliers undergo enhanced checks and receive targeted support to minimize risk.
- Complete supply chain mapping within 18 months
- Risk assessment of 450 direct suppliers
- Implementation of 23 improvement plans for high-risk partners
Current developments and effects
Child labor risk assessment is constantly evolving, driven by regulatory requirements and technological innovations.
Regulatory tightening
New laws such as the Corporate Sustainability Due Diligence Directive increase the requirements for due diligence obligations. Companies must adapt and document their assessment processes accordingly.
Digitalization and AI integration
Artificial intelligence is revolutionizing risk analysis through automated data evaluation and pattern recognition. AI-based systems can analyze large amounts of data from various sources and identify risk indicators in real time.
- Automated media analysis for risk signals
- Predictive analytics for risk forecasts
- Satellite image analysis for production sites
Cross-industry cooperation
Increasing cooperation between companies, NGOs and governments is leading to standardized evaluation approaches. Procurement procurement is becoming a strategic differentiating factor.
Conclusion
The child labor risk assessment is an indispensable tool for responsible supply chain management. It enables companies to systematically identify and prevent child labor risks in global supply chains. By integrating it into existing due diligence processes, organizations not only meet legal requirements, but also create sustainable value for all stakeholders. The continuous development of assessment methods, supported by digital technologies, strengthens the effectiveness of preventive measures.
FAQ
What does a child labor risk assessment actually involve?
A child labor risk assessment systematically analyzes all stages of the supply chain for potential child labor risks. It takes into account geographical factors, industry specifics, supplier assessments and product-specific risks. The result is a structured risk matrix that enables preventive measures to be taken.
How often should child labor risk assessments be conducted?
The assessment frequency depends on the identified risk level. High-risk areas require annual assessments, while standard-risk suppliers can be assessed every two to three years. Event-based reassessments are required in the event of significant changes in the supply chain or external risk signals.
Which data sources are used for the assessment?
The assessment is based on internal data such as supplier audits and self-assessments as well as external sources such as country risk indices, NGO reports and media analyses. Satellite images, trade statistics and industry studies supplement the database for a comprehensive risk analysis.
How are identified risks prioritized and treated?
Prioritization is based on probability of occurrence and potential impact. High-priority risks require immediate measures such as increased audits or supplier training. Medium risks are addressed through preventive programs, while low risks are continuously monitored.
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