The IFS ESG Compliance Check assesses your company’s sustainability management system. It comprises a thorough review of your sustainability policy and supply chain management, management commitment, and overall framework, including risk identification and mitigation.  

In this blog, our colleague, Margot Laina, takes a closer look at one specific requirement of the check: Requirement 2.5. She shares practical tips for implementing it in a way that strengthens your company’s risk management. 

Four tips for establishing an effective notification mechanism and complaint management system

Requirement 2.5 of the IFS ESG Compliance Check states that senior management must ensure that a notification mechanism and a complaint management system are in place for the company’s own business area and the supply chain. This mechanism must enable all stakeholders to report human rights and environmental risks as well as adverse impacts.

At first, this may sound like a complex compliance topic. However, the good news is that you do not need a highly complex system to make a strong start. What matters most is that people know about the mechanism, can access it easily, feel safe using it and that your company follows up on the information received.

1. Make it clear and accessible

Start with a channel that is easy to find and simple to use.

The reporting channel should be practical and user-friendly. This could be a dedicated email address, an online form, or a physical complaint box. Your employees, suppliers and stakeholders should know where to report their concerns and how the process works. To achieve this, you can: 

•  use simple, accessible language to communicate this mechanism effectively 
• display information prominently on posters in production areas
• include the mechanism in employee onboarding documents
• make it visible on purchase orders, invoices, and your website 

Taking these measures also helps you answer one of the pre-assessment questions for the ESG Compliance Check: whether the notification mechanism is clear, accessible, and effectively communicated to all stakeholders. 

2. Make people feel safe

People are more likely to speak up if they feel protected.

Trust is one of the most important elements of an effective complaint mechanism. To make people feel safe when reporting an issue, you need to ensure reports can be submitted confidentially and, where possible, anonymously. This can be achieved through anonymous web forms, complaint boxes or external reporting tools.

It is also important to communicate that the reporter's identity will be protected. If people fear negative consequences, they may stay silent, even when they are aware of serious risks. This would be a missed opportunity that counteracts the mechanism's intention. 

3. Define who is responsible

A complaint mechanism only works if someone is responsible for it.

As part of the process, you must define who reviews incoming reports, who decides next steps and who follows up on actions. 

This does not necessarily require a large compliance department. In smaller companies, this responsibility can be assigned to a member of management, the sustainability team leader or another qualified person.

To be successful, you should ensure a fair, transparent and consistent process. Every report should be taken seriously, checked carefully and handled within a defined timeframe.

4. Document what happens

Good documentation makes your complaint process visible and verifiable.

To make the process transparent and verifiable, you should keep a record of the reports received, including when they were reviewed, the decision made, and the action taken. This does not need to be complicated. A well-maintained basic Excel register or written log can already be sufficient for this purpose.

Good documentation is important not only for the ESG Compliance Check. More importantly, it helps your company identify patterns over time, prevent similar issues from recurring and contribute to more efficient processes. 

Reaching an A-scoring in the ESG Compliance Check

To achieve an “A” score, the mechanism must be documented and proven to function effectively in practice.

In the IFS ESG Compliance Check scoring system, an “A” indicates intention and full implementation. For Requirement 2.5, this means your approach should include:

• clear reporting channels for employees, suppliers and other stakeholders
• confidential and, where possible, anonymous reporting
• clear and easy-to-understand communication towards all stakeholders
• defined responsibilities for reviewing and handling reports
• documented follow-up and corrective actions
• regular review and improvement of the process

Key takeaway for your company

A complaint mechanism is more than a compliance requirement; it is also an early warning system.

The best approach is a straightforward, reliable process: easy to access, clearly communicated, confidential, properly documented, and consistently followed up.

If people know how to report concerns and trust that their concerns will be taken seriously, your company can identify risks earlier, respond faster, and strengthen its ESG management system in a practical way.

Would you like to learn more about the IFS ESG Compliance Check and its requirements? Visit the official IFS ESG Compliance Check webpage for more information.

About the author

Margot Laina is Coordinator of the ESG Programme and Senior Technical Manager at IFS. She has been with IFS since 2022 and joined the Standard Management department in September 2023, where she focuses on sustainability topics, new legislation and the IFS ESG Compliance Check. For more background, read our blog article on how the IFS ESG Compliance Check empowers businesses in sustainable practices.