Evaluation report on the Transparency Act

The Transparency Act aims to promote companies' respect for fundamental human rights and decent working conditions. In addition, the Act ensures that the general public has access to information about how companies deal with negative consequences in these areas.

The Transparency Act currently applies to large Norwegian companies and requires them to carry out due diligence in accordance with the OECD guidelines, provide an annual public report by 30 June and provide information in response to written requests. The Norwegian Consumer Authority provides guidance and supervises compliance with the Act, and can impose fines and, in the event of repeated violations, penalties.

The background to the evaluation

On 26 June 2025, the Ministry of Children and Family Affairs completed an evaluation report of the Transparency Act. In the preparatory work for the Transparency Act, the Ministry announced that the Act would be evaluated after it has been in force for a period of time. The purpose of the evaluation is, among other things, to assess

• the effect of the law,
• whether smaller businesses should also be included as obligated entities,
• whether the scope of the Act should be extended to include environmental impact and possibly other areas covered by the OECD Guidelines for Multinational Enterprises, and
• whether an obligation should be introduced for companies to publish information about the place of production.

The evaluation is also assessed in the light of the EU's Due Diligence Directive (CSDDD) and other EU regulations on sustainability, including CSRD.

The organisations' experiences and effects

The basis for the report is based, among other things, on reports from KPMG and the consumer research institute SIFO from 2024.

KPMG's surveys show that the Act has given a significant and systematic boost to the business community's work on human rights and labour conditions, with increased anchoring in governance and management, a better overview of supply chains and more responsible purchasing practices. Among other things, the report shows that 13% of those who participated in the survey believe that measures have had an effect in their own business and 28% in the supply chain, with examples such as changed employment conditions, wage measures linked to living wages, HSE measures and strengthened controls. The surveys show that very few companies have not uncovered actual negative consequences. The Ministry considers it positive that several companies responded that the Transparency Act has led to increased awareness and better anchoring of accountability internally in the companies, and that the companies have emphasised the risk-based approach as a particular strength of the current Transparency Act, and that this gives the companies an opportunity to focus their efforts on areas with a high risk of negative consequences.

The surveys show that the obligations are generally perceived as clear and feasible. At the same time, there is a call for more guidance and clarification, including on proportionality, risk prioritisation, what constitutes «good enough» due diligence and how far out in the chain the obligations extend. Based on this input, the Ministry will assess the need for and opportunities for further guidance, as well as look more closely at appropriate clarifications in the Transparency Act to clarify the content of the Act.

Workload

Many companies report an increased workload, particularly in relation to extensive, non-standardised questionnaires sent in supply chains. The questionnaires often cover generic information and the practice has meant that many organisations have found the work burdensome. The Ministry will look more closely at solutions to counteract the unintended consequences of information gathering, and emphasises that it is not in line with the intention of the Transparency Act to send out standardised questionnaires to all suppliers and business partners to map their work on due diligence. The Ministry will take a closer look at solutions to counteract the unintended consequences of information gathering that the evaluation has revealed.

Public procurement

Some companies also experience poor results in tenders and lose out to less serious companies when they are open about risks because measures are priced in, and short-term contracts can make long-term improvement processes difficult. The Ministry believes this may be due to a lack of knowledge and experience among public contracting authorities. To ensure better understanding in public bodies, several of the findings from the evaluation have been followed up in the proposed amendments to the Procurement Act.

Relationship to other reporting requirements and EU harmonisation

Companies express concern about overlap between the Transparency Act, the Accounting Act/CSRD and the forthcoming CSDDD, and call for harmonisation of requirements and terminology to avoid double reporting. Several suggest that companies that already report in accordance with the Accounting Act/CSRD should be granted exemptions from the Transparency Act's reporting obligation, or that the reporting system should be better harmonised. The Ministry will consider various solutions to counteract overlapping and duplicate reporting requirements and look more closely at terminology in the light of EU regulations and updated OECD guidelines.

Competitiveness

The report points to concerns for competitiveness where Norwegian businesses face specialised requirements beyond the EU, particularly in markets without similar regulations. This can complicate co-operation and increase the risk of negative exposure. The ministry will safeguard competitiveness as a key consideration in its further work and has stated that if Norwegian businesses are faced with special Norwegian requirements, this could weaken their competitiveness. The Ministry is keen to safeguard the competitiveness of Norwegian companies in future processes.

The Consumer Authority as a counselling and supervisory body

Views are divided on the Norwegian Consumer Authority's dual role as both a guidance and supervisory body. Some businesses are calling for stronger expertise in complex supply chains and believe the dual role can inhibit open dialogue, while others highlight the Authority's experience from related regulations. The Ministry recognises these concerns and will consider the input further.

Licence holders, media and consumers

Civil society organisations are generally positive and make active use of the law, but call for more use in civil society and a stronger sanctions regime. Several organisations report better quality in companies' responses to information requirements, but also cases of missing answers or derailment of the questions. There is widespread support for a public digital register of disclosures to increase accessibility.

SIFO's surveys show that only 9% of consumers are aware of the Transparency Act, while a large majority want businesses to be obliged to provide information, and many call for more easily accessible information, including via labelling schemes. The Ministry notes that the licence holders under the Transparency Act have different experiences so far, and given that the Transparency Act is a new law, this is, in the Ministry's opinion, a natural finding.

Financial and administrative consequences

The costs appear higher than estimated before the law came into force. KPMG estimates, based on the companies' use of time, that the costs may be about three times as high as in the impact assessment for the Act, with the highest expenses for large companies. The Ministry emphasises the uncertainty of the estimates and that some costs would have been incurred anyway as part of compliance with the OECD Guidelines.

Threshold values, environment and production site

When it comes to threshold values, views are divided. Some want the law to cover more businesses or all industries, while others are concerned about the burden on smaller companies and call for harmonisation with the Accounting Act and EU regulations. The ministry will investigate any changes further and submit them for consultation if necessary.

When it comes to the environment, many companies report that they already carry out environmental due diligence, and civil society expects the environment to be included in the law when it is revised. At the same time, there is a need for a phased introduction, a clear definition of environmental impact similar to the EU, and a considerable need for guidance, especially for smaller businesses. The ministry will assess this and gather further experience before submitting any consultation proposals.

When it comes to disclosing the location of production, civil society organisations are ready for a duty to ensure verifiability, risk profiling and effective stakeholder dialogue. At the same time, organisations highlight safety risks for employees and local communities, the risk of suppliers closing their doors, and ambiguities in defining the place of production. The Ministry recognises the differing views and will assess whether an obligation is appropriate and feasible before any consultation.

Summarising

The Ministry also concludes that an evaluation after two years is too early to be able to determine the real effects, but that the law has been valuable and the findings will be an important knowledge base for further work on any changes to the law and adaptation to international frameworks.

At the same time, there is a need for more guidance, better harmonisation and measures to reduce red tape. The report forms the knowledge base for possible regulatory changes, which will be investigated further and sent out for consultation, while developments in the EU and OECD are closely monitored.

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Tony Støkkebo Bye

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