Request for Proposals- Strategic Partner Due Diligence Roll Out In Israel

Strategic Partner Due Diligence Roll out in
Israel
Application deadline: 19 May 2024

Request for Proposals-
Strategic Partner Due
Diligence Roll Out In Israel

RFP n#: 2024-4-PR-

ISRDUEDILIGENCE

Location: Israel

Start date: 1st June 2024

End date: 21st June 2024

Better Cotton key contact:
Alvaro Moreira
Programmes and Partnership

All applications must be submitted via this form.

You may submit questions to [email protected] -RFP n# 2024-4-PR-ISRDUEDILGENCE
until 15th May 2024.
Questions, requests and applications sent after the deadline of 19th May 2024 will only be
considered in exceptional circumstances.

Description

Better Cotton is the world’s largest cotton sustainability programme. Our mission: to help cotton
communities survive and thrive, while protecting and restoring the environment. In challenging
times, we are meeting the challenge head on. Through our network of field-level partners we
have trained over 2.8 million farmers in 22 countries in more sustainable farming practices. A
quarter of the world’s cotton is now grown under the Better Cotton Standard. We have united
the industry’s stakeholders behind our efforts, and by 2030 our aim is to have trained 5 million
farmers and doubled global production of Better Cotton.

Background

Better Cotton uses a process called ‘benchmarking’ to confer one-way recognition of other
credible cotton sustainability standard systems. Since 2013, this recognition has allowed
farmers who comply with a successfully standard system recognised as equivalent to access
the market for Better Cotton, avoid duplicative certification requirements and contribute to
widen and deepen Better Cotton’s impact.

Request for Proposal – Partner Due Diligence Roll out in Israel – Better Cotton

Strategic Partner Due Diligence Roll out in
Israel
Application deadline: 19 May 2024

The credibility of the recognised standard system therefore relies, in part, on Better Cotton’s
ability to select and work with competent strategic partners to support farmers. The Due
Diligence process aims to reduce partnership risks for Better Cotton and also supports our
partners by implementing a remediation plan to enable them to comply with Better Cotton’s
requirements, strengthen their organisation and ensure a long-term partnership.

What is Due Diligence for Better Cotton
Due Diligence is an on-going, proactive, and reactive process through which our partners can
identify, prevent, mitigate, and account for how they address actual and potential adverse
impacts as an integral part of decision-making and risk management systems.

The purpose of the Due Diligence process is to help Better Cotton to ensure that the partners
we work with, or fund, have adequate governance structures, policies, and operational systems
in place. It can also help organisations ensure they observe both international and domestic law
and build towards the requirements of corporate Due Diligence.

Better Cotton’s due diligence covers 6 areas: ethics, governance, HR, environment and
operations, financial stability and governance, and where applicable - downstream local
partners.

The due diligence is structured around:

• Assessing the organisation and its undertakings to identify the factual circumstances
(reality) under which the business is operating.

• Identifying and assessing any actual or potential risks by evaluating the factual
circumstances against recognised standards.

• Preventing or mitigating the identified risks by adopting and implementing a corrective
risk action plan.

Objective
The objective of the consultancy is to conduct the Due Diligence process in Israel with one (1)
existing strategic partner, the Israel Cotton Board, in accordance with Better Cotton’s guidelines,
by the 30th of June 2024.

Through direct relationships with the partners, the consultant will be responsible for reviewing
and analysing the documents submitted by the strategic partner, and recommending mitigation
actions, if relevant, with the support of Better Cotton’s teams.

Tasks & Methodology

A Better Cotton team member will closely follow and support the consultant in the Due Diligence
management and coordinate the partner relationship. Other team members will also support.
The Better Cotton team will therefore include, but is not limited to:

• Senior Manager, Programmes, based in Brazil
• Senior Programme Coordinator, based in Geneva

• Programme officer, based in Brazil

Request for Proposal – Partner Due Diligence Roll out in Israel – Better Cotton

Strategic Partner Due Diligence Roll out in
Israel
Application deadline: 19 May 2024

Better Cotton will provide all Due Diligence materials to the consultant who will follow the
procedure and guidelines and use the template:

• The Due Diligence Handbook (See Annex 1)
• The Due Diligence questionnaire answered by the partner = 29 questions + sub-

questions + attachments
• The Due Diligence analysis framework

• The template for the Final Report

Better Cotton will have started the data collection stage when the consultant will be appointed.
The consultant will be required to follow these main steps to conduct the Due Diligence:

1. Review answers and analyse submitted documents, provide feedback and

requirements for more detail or accurate answers from the strategic partner and

prepare corrective risk action plan.

2. In coordination with Better Cotton team, validate the partner’s responses and provide

a risk score with the Better Cotton tool.

3. Complete the final Due Diligence report.

4. Present the Due Diligence results and propose a corrective risk action plan during a

final meeting with the partner.

To proceed with these tasks, an estimated timeframe to conduct one Due Diligence is
proposed:

W1 W2 W3 W4 W5 W6 Working days

Document and answer review:

- Feedback to partner

- Coordination with BC Team
1 1 1 2 5

- Document reading

- Validating partner responses

- Fill Better Cotton due diligence tool

Developing the risk action plan + report

writing:

- Assessment and scoring
2 1 3

- Action plan assessment

- Report writting

- Feedback to the partner

Report finetuning + final meeting 2 2

TOTAL: 10

Request for Proposal – Partner Due Diligence Roll out in Israel – Better Cotton

Strategic Partner Due Diligence Roll out in
Israel
Application deadline: 19 May 2024

Due Diligence Deliverables

i. The due diligence analysis framework reviewed and updated on an ongoing basis
ii. The Final Report, including a risk action plan for the partner

High-level Timeline
By May 19th Applications close.

All applications must be submitted via this form.

By May 24th Applications review.

By May 31st Contract signature and start of the assignment

Week 1 Induction call

Week 1 and 2 Review of documentation submitted by Strategic Partner and
requests for clarifications sent

By end of week 4 Submission of completed Better Cotton Due Diligence Tool

Week 5 Development of risk action plan

Week 5 Submission of first report draft

Week 6 Submission of final report

By mid July 2024 Final reporting meeting

Required Skills & Knowledge
Experience

• Demonstrable experience writing, deploying, reviewing, or implementing Due
Diligence frameworks in the development or corporate sector

• Demonstrable experience in analysing financial information

• Experience working with international organisations

• Field level experience in Israel

Skills and competencies

• Strong analytical and communication skills, especially in the following areas: ethics,
governance, HR, environment and operations, financial stability, and governance

• Excellent reporting and presentation skills

• Fluency in spoken and written English and Hebrew

Application Requirements

Interested applicants are asked to send, in English, the following:

• Relevant staff CVs
• A detailed financial offer up to 10 working days and limited to 400 EUR/day
• A list of references
• A short narrative proposal composed of:

o A timeline for delivery
o A concise description of the approach that will be used including your Due

Diligence understanding and approach to partner engagement. (NB. The

Request for Proposal – Partner Due Diligence Roll out in Israel – Better Cotton

Strategic Partner Due Diligence Roll out in
Israel
Application deadline: 19 May 2024

consultant will implement Better Cotton methodology and use Better Cotton
tools.). Two pages maximum.

Please note that field and office visits might be required to cross check the policy review and
support data collection. Proposals will be evaluated based on quality and clarity of the proposed
approach, relevant expertise and experience of the team member(s), alignment with the criteria
set out in the ToR and overall value for money.

We thank all applicants for their interest; however only shortlisted applicants will be contacted.

Better Cotton is committed to good practice and transparency in the management of natural,
human and financial resources. All applications will be reviewed under the principles and
subject to Better Cotton’s policies on equal opportunity, non-discrimination, anti-bribery &
corruption and conflict of interest.

Request for Proposal – Partner Due Diligence Roll out in Israel – Better Cotton

Strategic Partner Due Diligence Roll out in
Israel
Application deadline: 19 May 2024

Annex 1 : Due Diligence Handbook

HANDBOOK

HOW TO UNDERTAKE AN
ENHANCED BCI PROGRAMME

PARTNER DUE DILIGENCE

21 JUNE 2021

Source: Alliance For Science, Cornell University

BCI REF: 2020-11-IMP-DUE DILIGENCE

Request for Proposal – Partner Due Diligence Roll out in Israel – Better Cotton

Strategic Partner Due Diligence Roll out in
Israel
Application deadline: 19 May 2024

1. Enhanced PP DD Operational Handbook

1.1 Introduction

The enhanced Programme Partner (PP) Due Diligence (DD) framework provides a system for
BCI to enhance its existing processes to enable credible selection of Programme Partners
(PPs), and conduct retrospective DDs on existing PPs. The DD framework provides for a
robust system for conducting a DD, analysing risk and developing related corrective risk
action plans.

1.2 What is a due diligence process and its purpose?

Due diligence is an on-going, proactive, and reactive process through which
companies/organisations can identify, prevent, mitigate, and account for how they address
actual and potential adverse impacts as an integral part of business decision-making and risk
management systems.

The purpose of the Due Diligence processes is to help Better Cotton to ensure that the PPs
we work with, or fund, have adequate governance structures, policies, and operational
systems in place. These processes can also help organisations ensure they observe both
international and domestic law and build towards the requirements of corporate Due
Diligence.

1.3 In practice, how is a due diligence process

structured and accomplished?

The nature and extent of due diligence actions that are appropriate will depend on individual PP

circumstances and can be affected by factors such as the size of the PP, the location of the

activities, and the situation in a particular country such as political and socioeconomic
environment, the sector and nature of the products or services involved, and in BCI’s case an

additional layer with regards to downstream local partners.

Due diligence is thus structured around the steps that companies/organisations should take to:

1. Assess the business and its undertakings to identify the factual circumstances (reality)

under which the business is operating.

2. Identify and assess any actual or potential risks by evaluating the factual circumstances

against recognised standards.

3. Prevent or mitigate the identified risks by adopting and implementing a corrective risk

action plan.

1.4 Implementing a risk-based approach to conducting

the DD

Request for Proposal – Partner Due Diligence Roll out in Israel – Better Cotton

Strategic Partner Due Diligence Roll out in
Israel
Application deadline: 19 May 2024

The BCI enhanced PP DD framework has been structured to enable BCI to implement a risk-
based approach to performing an adequate due diligence. Activities associated with higher
risks will require more intensive due-diligence and monitoring activities. The framework is
designed to capture and understand these risks and rate them according to specific risk
guidance (High risk; Medium risk; Low risk), detailed below.

Ongoing process: Importantly, DD is an ongoing process of gradual improvements. BCI should
encourage change by constructively engaging PPs, and supporting them to build better
organisations.

Encouraging good faith efforts: It is key for BCI to encourage PPs into making good faith efforts,
that is that BCI should anticipate to take reasonable steps and make good faith efforts to carry
out DD with its PPs - meaning that the PPs should be encouraged to participate actively, openly
share all information (whether positive or negative) and communicate where clarity or
additional support is required.

It is important for BCI to proactively engage with the PP and its management, provide
transparent and clear guidance regarding the process and maintain open communication
channels.

It’s unrealistic to expect PPs to achieve full compliance with the guidance overnight.

Mitigate risks but don’t embargo high-risk areas: The enhanced PP DD framework is designed
to help BCI work with its PPs in a responsible way. Except in the most harmful and high risk
circumstances, BCI should leverage its relationships with PPs to improve business conduct and
conditions in respective PP countries and in the field.

Request for Proposal – Partner Due Diligence Roll out in Israel – Better Cotton

Strategic Partner Due Diligence Roll out in
Israel
Application deadline: 19 May 2024

2. Risks areas covered enhanced PP DD

framework

The DD has been developed to help BCI identify whether their PPs pose any risks and prioritise
the most severe risks associated with sourcing cotton from its PPs, ensuring that any risks are
identified are mitigated. The key focus areas of the enhanced PP DD framework are detailed in
figure 1 below.

Figure 1: DD areas covered in the framework

Environment Downstream
Financial

Ethics Governance HR and Local
stability

operations partners

Request for Proposal – Partner Due Diligence Roll out in Israel – Better Cotton

Strategic Partner Due Diligence Roll out in
Israel
Application deadline: 19 May 2024

3. The BCI enhanced PP DD nine-step

process

The nine-step, risk-based due diligence process is relevant to all BCI PPs operating in the cotton
supply chain and applies globally. The nine step process can be found in figure 2 below.

Figure 2: Nine-step BCI enhanced PP DD process

1. Pre-DD preparation

2. IP DD kick-off meeting

3. Weekly check-in meetings with IP - DD Questionnaire
feedback

4. Providing feedback to IP on DD responses

5. Validating IP responses against rubric

6. Developing the risk action plan

7. Financial health check

8. Complete the IP DD report

9. IP meeting to review DD results and agree to the risk action
plan

Each of the nine steps is broken down in detail below.

Request for Proposal – Partner Due Diligence Roll out in Israel – Better Cotton

Strategic Partner Due Diligence Roll out in
Israel
Application deadline: 19 May 2024

Step 1: Pre-DD

The pre-DD process is critical for delineating roles and responsibilities within BCI and
establishing the framework for conducting an effective DD with the PP. The BCI HQ PP DD
coordinator must be proactive in engaging with the country team to ensure that an appropriate
DD roadmap is prepared and that all BCI team members are aware of the implementation plan
and fully invested in its successful delivery. Key steps are outlined below in figure 3.

Figure 3: Key steps to be taken pre-DD

1. Identify BCI HQ staff member for responsible for coordinating
the DD

2. Key roles of BCI DD Coordinator

• Create roadmap for DD process from start to finish

• Frequency of meetings

• Deadlines for receiving information updates from IP

• Deadline for completing DD Questionnaire

• Support and guide BCI Country DD IP Manager throughout DD process

• Lead weekly follow-up calls with IP and BCI

• Responsible for providing feedback and answering IP questions to ensure DD is
completed correctly and on time

• Engaging with IP Senior Management as and where required

3. Identify BCI IP DD Manager from BCI Country Team to serve as
primary contact with IP for purposes of completing DD

4. Key roles of BCI Country DD IP Manager

• Managing the IP relationship

• Managing and handholding the IP through the DD process, translating as
needed

• Setting up shared folders for the IP and ensuring content uploaded as required -
see example below in Figure 4

• Managing timelines and expectations around completion of DD and sharing
information in a timely manner

• Facilitating weekly follow-up calls between IP and BCI

• Early-stage warning to BCI HQ IP DD coordinator and IP CEO/Senior
management on any concerns arising

Request for Proposal – Partner Due Diligence Roll out in Israel – Better Cotton

Strategic Partner Due Diligence Roll out in
Israel
Application deadline: 19 May 2024

Figure 4: Example of shared folder structure

Master schedule of key DD areas Schedule of questions in each DD
area

Tip 1: Critical that BCI Country Team – Country Director and BCI PP DD Manager are engaged and
fully understanding of their role within the DD process in advance of kick-off meeting.

Training will be very important.

BCI HQ handholding during the first couple of DD’s will be key.

Request for Proposal – Partner Due Diligence Roll out in Israel – Better Cotton

Strategic Partner Due Diligence Roll out in
Israel
Application deadline: 19 May 2024

Step 2: Enhanced PP DD kick-off meeting

The enhanced PP DD kick-off meeting is the most important step of the DD process as it sets
the tone for the DD with the PP and should clearly outline to the PP the roadmap for conducing
the DD, and BCI’s expectations of the PP throughout this process to ensure that it runs
smoothly. It is important that both BCI and the PP have appropriate management
representation during the enhanced PP DD Kick-off meeting. See figure 5 below for overview,
and figure 6 for snapshot of the enhanced PP DD kick-off meeting presentation.

Figure 5: Purpose and outcomes of kick-off meeting

Arrange kick-off meeting with IP (see figure 6 below for the link to the slide deck developed for the IP
kick off call meeting)

Purpose of meeting is to explain and walk the IP through the process for undertaking and
completing the DD questionnaire in a timely manner (3 weeks), including walking through the DD
quesionnaire

Critical outcomes of kick-off meeting

IP Senior management buy Discuss and set
Identify DD point person

into and support the DD placeholders for weekly
for IP

process meetings

Tip 2: It is important to ensure that senior management, CEO, Director is present at this meeting
to ensure buy and support for the DD process

Figure 6: Slide deck for guiding PP kick of call meeting

Request for Proposal – Partner Due Diligence Roll out in Israel – Better Cotton

Strategic Partner Due Diligence Roll out in
Israel
Application deadline: 19 May 2024

Enhanced Implementing Partner
(IP) Due Diligence (DD) Process

Enhanced DD kick off session with [Name of IP]

[Country of IP]
[Day] [Month] [Year]

Enhanced IP DD kick off session with [name of IP] 08/06/2021 1
At the end of the kick off meeting, BCI country team will share the questionnaire with the
PP’s team. The excel file to be considered is : PP DD Questionnaire - for sharing with PP

Step 3: Weekly check in meetings – DD questionnaire feedback

Weekly check in meetings provide an opportunity to gauge the progress of the PP, provide
feedback on the process and to support the PP with specific questions/issues that they are
having. During these meetings the BCI Country PP DD Manager must remain focused on
moving the process forward and holding the PP DD point person accountable to deliver in
accordance with the agreed upon timelines, as well as being aware of any possible red flags
that could inhibit the successful completion of the DD questionnaire. Details of timing,
purpose and outputs is detailed below.

Figure 7: Timing, purpose, expected outputs of the weekly check in meetings

Outputs

oProgress update

Purpose is to oIdentify outstanding
Timing questions

move the
approximately oClarify points/

process forward
30 – 45 minutes questions where

and support the required
per meeting

IP as needed oSet new deadlines
and action points at
the end of every
meeting

Tip 3: The DD process needs to continually be moving forward. The goal of the weekly check-in
meetings is to discuss “new” information with the PP. Prior to each meeting the BCI Country PP

Request for Proposal – Partner Due Diligence Roll out in Israel – Better Cotton

Strategic Partner Due Diligence Roll out in
Israel
Application deadline: 19 May 2024

DD Manager should review questions completed by the PP at that juncture and prepare feedback
to share with the PP regarding the latest version of the DD questionnaire. The expectation should

be that the DD questionnaire and shared folder is updated by the PP on an ongoing basis.

Tip 4: Engage the PP’s senior management team if limited progress is being made on the DD
questionnaire and uploading of documents to the shared folder. This can be initiated after a two-

weeks from kick off.

Request for Proposal – Partner Due Diligence Roll out in Israel – Better Cotton

Strategic Partner Due Diligence Roll out in
Israel
Application deadline: 19 May 2024

Step 4: Providing feedback to PP on DD responses

Providing clear and consistent feedback to the PP is critical to the successful completion of
the DD questionnaire and it is the responsibility of the BCI Country PP DD Manager to ensure
that BCI receives DD responses that comprehensively address the questions being asked. See
figure 8 below for the feedback process on the DD questionnaire, and figure 9 for guidance on
providing feedback to the PP on question responses. See Annex 1 for detailed process
examples of how to manage ensuring the PP responds comprehensively to a DD question.

Figure 8: Process for providing feedback to the PP on the DD questionnaire

BCI feedback will be clearly formulated in the dedicated column of the excel file:

Figure 9: Guidance on providing feedback to the PP on question responses

Providing feedback on Specific IP responses to
question responses questions

•Assess whether question has been answered •Always best to get IP to identify the specific
completely piece of information that is being referenced

oAll information requested in the question •For example – if given an HR Manual, but are
provided looking for code of conduct have the IP

oAll required attachments requested have identify the section, page, article that they

been provided are referring to otherwise spend a lot of time

•Request clarity where trying to guess what is being referred to

oResponse is unclear

oRequire additional information/details

Tip 5: Clear feedback must be provided by the BCI Country DD PP Manager in order to receive
complete DD responses from the PP.

Request for Proposal – Partner Due Diligence Roll out in Israel – Better Cotton

Strategic Partner Due Diligence Roll out in
Israel
Application deadline: 19 May 2024

Tip 6: Questions that are clearly not understood or that are being answered incorrectly need to
be escalated to senior management.

Step 5: Validating PP responses against rubric

Validating PP responses against the evaluation rubric is an objective process that measures
the risk level of the PP as per DD questionnaire. Prior to validating any question, the BCI DD
Coordinator should assess the quality of the question and determine that the information
provided by the PP is sufficient to consider the question complete. Below is an outline of the
five step validation process to be followed, see figure 10 below. See Annex 1 for detailed
examples of how to validate an enhanced PP DD question response.

Figure 10: Five step validation process

1. Validating Policies

Review and checking content and quality of policies/procedure
documentation

2. Validating question responses

Cross referencing and validation of questions

3. Leveraging question responses

What to do when one question response supports answering a
different question

4. Risk grading

Using the risk guidance and justifying a risk grade

5. Writing a response on your grading

Tip 7: Be objective and fact-based when validating a response.

Tip 8: It’s important to check the quality and content of the policies and documents uploaded by
the PP to the shared folder to ensure that they cover the adequately address the question to

which they relate.

Request for Proposal – Partner Due Diligence Roll out in Israel – Better Cotton

5 step validation process

Strategic Partner Due Diligence Roll out in
Israel
Application deadline: 19 May 2024

Five step validation process

1. 2.

Validating Policies Validating question responses

Review and checking content and quality of policies/procedure documentation Cross referencing and validation of questions

Scope of policy is defined Clear actions to Accountability

What does the policy operationalise the policy are
Remember that BCI is only

o oReporting mechanisms
in place asking the IP for a specific cover? oDisciplinary actions for If information is available to type of information to

oMake sure specific terms oProcesses and procedures breach When validating you can support the justification for answer a question, but if
are defined (example – are outlined use oPerson(s) responsible the grade provided for a more information can be
child labour, bribery, etc.) oReporting mechanisms in information/documentation particular answer then it is used from other DD

place that has been provided to oExamples best to use it and make responses to demonstrate answer other questions
reference to it commitment/reduction in

risk level, etc. then
supportive

3. 4.
5.

Leveraging question responses - What to do when one question response Risk grading - using the risk guidance and justifying a risk
Writing a response on your grading

supports answering a different question grade

For example, an organisation may Not definitive per se – for

Not every organisation have another document that example, don’t say no risk, it's

will have every policy covers the subject matter, e.g. Using the previous important to preface by

as per the DD. child labour policy, but instead has example, based on Review risk guidance notes for Use of language very saying based on the

However they may a safeguarding policy, which
the quality of the

Review response and high, medium, low risk grade important information provided, or

accounts for child labour issues. safeguarding policy associated attachments allocation there is sufficient evidence to have another policy it might be sufficient Needs to be objective, fact- suggest.
document that covers It is important to note that not to state that the risk Apply score 1,2,3 accordingly based
the subject matter of having a child labour policy does level is negligible
the requested policy. not automatically mean that the IP It's key to provide written

poses any actual risk. justification for the risk score.

Request for Proposal – Partner Due Diligence Roll out in Israel – Better Cotton

Strategic Partner Due Diligence Roll out in
Israel
Application deadline: 19 May 2024

Figure 11: Risk guidance for providing a risk score: [update once finalised by BCI]

Figure 12: Written justification for risk score

Request for Proposal – Partner Due Diligence Roll out in Israel – Better Cotton

Strategic Partner Due Diligence Roll out in
Israel
Application deadline: 19 May 2024

Step 6: Developing the corrective risk action plan

To support the PP in addressing any potential areas of risk exposure identified because of the DD
process it is crucial that the BCI Country DD PP manager develops a corrective risk action plan that
provides effective guidance on how to address any gaps or weak points within the PP’s
organisational structures, operational systems and policies. See below for steps to developing the
corrective risk action plan.

Figure 13: Steps to developing the corrective risk action plan

Develop
implementation

Identify specific
Outline specific plan for addressing

gaps/weak points
actions to be taken IP risk exposure,

in IP response
for addressing including

creating risk
gaps/weak points timeframe and

exposure
responsible
person(s)

Tip 9: The corrective risk action plan should be realistic and practical to implement for the PP based on
the type of organisation, activities they carry out and environment in which they operate.

See figure 11 and 12 above for snapshot of the risk guidance and corrective risk action plan as
per the DD framework – Validation and Corrective Action Plan Rubric Tab 3.

Request for Proposal – Partner Due Diligence Roll out in Israel – Better Cotton

Strategic Partner Due Diligence Roll out in
Israel
Application deadline: 19 May 2024

Step 7: Financial health check on PPs Audited Financial Statements

The aim of undertaking a financial health check (FHC) on the PPs audited financial statements
(AFS) for the last three years is to conduct a review of the AFS in the three areas outlined in figure
14 below. The FHC should be undertaken by a qualified financial expert engaged either centrally
by BCI HQ (allows for consistency) or by the BCI Country Office (de-centralised approach) through
the BCI Country PP DD Manager. The process for undertaking the financial health check is
outlined in figure 15 below; and a link to and overview of the financial health check template can
be found in figure 16 below.

Figure 14: Three areas of review of the financial health check of the PPs Audited Financial
Statements

THE FINANCIAL THE ABILITY OF THE
THE QUALITY OF THE

PERFORMANCE OF THE ENTITY TO CONTINUE AS A
FINANCIALS

ENTITY GOING CONCERN

- Type of financials reviewed: - Income generation: The - Ability to meet short-term
The reviewer must consider reviewer must consider the commitments i.e., over the
the types of financials businesses income next 12 months
reviewed generating ability over the - Reserves and access to

- The standard of financials period. funding
reviewed: - Cost Controls: The reviewer
The reviewer must consider must consider the
the quality of the businesses cost
statements i.e., are they up controlling ability over the
to standard or can be linked period - can provide insights
to an adequately mapped into effective cost
accounting system. allocation.

- Quality of the notes and the - Appropriateness of
support information expenditure: The reviewer
provided: The must consider if the
reviewer must consider if businesses expenditure on
the notes provide sufficient assets or remuneration is
support information. appropriate.

Figure 15: Process for undertaking a financial health check (FHC) on an PPs Audited
Financial Statements (AFS)

Engaging
Preparation BCI

Financial Expert Conduct FHC BCI HQ approval Close
DD Coordinator

to conduct FHC

Pre-alerts
Ensure NDA Financial

Financial
in place expert

Expert that undertakes
DD has FHC BCI DD

kickstarted, Coordinator BCI DD
schedules Share last shares FHC Coordinator

time for three years results with completes
FHC AFS

Complete BCI HQ Financial

templates financial Stability

Share FHC expert (in- Validation

Checks AFS template in house or process

for 3 last word outsourced) using the

years have for sign off validation Share
been made and rubric

Share completed
available on approval

summary templates
the shared

financials and results
folder by the

template in with BCI DD
IP

excel Coordinator

Request for Proposal – Partner Due Diligence Roll out in Israel – Better Cotton

Strategic Partner Due Diligence Roll out in
Israel
Application deadline: 19 May 2024

Tip 10: BCI PP DD coordinator to ensure placeholder booking of the financial expert’s time in advance of
FHC review so to avoid unnecessary delays. Ideally this should be done as soon as the PP DD kick off

meeting has been closed.

Tip 11: Request for AFS to be uploaded to the shared folder as a priority at the kick off call and first weekly
check in meeting, and share with financial expert soon as they are available.

Figure 16: Financial Health Check Template

Request for Proposal – Partner Due Diligence Roll out in Israel – Better Cotton

Strategic Partner Due Diligence Roll out in
Israel
Application deadline: 19 May 2024

Step 8: Complete the enhanced PP DD report

Upon completion of the DD validation process (Step 5), developing the corrective risk action plan
(step 6) and the Financial Health Check (Step 7) the BCI DD Coordinator will be in a position to
complete the enhanced PP DD report. This report provides a summary of the key DD results and
outcomes. These are as per figure 17 below which also outlines the process for completing the
enhanced PP DD report, and figure 18 for a snapshot of the template, including a link to the
template.

Figure 17: Process for completing the enhanced PP DD report

2. Record of 4. Corrective 5. FHC of IPs 6. BCI HQ for
1. IP DD Details 3. DD results

meetings risk action plan AFS approval

• Input details • Complete the •3.1 Summary • Complete the • Copy and • Share with
of the IP DD as schedule of of DD results corrective paste the FHC the BCI HQ
per template meetings and • -Copy and action plan template lead for
requirements key activities paste from DD template by results for the approval and
(name of IP, undertaken framework dropping in IP into this sign off
start date, end during the DD Tab 1 the detail from section
date, IP DD process. •3.2 Key points Tab 2 in the
team, BCI HQ to note on key DD framework
team, BCI areas of
Country team review
etc)

• -Complete
sections
accordingly

Tip 12: Start completing and uploading information to the enhanced PP DD report at kick off of the DD
and thereafter on a weekly basis (e.g., Record of meeting/ key activities) and as information is complete

and ready for input.

Figure 18: Enhanced PP DD Report Template

Request for Proposal – Partner Due Diligence Roll out in Israel – Better Cotton

Strategic Partner Due Diligence Roll out in
Israel
Application deadline: 19 May 2024

Step 9: PP meeting to review DD results and agree to the corrective risk action plan

The DD process will culminate with BCI reviewing the results of the DD with the PP and agreeing the
corrective risk action plan. See figure 19 below for guidance for the meeting to review the DD results and
agree the action plan meeting with the PP.

Figure 19: Steps for the enhanced PP DD results and action plan meeting

BCI Country Corrective
Corrective

IP DD risk action
risk action

Manager and Review risk IP provides plan
plan and

BCI HQ IP DD areas and feedback on amended,
timeline for

manager to corrective corrective including
delivery

review high risk action risk action agreed
agreed

level DD plan with IP plan to BCI support
between BCI

results with needed from
and IP

IP BCI

Tip 13: It is important to ensure that senior management, CEO, Director is present at this meeting to
ensure buy-in and support for agreeing the corrective risk action plan.

Tip 14: PP feedback on the corrective risk action plan is critical to ensure that it is fit for purpose and
achievable.

Tip 15: Do not rush/force the PP into providing feedback on the corrective risk action plan or agreeing its
contents immediately. If required, agree a timeline for the PP to provide feedback on the corrective risk

action plan and arrange a follow-up meeting to formally agree its contents.

Tip 16: The PP may require BCI to share standard policy content and or additional support.

Request for Proposal – Partner Due Diligence Roll out in Israel – Better Cotton

Strategic Partner Due Diligence Roll out in
Israel
Application deadline: 19 May 2024

4. Key takeaways and learnings

The below are key takeaways and learnings from the pilot to keep in mind as the BCI PP DD
manager starts the enhanced DD process with an PP.

Overall, it is important for the BCI HQ team to check in regularly with the BCI PP DD manager
to ensure they are on track if they are coming up against unforeseen challenges so to be able
to ensure the DD stays on track and that the DD PP Manager has the support required to
ensure the process is completed. This may mean that the BCI HQ team need to arrange a
meeting with the PP’s CEO and senior management.

Request for Proposal – Partner Due Diligence Roll out in Israel – Better Cotton

Strategic Partner Due Diligence Roll out in
Israel
Application deadline: 19 May 2024

Request for Proposal – Partner Due Diligence Roll out in Israel – Better Cotton

Partner Due Diligence Roll out
Applications deadline: 3rd of January 2022

ANNEX 1: Examples of how to go through validating a question
response (PP X example)

Q13. Is there a grievance mechanism in place and is it known by staff? [Yes/No; please attach]

Step 1 – 1. What information is • Does PP X have a grievance policy in place?
understand the being requested in the • Is the grievance mechanism that is in place
question question? known by PP X staff?

2. What needs to be • Are PP X’s grievance mechanisms

determined about the appropriate?

grievance process? o Note this is the difference between receiving

a 2 (amber) and a 4 (green)

Step 2 - Response • The response indicates that PP X has a grievance mechanism in place
1 provided by PP • The policy document has been provided by PP X

• To determine if the response is sufficient as is it is necessary to review the

policy document

• Attachments can be found in the shared folder for the PP (sub-folder “Ethics”,

sub-sub folder “Q15”)

Step 2.a - • The grievance policy is not very detailed; only provides information for the
Document contact person in the event that an employee would like to raise a grievance
Review

Step 2.b - Is the • No • What information is missing?
response o Is the grievance mechanism known by staff?
complete at this o Is the grievance mechanism in place
stage? appropriate?

We know that there is a procedure, but that

has not been outlined in the policy or the

written response

Step 3 – • The response gives a basic outline of the grievance procedure
Response 2 • The PP has introduced a new policy that they are attributing to be part of the
provided by PP grievance policy

• The PP has identified that training is provided on an annual basis

Step 3.a - • Policy provided is PP X’s sexual harassment policy
Document • Does not encompass general grievances, so while it is helpful, it does not
Review really relate to answering the question

Step 3.b - Is the • No • What information is missing?
response o It is still unclear whether the grievance
complete at this mechanisms in place are acceptable
stage? o More detail is required

o In this instance need to understand very

clearly the sequence of events from time

1 Request for Proposals – Partner Due Diligence Roll out – Better Cotton – 1

2021

Strategic Partner Due Diligence Roll Out In Israel

Applications deadline: 13th May 2024

grievance raised and final decision

communicated by management

Step 4 - Response • Sequence of events more clearly explained
3 provided by PP

Step 4.a - Is the • No • The procedure that has been outlined is not
response codified
complete at this • Further confirmation is required from Senior
stage? Management in order to validate that the
process as outlined in the response is

accurate

Step 5 - Engage • Engage Senior Management - if the process still remains unclear having
Senior engaged with the PP DD Point Person three times.
Management • The process as outlined by in the response is not codified in the attached
[note that this policy document
step may not be

• Since the process is not codified further confirmation from a Senior Manager
necessary for all

is required because at this time it still cannot be determined as to whether the
questions].
grievance policy in place is acceptable

Step 5.a - • Senior Manager provides confirmation and clarification related to the process
Response provided in the written response
provided by the
PP

Step 6 - • What can be concluded?
Validating the o There is a grievance mechanism in place at PP X
Response o The grievance mechanism is known by staff – induction and refresher training
provided

o Grievance mechanisms in place are acceptable; however, the grievance

process is not codified in the HR Handbook for Consultants.

o This does not pose any significant risk to BCI as the mechanisms are in place

and known by staff, but should be addressed by the management team at PP

X

2 Request for Proposals – Better Cotton – April 202

Strategic Partner Due Diligence Roll Out In Israel

Applications deadline: 13th May 2024

Q22.Are all statutory deductions (e.g. payroll deductions) paid and paid on time? [Yes/No]

Step 1 – understand the 1. What information is being • Confirmation that statutory deductions are
question requested in the paid in full and in a timely manner.

question?

2. What needs to be • Does PP X make its statutory deductions in line

determined? with the requirements of the countries that it

operates in?

Step 2 - Response 1 • Stated that the question is not applicable since PP X does not have an
provided by PP established entity in Pakistan

Step 2.b - Is the • No • What information is missing?
response complete at o Confirmation that statutory
this stage? deductions are paid in full and in a
timely manner.

o Confirmation that PP X makes

statutory deductions in line with the

requirements of the countries that it

operates in.

Step 3 – Response 2 • Additional information provided does not adequately address the question
provided by PP

Step 3.b - Is the • No • What information is missing?
response complete at o Confirmation that statutory
this stage? deductions are paid in full and in a
timely manner.

o Confirmation that PP X makes

statutory deductions in line with the

requirements of the countries that it

operates in

Step 4 - Response 3 • Provides some information as to how statutory deductions are paid by
provided by PP Consultants from PP X Pakistan
• However, no further indication as to whether the organisation makes its

statutory deductions and how it does so.

Step 4.a - Is the • No • What information is missing?
response complete at o Confirmation that statutory
this stage? deductions are paid in full and in a
timely manner.

o Confirmation that PP X makes

statutory deductions in line with the

requirements of the countries that it

operates in

3 Request for Proposals – Better Cotton – April 202

Strategic Partner Due Diligence Roll Out In Israel

Applications deadline: 13th May 2024

Step 5 - Engage Senior • After 3 attempts by the PP DD Point Person the question has still not been
Management adequately responded to and it appears that the PP DD Point Person might not
be best suited to answering the question

• Insight from a Senior Manager is required because at this time it still cannot be

determined as to whether PP X makes its statutory deductions and how it does

so.

Step 5.a - Response • Information has been provided as to how PP X UK makes its statutory deduction
provided by the PP at the global level and in country.

Step 6 - Validating the • What can be concluded?
Response o It can be confirmed based on the information provided that PP X makes all
statutory deductions and pays them in full as the requirements of the

countries that it operates in?

Q33.With regards to data protection please describe how the Company/Organisation undertakes and records
data, and how data gathered is managed and protected (in terms of, for example,
managing/hosting/disclosing farmer and beneficiary data) [Please detail]

Step 1 – understand the 1. What information is • Does PP X have a Data Management and
question being requested in the Security Policy?

question? • If no, does PP X have suitable processes

and procedures for managing beneficiary

data?

2. What needs to be • Is the policy fit for purpose?

determined about the

grievance process?

Step 2 - Response 1 • The response indicates that PP X has Security and Data Management Policy
provided by PP in place

• The policy document has been provided by PP X

• To determine if the response is sufficient as is it is necessary to review the

policy document

• Attachments can be found in the shared folder for the PP (sub-folder

“Governance”, sub-sub folder “Q28”)

Step 2.a - Document • The Data and Security Management Policy appears to be applicable to use
Review of PP X’s website.
• It appear that the question has not been properly understood

Step 2.b - Is the • No • What information is missing?
response complete at o Does PP X have a Data
this stage? Management and Security Policy?
o If no, does PP X have suitable

processes and procedures for

managing beneficiary data?

o Is the policy fit for purpose

4 Request for Proposals – Better Cotton – April 202

Strategic Partner Due Diligence Roll Out In Israel

Applications deadline: 13th May 2024

Step 3 – Response 2 • The response appears to indicate that PP X’s contract agreements with
provided by PP third parties such as BCI contains IT and confidentiality clauses, but is unclear

what that means.

• No further clarification has been provided regarding the Data Management

and Security Policy that was provided

Step 3.a - Document • No additional documentation provided
Review

Step 3.b - Is the • No • What information is missing?
response complete at o Does PP X have a Data
this stage? Management and Security Policy?
o If no, does PP X have suitable

processes and procedures for

managing beneficiary data?

o Is the policy fit for purpose

Step 4 - Response 3 • No additional information provided
provided by PP

Step 4.a - Is the • No • What information is missing?
response complete at o Does PP X have a Data
this stage? Management and Security Policy?
o If no, does PP X have suitable

processes and procedures for

managing beneficiary data?

o Is the policy fit for purpose

Step 5 - Engage Senior • Engage Senior Management - if the process still remains unclear having
Management engaged with the PP DD Point Person three times.
• Insight from a Senior Manager is required because at this time it still cannot

be determined as to whether PP X has either a policy or processes in procedures

for managing beneficiary data

Step 5.a - Response • Feedback from Senior Management indicates that PP X does not have a
provided by the PP Data Management and Security Policy in place for managing beneficiary data;
rather the company implements data management and security protocols for

specific projects as per the requirements of the donor partner

• There is no written policy and/or processes or procedures, but it was stated

that PP X employs a sensible approach to managing and disclosing data

• Response is complete

Step 6 - Validating the • What can be concluded?
Response o There is no Data Management and Security Policy in place at PP X
o There is a need for PP X to draft and implement a Data

Management and Security Policy

o The risk posed to BCI is limited as the contract agreement between

PP X and BCI will include provisions for managing beneficiary data

5 Request for Proposals – Better Cotton – April 202