In brief

The global trend on sustainability is gaining momentum in many aspects. Corporate entities are being obliged to operate with more sophisticated social responsibility towards all stakeholders. This time we discuss the developing legal landscape of human rights due diligence (“HRDD“), another element in the “S” of the ESG (environment, social and governance) movement.

Human rights due diligence – What is it?

HRDD is a method for enterprises to proactively manage potential adverse human rights impacts (e.g., unsafe and unhealthy working conditions for workers, child labour and forced labour) in which they are involved, either through their own activities or which may be directly linked to their operations, products or services by their business relationships.

According to the Office of the United Nations High Commissioner for Human Rights, HRDD includes the following four core components:

1. Identifying and assessing actual or potential adverse human rights impacts;
2. Integrating findings from impact assessments across relevant company processes and taking appropriate action;
3. Tracking the effectiveness of measures and processes to address the impacts; and
4. Communicating on how impacts are being addressed to the stakeholders.

For background, the aim to achieve the protection of human rights has been discussed and included in several international conventions over the last decade. The United Nation Guiding Principles on Business and Human Rights, endorsed in 2011, provided an internationally recognized framework for duties and responsibilities of governments and business enterprises to prevent adverse human rights impacts. Practical guidelines on HRDD implementation have been further provided in the globally recognized OECD Guideline on Responsible Business Conduct, and its concept has also been embedded in the International Labour Organization (ILO) Tripatite Declaration of Principles concerning Multinational Enterprises and Social Policy.

It has become clear for the international community that companies throughout the global value chain play a vital role in realizing effective and sustainable protection of human rights. This has resulted in several initiatives to build legal frameworks with a higher level of sanctions that require companies to identify, assess, prevent and mitigate risks, and, where necessary, remedy the negative impacts of their activities that cause human rights abuse in their supply chains.