Skip to main content

Human Rights Due Diligence: Navigating EU Regulatory Requirements

A Practical Approach for CSDDD Readiness

 

Human Rights Due Diligence (HRDD) is essential for businesses operating within the European Union (EU) to ensure they address human rights impacts in their value chains. Our new 'HRDD: Navigating EU Regulatory Requirements' whitepaper outlines the EU regulatory frameworks mandating companies to integrate human rights considerations into their corporate strategies, and essential first-step actions for businesses

Key Regulations

  • Requires companies to conduct human rights and environmental due diligence throughout their value chains.
  • Companies must identify, assess, prevent, and mitigate human rights impacts and report publicly on their efforts.
  • Mandates companies to disclose their sustainability efforts, including human rights impacts, risks, and opportunities.
  • Emphasises transparency in due diligence processes and outcomes.
  • Promotes responsible business practices and investments contributing to social sustainability.
  • Ensures that investments do not violate human rights and labour rights.
  • Requires financial market participants to disclose Principal Adverse Impact (PAI) on sustainability factors, including human rights.

Implementation Approach

1. Embedding HRDD in Corporate Governance:

  • Integrate HRDD processes into corporate policies and management systems.
  • Collaborate with supply chain partners and ensure comprehensive risk assessment mechanisms.

2. Risk Assessment and Mitigation:

  • Identify and assess actual and potential adverse human rights impacts.
  • Take action to cease, prevent, and mitigate these impacts.

3. Stakeholder Engagement: 

  • Engage meaningfully with stakeholders throughout the HRDD process.
  • Ensure two-way communication and responsiveness to stakeholder inputs.

4. Tracking and Reporting:

  • Monitor the effectiveness of HRDD policies and actions using qualitative and quantitative indicators.
  • Communicate due diligence efforts through public reporting, ensuring transparency and accountability.
  • Future Proofing HRDD.

5. Human Rights Impact Assessment (HRIA):

  • Conduct HRIA in addition to Double Materiality Assessment (DMA) and identification of PAIs.
  • Update DMA based on HRIA findings.

7. Value Chain Mapping:

  • Map the entire value chain to improve visibility of business relationships, especially in high-risk geographies

8. Governance and Data Management:

  • Establish a robust governance structure with clear responsibilities for HRDD.
  • Implement data management systems to support due diligence activities and reporting requirements.

Conclusion

This report provides practical insights and tools for businesses to navigate the complex landscape of EU human rights due diligence regulations. By adopting a pragmatic, integrated approach, companies can build robust, future-proof systems for human rights compliance, ensuring they meet their regulatory obligations and contribute to sustainable business practices.

Did you find this useful?

Thanks for your feedback