FAQs
Frequently asked questions
What is (corporate) human rights due diligence?
Corporate human rights due diligence is a continuous process to help enterprises identify risks relating to human rights, labour rights and the environment with a view to ending, preventing or mitigating those risks. Human Rights and Environmental Due diligence (HREDD) is an essential element of international responsible business conduct and is developed by the internationally widely recognized OECD Guidelines for Multinational Enterprises (2023) and the United Nations Guiding Principles (UNGPs).
It is in fact a risk management process, considering risks for people and the environment and not only risks for the business.
Why human rights due diligence?
Companies should do human rights and environmental due diligence (HREDD) because it’s both a legal necessity and a business imperative, but the most compelling reasons go beyond compliance. Here are the most mentioned reasons to undertake human rights and environmental due diligence:
1. It’s increasingly required by law
Global trend towards mandatory HREDD: The EU’s Corporate Sustainability Due Diligence Directive (CSDDD), the EU Forced Labour Regulation, Germany’s Supply Chain Act, France’s Duty of Vigilance law, and similar laws in Norway, and beyond all require companies to identify, prevent, and address adverse human rights and environmental impacts.
Export and market access: Compliance is often a precondition for selling to certain markets, winning public tenders, or keeping contracts with large customers who must themselves comply.
2. It manages risk and protects value
Avoid costly crises: Supply chain abuses (forced labour, deforestation, unsafe working conditions) can lead to lawsuits, fines, product bans, and reputational damage.
Investor confidence: ESG-minded investors are increasingly factoring human rights and environmental performance into their decisions.
Resilient supply chains: Identifying risks early helps avoid disruptions and strengthens supplier relationships.
3. It’s what stakeholders expect
Consumers: More than ever, customers expect ethical and sustainable products and react quickly to news of abuses.
Business partners: Multinationals often require their suppliers to show proof of due diligence.
Employees: Talented people want to work for companies that live their values.
NGOs and Media are holding companies accountable for negative impacts in their supply chains.
4. It creates opportunities and competitive advantage
Innovation: Solving sustainability and rights challenges can drive new products, processes, and markets.
Brand differentiation: Being a leader in responsible business can strengthen brand loyalty and open doors to partnerships.
Long-term value creation: Respecting people and planet supports stable, sustainable growth.
5. It’s the right thing to do
Moral responsibility: Businesses can be a powerful force for good, especially where governments lack capacity to protect people and the environment.
UN Guiding Principles & OECD Guidelines: Internationally agreed standards make clear that companies have a responsibility to respect human rights and avoid environmental harm, regardless of local laws.
Bottomline: Doing human rights and environmental due diligence isn’t just about avoiding harm — it’s about being fit for the future. The companies that integrate it into their core operations will be better prepared for regulation, more trusted by stakeholders, and better positioned for long-term success.
What does due diligence mean?
Human rights due diligence (HRDD) means a company takes ongoing, proactive steps to understand how its activities and those of its suppliers, contractors, and other business partners could harm people, and to take action to prevent or address that harm.
It’s not a one-off audit; it’s a continuous process that covers the entire value chain, in line with the UN Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises.
Key elements of HRDD
1. Commit to respect human rights in a public policy
2. Identify and assess risks and impacts
Understand where and how the company’s operations, products, or services could cause or contribute to human rights harm (e.g. child labour, unsafe working conditions, discrimination, displacement of communities) and how it is linked to it.
Acting with integrity, transparency, and accountability.
3. Integrate and act on findings
Build the findings into policies, management systems, and day-to-day decisions.
Work with suppliers and partners to prevent or mitigate risks.
4. Track progress
Monitor whether the measures taken are effective in reducing harm.
5. Communicate transparently
Report to stakeholders (employees, investors, communities, customers) on the risks identified and the actions taken.
6. Enable remedy
Where harm has occurred, take steps, directly or with partners, to provide or support remedy for affected people.
What is Responsible Business?
Responsible business means running a company in a way that creates value without causing harm to people or the planet and, ideally, contributing positively to both.
It goes beyond making a profit: it’s about integrating ethical, social, and environmental considerations into decisions, products, services, and relationships, throughout the entire value chain.
This is exactly what the governments expressed in the OECD Guidelines for Multinational Enterprises for responsible business conduct and expect from companies: to respect human rights, protect the environment, uphold good governance, and contribute to sustainable development.
What are responsible business practices?
Core aspects of responsible business
1. Environmental stewardship (E)
Minimizing environmental harm and supporting the transition to a sustainable economy.
Using resources efficiently and protecting ecosystems.
2. Respect for people (S)
Safeguarding human rights in operations and supply chains.
Providing safe, fair, and inclusive workplaces.
3. Good governance (G)
Acting with integrity, transparency, and accountability.
Having systems in place to prevent corruption and unethical practices.
What does the CSDDD mean?
The Corporate Sustainability Due Diligence Directive is a due diligence legislation requiring companies to identify, prevent, reduce and end negative human rights and environmental impacts in their operations and value chains. Companies also need to report annually on impacts and actions. Read our blog on everything you need to know about CSDDD.
The difference with the Corporate Sustainability Reporting Directive (CSRD) is that this directive requires companies to produce an annual report disclosing the impacts, risks, opportunities and action plans associated with their material environmental, social and governance (ESG) issues and resulting from their due diligence process.
Who does the CSDDD apply to and when
The CSDDD was officially adopted in June 2024 as Directive (EU) 2024/1760 and is considered current EU law.
It establishes a mandatory due diligence framework requiring large EU and nonEU companies (initial thresholds: >1,000 employees and >€450 M turnover) to identify and mitigate human rights and environmental risks across their operations and chain of activities.
Timeline Delays via “Stop-the-Clock” and Omnibus
The European Parliament approved a “stop-the-clock” Directive in April 2025, postponing key deadlines:
Transposition deadline (when Member States must adopt the law): moved to July 26, 2027.
Initial application date (when companies must start complying): moved to July 26, 2028
For Omnibus changes under negotiation see my blog.
Do corporations have human rights obligations?
What is the responsibility of companies to respect human rights?
Respecting human rights means not infringing on the rights of others. This is not a passive responsibility. Companies cannot assume that everything is fine simply because they have not received any complaints. It is a proactive responsibility. The UN Guiding Principles set out a global standard describing how companies should ensure they do not infringe on the rights of others by conducting due diligence, and that they should address any adverse human rights impacts with which they are involved.
What are the leading principles on business and human rights?
These are the UN Guiding Principles on Business and Human Rights. They were unanimously endorsed by the United Nations in 2011 after worldwide consultations with states, businesses, and NGOs. Together with the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct, they are the most authoritative and widely agreed-upon standards. They form the basis for EU legislation such as the CSRD and the CSDDD.
The UNGPs consist of 31 principles, framed around three main pillars:
- The state duty to protect against human rights abuses,
- The corporate responsibility to respect human rights, and
- The access to remedy for victims
Supported by these three pillars, the UNGPs recommend that, in order to demonstrate and implement respect for human rights, companies should:
Make a public commitment to respect human rights
Identify, prevent, mitigate, and account for adverse human rights impacts
Have processes in place to remedy any adverse human rights impacts they cause or contribute to
These guidelines have become the basis for all legislation initiatives regarding human rights and environmental due diligence.
What are examples of human rights?
Human rights cover a wide range of issues that companies may encounter. They all have in common that they apply to everyone, everywhere in the world, and are enshrined in international treaties. Below are a few examples:
Forced labour: This refers to work that is involuntary and carried out under threat. It can involve migrants who must repay large debts they incurred to secure the job, or prisoners performing forced work.
Land rights: Local communities have the right to the land they have used for generations. Companies purchasing land must investigate whether such groups with land rights are present.
Non-discrimination – Companies must ensure that they do not place individuals in an inferior or disadvantaged position in the workplace based on their gender, age, nationality, ethnicity, race, skin colour, religion or belief, caste, language, mental or physical disability, political opinion, social origin, or any other characteristic unrelated to the job performed. Some companies already embrace this principle in their Diversity Equity and Inclusion policies.
Curious what this could mean for your organisation?
Feel free to get in touch for an informal conversation about what fits your needs and we can send you a proposal.