A clear path to human rights compliance

Human Rights Due Diligence (HRDD) is essentially a management tool that helps companies to minimize their negative human rights impacts.

HRDD is the process of identifying, assessing, preventing, mitigating and remedying negative human rights impacts, and accounting for how the company has done this. Building a strong human rights culture within a company and regularly engaging with potentially impacted people is key to this process.

Negative human rights impacts are linked to internationally recognised human rights, as defined in the International Bill of Rights and the ILO’s Fundamental Conventions. These include protections against forced and child labour, the right to health, the right to collective bargaining and the right to not be discriminated against. In addition, businesses may not negatively impact the land or cultural rights of indigenous people, their employees’ freedom of thought and the right to a healthy environment.

As companies can impact so many different human rights, it is vital to conduct HRDD to identify and reduce existing and potential negative impacts.

In 2011, the UN Guiding Principles for Business and Human Rights was released. It set out that companies should respect human rights and provided HRDD as a framework for how to do this. This framework was soon adopted by the OECD.

An increasing number of national laws are now mandating that companies conduct human rights due diligence. In addition, HRDD is integrated into the EU’s understanding of its Green Deal, meaning that HRDD is required to fulfil EU Taxonomy alignment and is also a central part of CSRD disclosure requirements.

The EU’s new Corporate Sustainability Due Diligence Directive (CSDDD) will require all in-scope companies to conduct HRDD. There are also several niche EU Directives and proposals that will be best met by companies conducting HRDD, such as the EU Deforestation Regulation and the proposed import bans for products and materials linked to forced labour.

There will be trickle-down effects for actors within the supply chain of companies responding to mandatory HRDD laws as these companies will increasingly demand the same standards throughout their value chain.

The Corporate Sustainability Due Diligence Directive (CSDDD) will require in-scope organizations to carry out human rights and environmental due diligence – or sustainability due diligence – throughout their own operations and supply chain. HRDD is the framework that the CSDDD requires companies to utilize when complying with the law, applying it to both human rights and environment impacts.

HRDD is rooted in the UN Guiding Principles of Business and Human Rights and used in the OECD guidelines for multinational enterprises – the frameworks on which the CSDDD regulations are based. This means that if you already integrate HRDD into your reporting repertoire, you are in a strong position to comply with the new directive.

In 2023, the Canadian Parliament passed Bill S-211, the Fighting Against Forced Labour and Child Labour in Supply Chain Act, other wise known as the Modern Slavery Act. This Act aimed at combating forced labor and child labor in corporate supply chains and came into effect January 1, 2024. Learn more how this affects your company.