No, we do not recommend reading the new Study of the European Commission: the document contains a whopping 572 pages. At the same time, we would not want you to ignore it – the report is yet another signal that businesses will soon be legally required to comply with human rights due diligence requirements. Luckily, we have reviewed the study for you.
If you are a subscriber to our newsletter, you already know that many countries are in the process of introducing legislation on human rights due diligence. These new laws all have one thing in common: they make it mandatory for businesses to identify, prevent and mitigate adverse human rights impacts throughout their supply chain.
A new study, published in February 2020 and ordered by the European Commission, reveals a broad consensus among stakeholders that harmonized EU-wide legislation on human rights due diligence would help level the playing field and provide clarity to businesses.
First step towards additional regulation?
The aim of the Study was twofold:
- To provide an overview of current legislation and practices
- To develop and assess regulatory options, “including the possibility of introducing due diligence requirements as a legal duty of care at the European level” (p. 10)
The Study considered various options, ranging from no additional regulation to a general duty applicable to businesses of all sizes and types. It also contains the results of a large-scale survey, which had been conducted to assess the extent to which businesses already have due diligence processes in place.
Importantly, unlike many of the national legislations, the plans of the EU Commission not only cover due diligence for human rights, but also for environmental impacts.
The Result: Consensus that Due Diligence should become mandatory
The large majority of stakeholders (business survey respondents (75.37%), civil society organisations (96.51%) and industry organisations (62.5%)) agreed that EU-level regulation on a general due diligence requirement for human rights and environmental impacts may provide benefits for business through “[p]roviding a single, harmonised EU-level standard (as opposed to a mosaic of different measures at domestic and industry level)”.
It is now up to the European Commission whether or not to follow the recommendations of the report, but given that many member states are already introducing due diligence legislation, and given the ambition of the current European Commission when it comes to sustainability, legislative proposals can be expected to follow.
What are the expectations towards Businesses?
It is expected that EU legislation on human rights and environmental due diligence would be based on the UN Guiding Principles on Business and Human Rights. As such, any new legislation will contain at least the following requirements:
- A process to identify actual and potential human rights impacts, both for the operations of the company as well as throughout the supply chain
- Measures to prevent adverse human rights impacts and a process to verify the effectiveness of these measures
- Reporting publicly on human rights approach and impacts
- Providing a channel for remediation or participate in existing remediation processes
How DQS can support your Due Diligence:
As an independent audit and assessment provider, we can support your due diligence processes with the following services:
– Gap analysis and validation of your due diligence procedures
– Human Rights Assessments
– Social and environmental compliance audits
– Supplier audits across the globe
– Training and capability building
– Verification of sustainability reporting