Mandatory Human Rights Due Diligence

Mariana Abreu

Global Lead, Human Rights

Contents

• Influence of UNGPs
• Human Rights & The Environment
• Supply Chain Transparency
• How Anthesis Can Help
• Contact Us

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Human rights due diligence (HRDD) is an ongoing process of identifying, mitigating and reporting on a business’ actual and potential human rights and environmental impacts. It focuses on identifying risks to rightsholders, rather than material risks to the business itself. HRDD is a foundational element of responsible business practices, essential for safeguarding workers and communities, strengthening supply chains, and managing reputational and compliance risks. It encompasses risk identification and assessment, impact mitigation, effectiveness monitoring and measurement, communication of efforts, and provision of remedy when adverse impacts occur. The HRDD process is outlined in leading international frameworks such as the UN Guiding Principles on Business and Human Rights (UNGPs) and OECD Guidelines for Multinational Enterprises (OECD Guidelines).

The rise of mandatory human rights due diligence (mHRDD) is reshaping the landscape of responsible business practices, driven by emerging regulations such as the Corporate Sustainability Due Diligence Directive (CSDDD) adopted in 2024 and scheduled to begin taking effect in 2027. Approximately 6,900 European and non-European companies are in scope for the Directive, which represents a significant shift from voluntary to mandatory HRDD. mHRDD codifies the HRDD process and imposes legal obligations for companies to conduct HRDD in line with the UNGPs and OECD Guidelines with clear requirements and penalties for non-compliance.

CSDDD and the broader evolving regulatory environment mark a legislative shift towards mandated responsible business practices within the EU. Most companies who are in scope for CSDDD will need to adjust their internal processes to comply, as only 6% of companies currently have fully implemented HRDD – while 80% have not taken any steps to implement. This new environment is pushing companies to gain greater awareness of the responsible business landscape, three key points of which are explored below:

1. The Influence of the UNGPs in Shaping mHRDD

Adopted in 2011, the UNGPs are a practical framework intended to translate human rights concepts into sustainable, actionable business practices. They serve as the “backbone” of responsible business conduct on human rights and guide most government efforts to legislate on the topic. Several HRDD regulations across the world draw on the UNGPs, and from one another – meaning individual national legislations often tend to converge on key requirements and processes.

For example, The French Law on the Corporate Duty of Vigilance (2017) set a precedent by requiring businesses to have human rights and environmental vigilance plans, laying the foundation for similar laws in Germany (2023), the Netherlands (2022), and Norway (2022). Laws in the EU have also inspired regulations in other parts of the world, such as Canada’s Fighting Against Forced Labour and Child Labour in Supply Chains Act (2024).

These regulations all draw key insights from the UNGPs, such as their risk assessment criteria, emphasis on stakeholder engagement, or requirements around grievance mechanisms. None of these regulations contradict the UNGPs – meaning companies aligned with the framework will be future-proofed in responding to HRDD-related regulations, enabling them to anticipate and adapt to these trends no matter where they emerge.

2. Intersection of Human Rights and the Environment

The link between human rights and the environment is increasingly recognised by regulators, notably in the follow-up to the United Nations’ recognition of the right to a clean, healthy, and sustainable environment as a human right in 2022. This holistic approach recognises that environmental harms often also lead to adverse human rights impacts, and vice-versa. It is reflected in the regulatory space through Human Rights and Environmental Due Diligence (HREDD)-related regulations, as well as the emergence of environment-focused regulations compatible with an HRDD approach such as the EU Deforestation Regulation.

While similar to HRDD, HREDD explicitly includes environmental impacts as part of due diligence obligations. Emerging legislation such as CSDDD recognises the need to tackle and integrate human rights and environmental abuses linked to corporate supply chains. 

3. Transparency In Supply Chains

Human rights risks extend beyond the first tier of a company’s supply chain. In line with the UNGP approach, which argues companies are “directly linked” to all in their value chains, HRDD and HREDD regulations are increasingly expanding the requirement scope to include Tier 1 suppliers and beyond. The German Supply Chain Due Diligence Act and CSDDD require greater visibility and reporting across multiple tiers of the supply chain. Targeted approaches are needed to address the visibility gap between multinationals and their Tier 2+ suppliers, notably for those sourcing natural resources and commodities known for complex and fragmented supply chains.

How Anthesis Can Help

Anthesis can help businesses conduct HRDD and HREDD by identifying, assessing, mitigating, communicating, and remediating impacts in their operations and supply chains. Our approach is aligned with the UNGPs, and includes:  

• Benchmarking, gap analyses & policy development in line with regulatory obligations and best practices;
• Saliency assessments across the value chain to map risks and prioritise actions;
• Human rights risk assessments for raw materials and supply chains identified as high-risk during a saliency assessment;
• Independent investigations into alleged abuses and development of remediation plans;
• Country- or commodity-level human rights impact assessments to identify and address salient human rights issues, including site visits to conduct visual observations and meaningful rightsholder engagement;
• Prevention and mitigation action plans supplemented by KPIs and assignments;
• Review and upscaling of grievance mechanisms (also referred to as complaints procedures, ethics reporting, etc.);
• Capacity building, including training and development on ethical trade, human rights, gender equality, modern slavery and establishing effective grievance mechanisms and worker representation models for global supply chains.