Human rights due diligence as part of corporate risk management : insights from the EU policy debate

Abstract

Purpose: This paper investigates possible modalities of new EU-wide mandatory human rights due diligence (mHRDD) measures and their implications for the practice of corporate risk management. Design/Methodology/Approach: The contribution originates in a desk-based review and analysis of the EU policy debate and other relevant scholarly and stakeholder contributions. The applied research methodology includes a combination of theoretical and analytical methods. Findings: Businesses' input pointing out the specificities of branches and suggesting best practices for implementing HRDD obligations is highly relevant for framing upcoming legislation. Proper fulfillment of HRDD obligations will, however, be definitively ascertained in court only. Compliance-oriented risk management accounting solely for the risks to the company may thus prove insufficient regarding HRDD and eventually lead to liability. Practical Implications: Given expectations of high corporate due diligence standards by investors, consumers and civil society on the one hand, and the prospective new EU HRDD measures on the other, it appears desirable for companies to take appropriate steps so as to adapt their business structures and operations for the endorsement of such new HRDD standards. Originality/Value: The contribution provides insights into mHRDD as a prospective new legal standard of care for companies operating on the EU Internal Market. ; peer-reviewed