After long preparations and many postponements, The European Commission launched the first draft for a law on mandatory human rights and environmental diligence on 23 February 2022. This law, once in force, would mean that companies in the EU are required to respect human rights – and conduct due diligence for human rights and environment.
On 25 February Sandra Atler, Director of Enact’s Human Rights and Business Practice Group, and Caroline Nordvall, project manager and advisor at Enact, held a brief lunch seminar on the draft law. During the seminar, they presented condensed and relevant information about core elements of what the proposed EU-directive contains, when the law can be expected to become mandatory in various countries and how participants can begin preparing already now.
Some of the questions addressed include:
- To which companies will the legislation apply (big, medium, small)?
- How far in the value chain are companies expected to be accountable (first, third, fifth tier)?
- What exact components of HRDD will be mandatory?
- What are likely new disclosure requirements?
- Sanctions – what happens when something goes wrong (Board responsibility, forms of liability, torts, fines)?
Watch the lunch seminar here:
About the mHREDD and Human Rights Due Diligence
Ten years ago, the United Nations Human Rights Council endorsed the UN Guiding Principles on business and human rights. They outline how companies should ensure that they respect human rights. A decade later, whilst some companies have made progress –a large majority of global companies still fail to consider human rights. Companies continue to prioritise profit over people; to be linked to human rights violations through own business activities and supply chains; forced labour, child labour, land grabbing, discrimination of migrants and women, low wages, complicity in gross human rights violations sanctioned by States. Today, there is increasing consensus that respecting human rights can no longer be optional. Regulation is required.
Due diligence is the process that a company undertakes to ensure that it respects human rights and the environment. It is a process in four steps; identifying, addressing and monitoring impacts, engaging with stakeholders in the process and communicating about findings.
The EU legislation is expected to make this standard of expected business conduct mandatory, and to raise the bar on transparency.
Want to know more about how the law will impact you or help with your due diligence process? Get in touch with us at info(at)enact.se.