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The EU Corporate Sustainability Due Diligence Directive: Real Change or More of the Same?
The implementation of mandatory corporate due diligence has been a growing trend in recent years. Viewed as having the potential to prevent corporate abuse, mandatory due diligence can be presented as the mechanism to substantially improve responsible corporate behaviour in practice. In 2022, the European Commission proposed a Corporate Sustainability Due Diligence Directive (CSDDD). The proposal presents obligations for companies regarding any actual or potential adverse human rights and environmental impacts, as well as liability for violation of such obligations. It aims to streamline due diligence obligations across Member States and create a level playing field. Since then, the Council of the EU and the European Parliament have agreed their negotiating positions. This paper explores the proposed CSDDD, including amendments, and analyses the challenges and prospects for mandatory due diligence. It explores whether the CSDDD could result in a genuine transformation of corporate practices to prevent corporate harms, or whether developments are similar to the incremental changes already seen over the years. It is argued that while the CSDDD could be another step in the right direction, significantly more needs to be done to prioritise rights holders above corporations and demonstrate a real change in responsible business practices.
Journal Article
Grit : the power of passion and perseverance
\"Psychologist Angela Duckworth shows parents, educators, athletes, students, and business people-- both seasoned and new --that the secret to outstanding achievement is not talent but a focused persistence called grit ... Sharing new insights from her landmark research on grit, MacArthur genius Angela Duckworth explains why talent is hardly a guarantor of success. Rather, other factors can be even more crucial such as identifying our passions and following through on our commitments. Drawing on her own powerful story as the daughter of a scientist who frequently bemoaned her lack of smarts, Duckworth describes her winding path through teaching, business consulting, and neuroscience, which led to the hypothesis that what really drives success is not genius but a special blend of passion and long-term perseverance. As a professor at the University of Pennsylvania, Duckworth created her own 'character lab' and set out to test her theory. Here, she takes readers into the field to visit teachers working in some of the toughest schools, cadets struggling through their first days at West Point, and young finalists in the National Spelling Bee. She also mines fascinating insights from history and shows what can be gleaned from modern experiments in peak performance. Finally, she shares what she's learned from interviewing dozens of high achievers-- from JP Morgan CEO Jamie Dimon to the cartoon editor of The New Yorker to Seattle Seahawks Coach Pete Carroll\"-- Provided by publisher.
Book
IMPLEMENTING HUMAN RIGHTS DUE DILIGENCE THROUGH CORPORATE CIVIL LIABILITY
Since the adoption of the UN Guiding Principles on Business and Human Rights the relationship between human rights due diligence (HRDD) and corporate liability has been a source of legal uncertainty. In order to clarify this relationship, this article compares and contrasts civil liability provisions aiming at implementing HRDD. It explains the legal liability mechanisms in the draft Treaty on Business and Human Rights and in domestic mandatory HRDD legislation and initiatives such as the French Duty of Vigilance Law and the Swiss Responsible Business Initiative. It compares these developments with the emerging case law on parent company and supply chain liability for human rights abuses. It explores the potentially perverse effects that certain civil liability provisions and court decisions might have on companies’ practices. Finally, it makes recommendations for the design of effective liability mechanisms to implement HRDD.
Journal Article
Conflict Minerals and Supply Chain Due Diligence: An Exploratory Study of Multi-tier Supply Chains
As recently stakeholders complain about the use of conflict minerals in consumer products that are often invisible to them in final products, firms across industries implement conflict mineral management practices. Conflict minerals are those, whose systemic exploitation and trade contribute to human right violations in the country of extraction and surrounding areas. Particularly, supply chain managers in the Western world are challenged taking reasonable steps to identify and prevent risks associated with these resources due to the globally dispersed nature of supply chains and the opacity of the origin of commodities. Supply chain due diligence (SCDD) represents a holistic concept to proactively manage supply chains reducing the likelihood of the use of conflict minerals effectively. Based on an exploratory study with 27 semi-structured interviews within five European industries, we provide insights into patterns of implementation, key motivational factors, barriers and enablers, and impacts of SCDD in mineral supply chains. Our results contribute to both theory and practice as we provide first insights to SCDD practices and make recommendations for an industry-wide implementation of SCDD. Altogether, this study provides the basis for future theory testing research in the context of SCDD and conflict mineral management.
Journal Article
Do no harm and do more good too: connecting the SDGs with business and human rights and political CSR theory
Purpose
This paper aims to explain how companies can benefit from their human rights due diligence process to identify opportunities for sustainable development goals (SDGs) activities in an operationalisation of political corporate social responsibility (PCSR).
Design/methodology/approach
Combining PCSR, SDGs and business and human rights (BHR) literature, the paper develops an extension of the risk-based due diligence process described by the BHR literature, helping companies identify societal needs to which they may contribute in accordance with PCSR through engaging in the SDGs.
Findings
Companies can benefit from resources they already invest in due diligence to identify their adverse human rights impacts, by drawing on the insights gained on broader needs, including human rights, to which they may contribute. This can help them develop appropriate interventions to address local needs and advance their moral legitimacy through assisting in SDG-relevant fulfilment of human rights.
Research limitations/implications
The paper provides theory-based guidance on how companies can assess their capacity for contributing societal value through human rights-oriented SDG interventions. Future empirical research may explore how companies apply the extended due diligence process to assess needs and determine relevant actions.
Practical implications
The paper offers a principle-based analytical approach for integrating the “do no harm” imperative of BHR theory with PCSR’s call for business assistance in the delivery of public goods and the SDGs’ call for business action to “do good’.
Social implications
This paper enables enhanced business implementation of the SDGs in line with PCSR and human rights theory, especially the emergent field of business and human rights.
Originality/value
This study gives theory-based guidance for companies for SDG contributions based on innovative combination of literatures.
Journal Article
The Corporate Sustainability Due Diligence Directive and the Doctrine of Privity of Contract
Dans l’Union européenne, les États membres adhèrent au principe de l’effet relatif des contrats entre entreprises dans le cadre du droit des obligations. Ce principe protège la sécurité juridique dans les relations inter-entreprises, ce qui implique que les droits et obligations n’existent qu’inter partes. Codifié ou non, il existe des exceptions dans le lex specialis des États membres. Ces exceptions visent à protéger la partie contractante la plus faible ou à sécuriser des ressources importantes. L’adoption de la directive européenne sur la publication d’informations en matière de durabilité par les entreprises (Corporate Sustainability Due Diligence Directive) crée un instrument juridique permettant aux entreprises relevant de son champ d’application d’établir des droits et obligations pour les parties contractantes directes et indirectes dans la chaîne d’activités, afin de lutter contre les impacts environnementaux négatifs ainsi que les violations réelles ou potentielles des droits de l’Homme. La directive étend l’utilisation des exceptions actuelles et crée des exceptions supplémentaires, conférant ainsi des obligations aux parties contractantes indirectes dans la chaîne d’activités. Ces nouvelles exceptions incluent l’utilisation de garanties contractuelles, des soutiens ciblés et proportionnels pour les PME. La directive agit ainsi comme la première exception lex generalis au principe de l’effet relatif des contrats entre entreprises. Si une entreprise manque à ses obligations au titre de la directive, le droit civil prévoit à la fois des actions privées et publiques. Ces actions comptent par exemple des recours contractuels, ainsi que l’accès à des dommages en dehors de la chaîne d’activités.
Journal Article
Human Rights Due Diligence in Law and Practice: Good Practices and Challenges for Business Enterprises
This article considers the practices of companies worldwide in attempting to implement human rights due diligence (HRDD) as envisaged by the Guiding Principles on Business and Human Rights. Based on empirical research conducted through surveys and interviews, it analyses corporate practices in this area. It examines the responses of companies with reference to the core elements of implementing HRDD: identifying actual or potential human rights impacts; taking action to address these impacts; and tracking or monitoring the effectiveness of actions. In addition, the article places these practices in the context of the legal developments in the field of HRDD. The research shows the difference that dedicated HRDD – in comparison with non-human rights specific processes – can make in terms of identifying adverse human rights impacts of both the company as well as of those which are part of its business relationships.
Journal Article
Towards environmentally just supply chains: from harm reduction to transformative sustainability actions
PurposeIn response to the worsening environmental crisis, there have been multiple calls for sustainable supply chain management (SSCM) scholars and practitioners to adopt a “business-not-as-usual” approach based on justice, fairness, equity and sustainability. We add to this literature by proposing environmental justice (EJ) as a key concept for the theory and practice of SSCM.Design/methodology/approachThis conceptual article builds SSCM theory on EJ and contributes to supply chain justice research and practice by introducing the concept of the “environmentally just supply chain” and presenting pathways for operationalizing it in practice.FindingsThree pathways are proposed to leverage transformative SSCM to create environmentally just supply chains: human rights due diligence, resilience thinking and coproduction of environmentally just supply chains.Practical implicationsThe three pathways can be used by actors within a supply chain to create environmentally just supply chains.Originality/valueThis article extends transformative, non-instrumental perspectives on environmental sustainability within SSCM scholarship to provide insights into how supply chains can be transformed through EJ. Not only does the article show the relevance of EJ for SSCM theory and practice, but it elaborates pathways for moving from harm reduction to transformative sustainability actions.
Journal Article
Risk-Based Due Diligence, Climate Change, Human Rights and the Just Transition
Climate change has been described as one of the greatest threats to people and the planet. Its impacts affect virtually the entire spectrum of internationally recognised human rights as well as the environment in and of itself. In relation to human rights, there is a growing consensus that companies should exercise human rights due diligence in order to identify and prevent their actual and potential adverse impacts. However, the relevance and implications of the concept of the due diligence have not yet fully been analysed in relation to climate change. In this paper, we explore the concept of risk-based due diligence, which builds on the concept of human rights due diligence but extends it to other areas such as the environment. Through a review of recent regulatory developments as well as case-law and other grievances, we analyse the three facets of risk-based due diligence for climate change—prevention, mitigation and remediation. We consider both the short term as well as the longer-term human rights and environmental implications of companies’ climate-related impacts, as well as those resulting from the company’s contributions to the green transition. We argue that risk-based due diligence offers an under-explored but important dual function: providing the operational means through which companies can identify and address the climate-related human rights and environmental impacts with which they may be involved, whilst also taking into consideration the human rights implications of their climate mitigation strategies and contributions to the just transition.
Journal Article