This discussion draft is intended for the consideration of the European Commission and other stakeholders as the Commission develops proposals on mandatory human rights and environmental due diligence (mHREDD) and considers how national regulators would implement any such legislation. Shift is submitting this draft together with our formal response to DG JUST’s consultation on a potential new corporate duty to carry out HREDD.
In this discussion draft, we propose some key signals that national regulators could use in assessing the seriousness or quality of a company’s HRDD, grouped into six broad areas of company practice:
- Governance of human rights;
- Meaningful engagement with affected stakeholders;
- Identifying and prioritizing risks;
- Taking action on identified risks;
- Monitoring and evaluating progress in addressing risks;
- Providing and enabling remedy
Not all these features need to be present to judge HRDD to be meaningful or serious, yet where few of them are present, it is unlikely that HRDD will achieve its purpose in practice.
This draft is intended to inform a discussion about assessment by national regulators of company compliance with potential new mandatory human rights and environmental due diligence (mHREDD) legislation by:
- Highlighting critical features of HRDD that are often overlooked or done poorly in practice by companies (such as meaningful stakeholder engagement);
- Identifying key practices and behaviors needed for meaningful implementation of HRDD that can help in distinguishing better from poorer quality HRDD by going beyond the ‘observable basics’ of company practice;
- Being relevant to companies of all sizes and sectors by highlighting features of HRDD that could be demonstrated by any company in a variety of ways.
It is not intended to:
- Replace or dilute existing guidance on the process elements of HRDD;
- Exclude consideration of authoritative sector-specific guidance by regulators where that is relevant to a company being assessed;
- Define leading practice in carrying out HRDD.
We welcome feedback on this discussion draft and will be consulting further on it during Q1 2021. Please direct your feedback and inquiries to: info [at] shiftproject [dot] org
