What is the Human Rights Due Diligence?

In today’s interconnected world, businesses are expected to operate with transparency, accountability, and respect for human rights. As global supply chains grow more complex, so does the risk of contributing to human rights violations, whether directly or indirectly. The Human Rights Due Diligence (HRDD) has emerged as a critical framework to help businesses identify, address, and mitigate these risks.

Far more than a compliance exercise, HRDD is becoming an essential part of corporate sustainability and responsibility. For businesses looking to safeguard their reputation, build stakeholder trust, and align with emerging legal requirements, implementing HRDD is pivotal. Continue reading as we demystify the HRDD and break down the process. 

About the Human Rights Due Diligence 

Human Rights Due Diligence (HRDD) is a process through which businesses identify, prevent, mitigate, and account for how they address their adverse human rights impacts. It is a key principle outlined in the UN Guiding Principles on Business and Human Rights (UNGPs).

HRDD is increasingly recognised as a critical component of corporate responsibility and sustainability strategies. It enables organisations to evaluate their operations and supply chains to ensure they respect human rights, particularly in areas where they may directly or indirectly contribute to human rights violations. 

Why businesses should prioritise HRDD 

Implementing Human Rights Due Diligence (HRDD) is increasingly vital for businesses, offering significant benefits and mitigating substantial risks. A study by the World Benchmarking Alliance revealed that 80 percent of companies fail to conduct effective HRDD, exposing them to legal liabilities and reputational damage. Conversely, companies that proactively address human rights issues can enhance their reputation, build stakeholder trust, and gain a competitive edge. 

Moreover, with the rise of mandatory due diligence laws in various jurisdictions, businesses are legally obligated to undertake HRDD, making its implementation not just ethical but also a legal necessity. Therefore, prioritising HRDD is a strategic move that aligns with both moral imperatives and emerging legal frameworks, ensuring sustainable and responsible business operations.

What is the HRDD process? 

Below are some of the key steps in the Human Rights Due Diligence (HRDD) process.

Step 1: Identify and assess human rights risks

Businesses must conduct a comprehensive assessment of their operations, supply chains, and business relationships to identify actual and potential human rights risks.

• Engage with stakeholders (eg: workers, communities, NGOs) to understand their concerns.
• Analyse risks specific to vulnerable groups, such as women, children, or migrant workers.
• Use tools like risk mapping, human rights impact assessments, and supplier audits.

Step 2: Integrate findings and take action

Once risks are identified, companies must integrate their findings into decision-making processes and take appropriate action to prevent and mitigate negative impacts.

• Develop or update policies to address identified risks.
• Implement measures, such as supplier codes of conduct, improved working conditions, or enhanced oversight in high-risk areas.
• Assign responsibilities within the organisation to ensure accountability and follow-through.

Step 3: Track and monitor effectiveness

Businesses must track the effectiveness of their efforts to address human rights risks and impacts. This involves monitoring progress and refining actions as needed.

• Use key performance indicators (KPIs) to measure progress.
• Conduct regular internal reviews, audits, and supplier evaluations.
• Gather feedback from affected stakeholders to ensure actions are achieving desired outcomes.

Step 4: Communicate efforts and progress

Transparency is a key element of the HRDD process. Businesses must communicate their efforts to address human rights risks to stakeholders.

• Publish sustainability or human rights reports outlining risks, actions taken, and outcomes.
• Use accessible formats to communicate with stakeholders, including workers and local communities.
• Ensure reporting aligns with recognised frameworks like the Global Reporting Initiative (GRI) or UNGP Reporting Framework.

Step 5: Provide for or cooperate in remedy

Businesses must provide or cooperate in effective remedy mechanisms Where they cause or contribute to adverse human rights impacts.

• Establish grievance mechanisms for employees, communities, and other affected parties to report issues.
• Ensure remedies are timely, fair, and accessible, addressing harms caused through compensation, rehabilitation, or other measures.
• Collaborate with external partners, such as NGOs or government bodies, to strengthen remediation processes.

Final thoughts

Human Rights Due Diligence is more than a framework; it’s a reflection of how businesses interact with the world and their role in shaping a fairer, more responsible global economy. By embedding HRDD into their operations, organisations can identify risks early, enhance accountability, and ensure they are compliant with evolving regulations and aligned with stakeholder expectations.

However, the process of doing so requires more than good intentions; it demands continuous effort, collaboration, and transparency. As companies face growing pressure to act responsibly, HRDD represents a powerful opportunity to turn principles into tangible actions. By doing so, businesses can ensure long-term resilience, create a positive social impact, and build a legacy of responsible conduct.