The respect of human rights is the most fundamental value that we have as a society. Nevertheless, economic globalisation has lead to the massive exploitation of human rights in developing countries for the benefit of multinational enterprises (MNEs). The outsourcing and offshoring of production and services have had huge environmental and social costs.
European MNEs have been continually associated with violations of workers' rights, environmental damage, and harm to local communities. The reason for these continued violations is complex and multifaceted, yet of central significance is the law that governs these MNEs’ legal structures and accountability.
Subject to certain exceptions, the parent companies and boards of directors of MNEs are not legally responsible for the adverse human rights impacts directly linked to their operations, products, or services by their business relationships, including those caused by their subsidiaries, subcontractors, or customers. While victims of human rights abuses are typically entitled to pursue legal action in the country where the abuse took place, there may exist significant practical barriers, including the lack of an effective judicial system.
An additional problem is that even if the victims of corporate related abuse can make a legal case against the parent company of an MNE under the jurisdiction of an EU Member State, the existence of legal, procedural, and institutional barriers still prevent these victims from gaining access to an effective remedy.
The concept of human rights due diligence has recently garnered attention as a major tool that has the potential to bridge this governance gap. It sits at the core of the United Nations Guiding Principles for Business and Human Rights, which recognize and clarify the state duty to protect human rights, the corporate responsibility to respect them, and the right of people to access remedy for violations of human rights.
We work with the European Coalition for Corporate Justice (ECCJ), of which we are a Steering Member, and other civil society groups, and renowned legal experts to develop and promote solutions to the above mentioned problems.
We have analysed hundreds of pages of technical documents and prepared a comprehensive overview of the sustainability reporting requirements under the forthcoming EU legislation. We summarise what ESG data will be critical for companies, banks, and investors in sustainability strategy and management and in the areas of climate change, environment, sustainable activities, employees and supply chains, due diligence, and anti-corruption measures.
Would you like to influence key EU developments on business, sustainability and climate change? Do you wish to combine environmental and economic perspectives? Do you want to help set European standards for transparency of corporate sustainability performance and help investors finance the transformation of our economy? Become a member of Frank Bold’s international team implementing this strategy.
Leading NGOs working on corporate sustainability and sustainable finance have published a briefing with key recommendations to help clarify directors’ responsibilities to oversee sustainability that fully fit with existing company law and corporate governance frameworks across Europe.
