In 2011, the United Nations Guiding Principles on Business and Human Rights were approved by the UN Human Rights Council [1], a moment that marked a turning point in the regulation of companies when it comes to issues that are not just social, as environmental. It is a non-binding legal instrument, providing mere guidance for both States and companies.
These principles are based on three pillars:
It should be noted that one of the contributions of the United Nations Guidelines is the introduction of the concept of due diligence, in matters of Human Rights, which consists of a process that all companies must implement in order to identify, prevent, to mitigate and be accountable for the way they address adverse impacts on Human Rights – potential and real – with which they may be involved.
This issue has progressively gained greater importance, whether due to the climate changes that have been evident, with extreme factors of drought and floods, a consequence of pollution caused, to a certain degree, by large companies, or due to greater awareness of violations of human rights in the most diverse value chains associated with such companies.
Thus, in February 2022, a proposal for a Directive of the European Parliament and of the Council on the due diligence of companies in matters of sustainability emerged and aims to amend Directive (EU) 2019/1937.
In fact, corporate exploitation, climate change and human rights are intrinsically related, threatening several human rights, such as the right to health and food (provided for in article 25 of the UDHR), and even the right to life (defined in article 3 of the Universal Declaration of Human Rights).
In this sense, it is worth highlighting the United Nations Special Report prepared in 2019 [2] on extreme poverty and human rights, in which it was highlighted, among others, that “Climate change will have devastating consequences for people in situations of poverty. Even in the best-case scenario, hundreds of millions of people will experience food insecurity, forced migration, disease, and death.”
The scope of application of this proposed Directive is companies (European or operating in the European Union) of very large size (more than 500 employees and a net global turnover of more than 150 million euros) or large companies in sectors considered as high risk for the environment and human rights (manufacturing of textiles, leather, wholesale trade of textiles, clothing and footwear, agriculture, forestry, fisheries, product manufacturing, extraction of mineral resources and wholesale trade of mineral resources, between others).
The primary objective of this proposed Directive is, therefore, to oblige those companies to be responsible for the impacts that their activities cause, whether on human rights or certain environmental impacts, covering the activities of the entire business group and of certain companies with which it relates, namely its suppliers.
This accountability is done through the due diligence process, in which case due diligence differs from the traditional concept applied by companies prior to a transaction.
According to this proposed Directive, companies will be required to implement a continuous process to identify, prevent, mitigate, and communicate the way in which they address adverse impacts on human rights and the environment arising from their operations, including those of certain companies that they have relationships with, taking care of the impacts of their operations – or the operations of certain companies with which they have relationships – on human rights and the environment.
Although the Directive has not yet been approved and, therefore, there is not even a deadline for its transposition, the truth is that many companies, acting proactively, have already started implementing due diligence processes in matters of human rights and the environment, aiming to be recognized as responsible business entities, both with the human rights of third parties and the environment, an attitude that will certainly bring them recognition from their consumers and investors.
[1] Thus implementing the UN “Protect, Respect and Repair” reference framework, designed for the issue of Human Rights and Transactional Companies, available here.
[2] UN Human Rights Council, Report of the Special Rapporteur on extreme poverty and human rights “Climate change and poverty”, 17 July 2019, A/HRC/41/39, available at A/HRC/41/39: Climate change, extreme poverty and human rights: Report | OHCHR.
