More than 100 companies and investors call for effective EU corporate accountability legislation
Danone, Ericsson, IKEA, Hapag-Lloyd and VAUDE are among businesses expressing concern over delays to corporate human rights and environmental law.
In light of delays to the European Commission’s legislative proposal on corporate accountability, more than 100 companies, investors, business associations and initiatives have released a public statement citing concerns about the setbacks and urging swift adoption of effective legislation. The legislative proposal is due to be published later this month.
The statement was signed by companies and investors from various industries and countries, including Danone, IKEA and Aviva, as well as SMEs such as Shiftphones and Tricorp. They state all businesses operating in the EU market – no matter their size or sector – must fall within the scope of legislation. The legislation should oblige EU businesses to carry out ongoing, adequate due diligence proactively and across all their operations and their full value chain, in line with international standards.
Calls for mandatory human rights and environmental due diligence (mHREDD) have been gaining momentum, particularly in Europe. In 2021, mHREDD laws were passed in Germany and Norway, and similar laws are under consideration in the Netherlands, Belgium and Finland. The EU’s Sustainable Corporate Governance initiative will play a significant role in creating a Europe-wide level playing field for mHREDD and corporate accountability. However, in December 2021, publication of the European Commission’s legislative proposal was delayed for the second time.
Signatories recognised voluntary approaches have been insufficient and there is a need for legal consequences – including provisions for civil liability – to ensure qualitative mHREDD beyond tick-box solutions and access to remedy for those harmed. They also called on lawmakers to ensure mHREDD is conducted through a human-centric approach, with strong emphasis on listening to the voices of affected stakeholders, including workers, communities and human rights and environmental defenders.
Johannes Blankenbach, Senior EU/Western Europe Researcher & Representative at the Business & Human Rights Resource Centre, said: “Momentum is rapidly growing for mandatory human rights and environmental due diligence and corporate accountability, not just among civil society and workers, but also among businesses. Today more than 100 companies and investors have united to call on the EU to urgently bring in legislation which promises better outcomes for people and the planet.
“The delays to the EU’s Sustainable Corporate Governance initiative have been concerning but should be used to strengthen any internal drafts and propose effective legislation driving meaningful action from businesses to safeguard workers and communities in global value chains. Ambitious mHREDD must be centred on rightsholder engagement and include adjustments to purchasing practices and other business model aspects where these are found to create risks. This would make a significant difference to tackling the human rights and environmental impacts of EU businesses across their global value chains.”
Peter van der Werf, Senior Manager Engagement at Robeco, said: “This legislation has the potential to create a level playing field for companies to manage their environmental and human rights impacts. As investors we will be better equipped to fulfil our responsibility to respect human rights as a result of our own due diligence. We need to build on robust corporate reporting as a result of mandatory human rights and environmental due diligence disclosure. Therefore we urge the European Commission to resume the adoption of this legislative proposal.”
Note to editors:
- The Business & Human Rights Resource Centre is an international NGO that tracks the human rights impacts (positive and negative) of more than 10,000 companies across nearly 200 countries.
- Similar EU-facing statements endorsing due diligence legislation including civil liability have been released by a group of cocoa companies as well as 94 investors with over USD 6 trillion in assets under management, among others.
- The full statement is available here.
Media contact: Priyanka Mogul (London-based), Media Officer, Business & Human Rights Resource Centre, +44 (0) 7880 956239, [email protected]