94 investors with over US$6T in assets voice support for EU mandatory due diligence incl. liability
"Investor Statement in Support of Mandated Human Rights and Environmental Due Diligence in the European Union", 7 Oct 2021
We, the undersigned 94 investors representing over $6.3 trillion in assets under management and advisement, in anticipation of the forthcoming legislative proposal from the European Commission on Sustainable Corporate Governance, support mandated human rights and environmental due diligence. All businesses, including investors and other financial actors, have a responsibility to respect human rights and the environment...
The investment community views rigorous due diligence legislation as good for businesses, investors, the economy, and the people it serves...
Governments have a duty to protect against human rights abuses, including those of businesses, through effective regulatory measures, particularly where voluntary corporate measures continue to leave significant gaps in human rights protections throughout value chains...
Therefore, recognizing the European Parliament’s March 2021 resolution as a valuable starting point, we, as investors, make the following recommendations for robust legislation on mandatory human rights and environmental due diligence.
- Mandated human rights and environmental due diligence should be cross-sectoral, covering all business enterprises and financial institutions, public and private, domiciled or based in, operating, or offering a product or service within the EU. Critically, it should cover small as well as large businesses, recognizing that they are part of the same value chain. [...]
Due diligence process aligned with international frameworks [...]
- Throughout the human rights and environmental due diligence process, businesses should meaningfully engage with actually and potentially affected stakeholders or their appointed representatives.
Remedy and accountability
- Due diligence legislation should ensure accountability for harms which businesses cause or contribute to and should enable and support the provision of adequate and effective remedy. Dependent upon their connection to a harm, businesses should provide for, cooperate in, or use leverage to ensure remediation of adverse impacts in their global value chains and within their operations.
- Businesses should be held accountable through appropriate administrative and civil liability legislative provisions for human rights and environmental adverse impacts within their operations and throughout their global value chains.
- EU Member States should ensure robust enforcement of all obligations and provide the right to an effective remedy. Any barriers that inhibit affected rights-holders from accessing remedy should be removed.
- ... Corporate boards should oversee and be accountable for the implementation of rigorous human rights and environmental due diligence processes; monitor, discuss, and report on their development; and ensure their results are reflected in forward-looking targets relevant for the prevention and mitigation of human rights and environmental risks and impacts and adequately considered and integrated in the company’s overall strategy.
Finally, [...] we renew our call on all governments to develop, implement, and enforce mandatory human rights and environmental due diligence requirements for businesses headquartered or operating within their own jurisdictions or, where appropriate, to further strengthen these regulatory regimes where they already exist.