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19 May 2020

Sam Eastwood, James Ford, Libby Reynolds, Mayer Brown

Business and Human Rights: Mandatory human rights due diligence – European Commission to introduce a legislative initiative by 2021

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On 29 April 2020, the European Commissioner for Justice, Didier Reynders, announced that the European Commission will develop legislation that would require EU companies to carry out human rights and environmental due diligence. The Commissioner confirmed that a legislative initiative would be introduced by 2021. Details of the exact legal mechanism will follow, but according to the Commissioner, any legislation would be "inter-sectorial, mandatory and of course with a lot of possible sanctions"...

Key takeaways

  1. The European Commission's commitment to a legislative initiative on mandatory human rights and environmental due diligence in 2021 is the latest development in an increasing tide of regulation on the topic of business and human rights.
  2. The Study acknowledges a number of non-legal incentives for carrying out due diligence, as well as identifying various benefits associated with introducing mandatory due diligence legislation. 
  3. The COVID-19 pandemic has underlined the importance of businesses carrying out human rights and environmental due diligence...

The Study also illustrated that there is a significant variance in how businesses currently manage human rights and environmental risks in their supply chains... Businesses should take note of emerging best practices to ensure they are adhering to their current and emerging human rights due diligence responsibilities.