Published online by Cambridge University Press: 03 May 2021

...The UNGPs are a text, to be sure. However, as César Rodríguez-Garavito has observed, and as we intended, they should be understood ‘also in their dynamic dimension (such as their capacity to push the development of new norms and practices that go beyond the initial content of the [UN]GPs and improve companies’ compliance with human rights standards’. This article describes one such process: how the construct of human rights due diligence (HRDD), a core component of the UNGPs, is helping to provide a path beyond shareholder primacy, a ruling corporate governance norm for nearly a half century, towards multi-fiduciary obligations.

This is a critical development for human rights insofar as shareholder primacy coupled with its correlative cost-cutting methods have been major drivers of outsourcing and offshoring, risk-shifting, and socializing externalities of one sort or another. It was in the context of these business practices that that formal field of BHR was established. A significant shift away from shareholder primacy to some form of stakeholder governance – that is, governance in the interests of all of a company’s stakeholders – changes the BHR landscape...

In the Introduction to a recent symposium on hard and soft law in the BHR field, Steven Ratner writes: ...

...If ever we have witnessed a norm cascade, to quote the constructivists, the last decade surely represents one in the BHR space.

To describe and explain this entire ‘cascade’ is well beyond the scope or purpose of this article. We limit ourselves to three points...

HRDD provides a focal point for governments in their own policy developments and engagement with business and, in the instances discussed earlier, for a move towards mandatory measures accompanied by remedial mechanisms. For business, HRDD provides a conceptual framework as well as a template for tools with which to manage the social risks of their own conduct and business relationships before they became material risks for the company itself. For affected individuals, communities, and their representatives, HRDD provides an authoritative framework for evaluating companies’ conduct, and to engage them in order to avoid or reduce harm and seek remedy, while lobbying governments to make the process mandatory.

Second, the ‘cascade’ was facilitated by collaboration from the start with other international standard setting entities in closely related domains...

Finally, the ‘cascade’ has also benefited from related developments in the private sector too numerous to note here. However, one that deserves particular mention because of its contemporaneous ‘soft’ origins in the UN is ESG investing...