Study on EU Non-financial reporting directive highlights need for clarification of co's legal duty to report on human rights due diligence

On 4 March 2019, the European Coalition for Corporate Justice together with Clean Clothes Campaign published a new qualitative study on human rights reporting under the EU Non-financial reporting directive (NFRD). Drawing on an in-depth analysis of four case studies of company reporting, the report highlights the need for a clear human rights due diligence reporting module, and calls in particular for the NFRD to endorse the United Nations Guiding Principles on Business & Human Rights reporting framework, along with sanctions for non-compliance and disclosure of meaningful supply chain data.

The study is available below.

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4 March 2019

A Human Rights Review of the EU Non-Financial Reporting Directive

Author: European Coalition for Corporate Justice, Clean Clothes Campaign

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4 March 2019

ECCJ Study of Non-financial Reporting reveals need for UNGP framework

Author: ECCJ

At present, under the EU Non-financial Reporting Directive (NFRD), companies are required by law to disclosure their human rights risks, impacts and due diligence in their annual reports. However there remains a problem: it is not specified how companies are meant to do this.  Meanwhile, studies continue to reveal companies failing to report properly on their human rights risks, impacts and due diligence.

This report provides a qaulitative study of four cases of company reporting under the NFRD, each with significant and serious human rights risks and impacts. The examples highlight the need to clarify the legal duty to report on human rights due dilignce.

ECCJ, together with the civil society Alliance for Corporate Transparency, endorses the UNGP reporting framework as the human rights reporting framework companies must use. This is because it provides the clearest and most sophisticated common standard for companies as to how to undertake and report on their human rights risks, impacts and due diligence...

[T]he report calls for sanctions for non-compliance with the directive and disclosure of meaningful supply chain data, such as supplier lists, to empower civil society to hold companies account for what they say in their reporting.

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