Why human rights due diligence is essential for your business

Discover the importance of maintaining responsible practices beyond compliance.

In brief

• Human rights due diligence is vital for responsible business practices amid global human rights challenges.
• Due diligence procedures protect companies against risks and enhance brand reputation, regardless of regulatory changes.

In an interconnected world, the importance of human rights due diligence (HRDD) is paramount. As businesses operate and expand globally, they face increasing pressure to ensure their practices do not contribute to human rights abuses. Geopolitical conflicts and social movements have heightened the urgency for companies to adopt HRDD - not only to comply with regulations but also to foster trust among stakeholders.

The global state of human rights

The global landscape is overflowing with human rights challenges, with millions affected by conflict, exploitation and environmental degradation. An estimated 40 million people are trapped in modern slavery, while fundamental labor rights - including health and safety, protection against discrimination, equality and freedom of association - are increasingly under pressure, even within the EU. A 2025 report from the International Trade Union Confederation on workers’ rights found that 87% of countries violated the right to strike, while 80% undermined collective bargaining - two essential rights for protecting workers globally. Geopolitical turmoil, armed conflict and economic instability further exacerbate these issues, making it crucial for businesses to recognize their role and take proactive measures to mitigate human rights risks.

Regulatory landscape and the social price of the green transition

A growing number of regulations mandate HRDD across jurisdictions. The UN Guiding Principles on Business and Human Rights urge companies to respect human rights in their operations and supply chains. National laws such as France’s Duty of Vigilance Law, Germany’s Supply Chain Act and the Norwegian Transparency Act require businesses to conduct human rights due diligence, reflecting a trend toward accountability and transparency. Additionally, several European regulations require companies to have due diligence procedures in place, including the EU Deforestation Regulation, which also emphasizes the rights of Indigenous peoples—a group particularly vulnerable to human rights violations, as their land and cultural rights are often infringed upon in connection with deforestation. Industry-specific regulations further underscore the necessity of due diligence procedures, as noncompliance can lead to reputational damage and legal repercussions.

The synergies between environmental and social sustainability should not go unnoticed. Climate change threatens the health, well-being and livelihoods of millions of people worldwide and the green transition is pivotal in protecting human rights globally. At the same time, businesses pursuing ambitious green transition goals must ensure that energy transition projects and sustainability initiatives do not violate human and labor rights in the process. Companies must be mindful of these challenges, including the fact that minerals critical for solar panels—such as aluminum, cadmium, copper and gallium—are often extracted in regions with high risks of forced labor and child labor. Additionally, renewable energy projects like wind and solar often carry inherent risks of negatively impacting local communities and Indigenous peoples through violations of land rights and forced displacement in rural areas. If companies fail to identify and address these risks, the green transition may end up violating the very rights it aims to protect.

The strategic value of human rights due diligence: Mitigating risks and enhancing business resilience

Integrating HRDD into risk management is essential for businesses today. Identifying and addressing human rights risks protects companies from reputational harm and legal liabilities. Proactive HRDD enhances resilience, enabling organizations to navigate challenges effectively. By fostering strong stakeholder relationships, businesses can build trust and loyalty, contributing to long-term value.